Every year the U.S. Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) releases an annual Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Unimplemented Recommendations. HHS released its most recent in Nov. 2021, outlining OIG’s top 25 unimplemented recommendations that, in OIG’s view, would most positively affect HHS programs in terms of cost savings, program effectiveness and efficiency, and public health and safety. These recommendations stem from OIG audits and evaluations through the end of 2020 and suggest changes coming to the federal healthcare programs that may impact healthcare facilities in the future. OIG’s recommendations outline where providers could focus their own compliance program to prepare for any further government scrutiny.
OIG also identified certain recommendations from HHS’ 2020 report and described the successful progress made by certain HHS operating divisions — i.e., the Food and Drug Administration and the Centers for Medicare & Medicaid Services (CMS) — with respect to HHS’ past recommendations. For example, the report highlighted progress in oversight of information technology systems. It is likely that the 2021 recommendations will receive the same push toward implementation. As such, 2022 may be the year that several OIG’s recommendations from audits become the law of the land or enforced by HHS.
This year, OIG directed nearly two-thirds of its top recommendations to CMS as OIG believes CMS could “reduce improper payments, prevent and deter fraud, and foster economical payment policies.” With the trust fund for Medicare Part A (inpatient hospital insurance) projected to be depleted by 2026, policymakers likely will look to these areas to save costs, even if CMS does not implement all policies on its own. Similar savings are projected for OIG recommendations for Part B (medical insurance), Part C (Medicare Advantage), Part D (drug plans) and Medicaid. Several of these recommendations may impact healthcare providers significantly, if implemented.
OIG also introduced new recommendations this year regarding COVID-19 transmission in nursing homes and abuse and neglect of Medicare and Medicaid beneficiaries, indicating a potential for future increased enforcement in nursing homes and long-term care settings.
Finally, several recommendations touch on the impact of the COVID-19 crisis on the healthcare industry. Just as the impacts of this crisis will endure throughout the future, OIG indicates here that enforcement priorities will likely be shaped by the COVID-19 crisis throughout the future. With many OIG audits in process on COVID-19 and the policy response, future reports will likely highlight even more COVID-19-related recommendations.
A full list of OIG’s 25 recommendations is included at the end of this alert; however, a few key recommendations for CMS are highlighted here:
- Increasing Nursing Home Infection Control Survey Scrutiny. OIG noted that nursing homes have been particularly impacted by the COVID-19 crisis and expressed concerns over reduced nursing home oversight due to the COVID-19 crisis. In particular, OIG pointed to a significant drop in nursing home onsite survey completion from March to May 2020. Considering ongoing concerns for patient safety, particularly in light of the COVID-19 crisis, OIG recommended that CMS assess the results of infection control surveys of nursing homes and revise these surveys as appropriate, noting that COVID-19 reduced the scope of nursing home surveys and increased backlogs of state surveys.
- Improving Identification and Reporting of Potential Abuse and Neglect of Medicare and Medicaid Beneficiaries. OIG noted that, through a review of claims data for Medicare and Medicaid emergency room visits, a significant number of potential abuse or neglect of beneficiaries’ cases are being underreported to local law enforcement agencies. The cases under OIG’s review revealed vulnerabilities in beneficiary protections that it recommends CMS address to ensure that harm is identified, reported, addressed, and prevented. OIG noted that CMS is revising its interpretive guidance for reporting, tracking, and referring violations appropriately. CMS is additionally working to establish a hospice complaint hotline. Further, although CMS has not committed to revising the Conditions of Participation for hospice providers, CMS plans to add new interpretive guidance for hospices to aid in the reporting of harm. For potential abuse and neglect of children in Medicaid, CMS will review hospital Conditions of Participation and interpretive guidance to ensure appropriate reporting of suspected abuse and neglect to the appropriate authorities.
