By Jonathan E. Levitt, Esq.
The Office of Inspector General (OIG) submits semiannual reports to Congress, summarizing the activities of the OIG and the Department of Health and Human Services. In its Reports, the OIG proposes improvements it deems necessary for implementation by Federal and State agencies, in order to improve the efficiency and effectiveness of the Department of Health and Human Services programs. Particularly relevant in its latest Report (Semiannual Report to Congress April 1 – September 30, 2014), the OIG notes the following:
Copayment Coupon Use – Part D Drugs
Pharmaceutical manufacturers often offer copayment coupons to insured patients to reduce or eliminate the cost of their out-of-pocket copayments for specific brand-name drugs. Although beneficial in many ways, these coupons constitute remuneration offered to consumers to induce the purchase of specific items (a violation of the anti-kickback statute), prohibiting their use for Federal health care program items or services. Pharmaceutical manufacturers that offer copayment coupons may be subject to sanctions if they fail to take appropriate steps to ensure that such coupons do not induce the purchase of Federal health care program items or services, including, but not limited to, drugs paid for by Medicare Part D.
The OIG has determined that the safeguards that pharmaceutical manufacturers have in place to prevent copayment coupons from being used to purchase drugs paid for by Medicare Part D may not prevent coupons from being used for Part D-covered drugs, and recommended that CMS cooperate with industry stakeholder efforts to identify a solution to prevent coupons from being used to purchase drugs paid for by Part D. The OIG reiterated the fact that manufacturers may be liable under the anti-kickback statute if they offer coupons to induce the purchase of drugs paid for by Part D or any other Federal health care program.
Clinical Laboratory Services
CMS agreed with the OIG’s recommendation to initiate a review of all labs that have been associated with questionable billing practices, and to take appropriate action with respect to program integrity strategies and the identification of program vulnerabilities associated with lab services. In 2010, over 1,000 labs had unusually high billing for 5 or more measures of questionable billing for Medicare lab services