- Tie Medicare Hospice Payments to Beneficiary Care Needs and Quality of Care. OIG noted that the hospice payment system is linked to the length of a patient’s stay and does not consider the quality of care provided by hospice providers. OIG found that hospice providers may target beneficiaries who are likely to have long lengths of stay to maximize payments or target beneficiaries in settings where the hospice can provide fewer services but receive the same payment rate. OIG recommends adjusting hospice payments that better align beneficiaries’ care needs with appropriate and quality services. In response to these recommendations, CMS indicated that the current hospice payment structure is required by statute and cannot be changed independently of federal legislative action.
- Revise the Hospital Wage Index. OIG previously recommended that CMS seek legislative authority to comprehensively reform the hospital wage index system, which is used to determine, in part, the amount Medicare pays for hospital inpatient services. OIG noted that significant vulnerabilities exist in the system, in part because CMS lacks authority to penalize hospitals that submit inaccurate or incomplete wage data, preventing Medicare payments to hospitals and other providers from appropriately adjusting to reflect local labor prices. Additionally, OIG noted that the wage index may not always accurately reflect local labor prices, so Medicare payments to hospitals and other providers may not be appropriately adjusted to reflect the prices. CMS stated that it is considering whether to recommend wage index system reform, including these statutory proposals, in the upcoming president’s budget. Hospitals should monitor any such hospital wage reforms, as such changes would have winners and losers, particularly if changes were used in a manner to reduce overall spending.
- Revising 3-Night Counts for SNFs. OIG previously recommended that CMS analyze the potential impacts of counting time spent at a hospital outpatient facility toward the 3-night requirement for inpatient care before receiving skilled nursing facility (SNF) services are treated in a manner for similar hospital care with comparable access to these services. OIG highlighted the access and cost-sharing obligation discrepancies between beneficiaries with respect to SNFs.
Additionally, OIG highlighted that a review of a sample of SNF claims revealed that many SNFs incorrectly used a combination of inpatient and non-inpatient hospital days to determine whether the 3-night requirement was met, leading CMS to improperly pay an estimated $84.2 million between 2013 and 2015. OIG noted that, under the President’s March 2020 declaration of a national emergency concerning the COVID-19 outbreak, CMS temporarily waived the requirement for a 3-day prior hospitalization for coverage of a SNF stay for beneficiaries who experienced dislocations or were otherwise affected by COVID-19.
- Provide Targeted Oversight for Medicare Advantage Organizations. OIG identified 20 Medicare Advantage Organizations (MAO) that received millions of dollars in payments from in-home Health Risk Assessments (HRAs) for beneficiaries with no record of any other service being provided in the same year. The risk adjustment program is intended to level the playing field by paying more to MAOs for beneficiaries who need a costlier level of care, which helps maintain beneficiary access to Medicare Advantage plans. CMS agreed with OIG’s recommendations to provide additional and targeted oversight for the identified MAOs. CMS continues to consider how to provide targeted oversight.
- Provider Identifiers in Encounter Data. OIG previously recommended that CMS require Medicare Advantage plans to include ordering and referring provider identifiers in encounter data for records of durable medical equipment, prosthetics, orthotics, and supplies, clinical laboratory, imaging, and home health services. OIG noted that tracking the quality of patient care by National Provider Identifiers is an important way to assess whether ordering or referring providers have determined that services were appropriate for patients. The report notes that CMS stated in its Final Management Decision that the Medicare program will need to undertake rulemaking to implement this requirement.
OIG’s list included many other recommendations to CMS and other HHS divisions. We include a full list of OIG’s top 25 unimplemented recommendations below. Recommendations listed in italics appear for the first time in the 2021 recommendations. As noted above, and implicit in the fact that many recommendations are repeated from past years, not all policies will be implemented. That said, as policymakers shift from pandemic response to long-term regulation, these recommendations may serve as a guide on key areas to reduce fraud, waste, and abuse.
Please consult one of the authors if you have questions about any of OIG recommendations or how such policy changes could impact your business.
25 Recommendations from Report:
CMS–Protecting Patients (Cross-Cutting)
- To ensure that nursing homes are implementing actions to prevent the spread of COVID-19 and that they are protecting residents, CMS should assess the results of infection control surveys of nursing homes and revise surveys as appropriate, and clarify expectations for States to complete backlogs of standard surveys and high priority complaint surveys that were suspended in the early months of the pandemic.
- CMS should take actions to ensure that incidents of potential abuse or neglect of Medicare and Medicaid beneficiaries are identified and reported.
CMS—Medicare Parts A & B
- CMS should take steps to tie Medicare hospice payments to beneficiary care needs and quality of care to ensure that services rendered adequately serve beneficiaries’ needs.
- CMS should reevaluate the inpatient rehabilitation facility (IRF) payment system, which could include seeking legislative authority to make any changes necessary to more closely align IRF payment rates and costs.
- CMS should seek legislative authority to comprehensively reform the hospital wage index system.
- CMS should recover overpayments of $1 billion resulting from incorrectly assigning severe malnutrition diagnosis codes to inpatient hospital claims, ensure that hospitals bill appropriately moving forward, and conduct targeted reviews of claims at the highest severity level that are vulnerable to upcoding.
- CMS should analyze the potential impacts of counting time spent as an outpatient toward the 3-night requirement for skilled nursing facility (SNF) services so that beneficiaries receiving similar hospital care have similar access to these services.
- CMS should consider seeking legislative authority to implement least costly alternative policies for Part B drugs under appropriate circumstances.
CMS—Medicare Parts C & D
- CMS should pursue strategies to educate beneficiaries and providers about access to medication-assisted treatment drugs and naloxone (a drug that reverses opioid overdoses).
- CMS should provide targeted oversight for Medicare Advantage organizations that received a disproportionate share of risk-adjusted payments for diagnoses identified through in-home health risk assessments (HRA) with no other service records.
- CMS should require Medicare Advantage organizations to submit an ordering provider’s national provider identifier (NPI) on encounter records for durable medical equipment, prosthetics, orthotics, and supplies, and for laboratory, imaging, and home health services.
- CMS should develop and execute a strategy to ensure that Part D does not pay for drugs that should be covered by the Part A hospice benefit.
- CMS should ensure that States’ reporting of national Medicaid data is complete, accurate, and timely.
- CMS should develop policies and procedures to improve the timeliness of and recover uncollected amounts identified by OIG’s audits.
- CMS should improve Medicaid managed care organizations’ identifications and referrals of cases of suspected fraud or abuse.
- CMS should identify States with limited availability of behavioral health services and develop strategies and share information to ensure that Medicaid managed-care enrollees have timely access to these services.
Administration for Children and Families (ACF)
- ACF and HHS should improve their operational, management, and communication systems to better address the safety, security, and mental health needs of unaccompanied children.
- ACF should develop a comprehensive strategy to improve States’ compliance with requirements related to treatment planning and medication monitoring for children who are prescribed psychotropic medication.
Indian Health Service (IHS)
- As a management priority, IHS should develop and implement a staffing program for recruiting, retaining, and transitioning staff and leadership to remote hospitals.
National Institutes of Health (NIH)
- NIH should continue to build on its efforts to identify and mitigate potential foreign threats to research integrity.
Food and Drug Administration (FDA)
- FDA should improve its use of Risk Evaluation and Mitigation Strategies (REMS) by enhancing the assessment review process, ensuring that assessment reviews are timely, and strengthening REMS to better address the opioid crisis.
- HHS should ensure it has effective response plans and provide necessary guidance to effectively respond to domestic and international public health emergencies.
- HHS should improve administration and management of contracts related to inherently government functions and personal services. HHS should also provide training to political appointees and senior leaders related to contract administration.
- HHS should ensure that all future web application developments incorporate security requirements from an industry-recognized web application security standard.
- HHS should address gaps in cybersecurity incident response capabilities across the department.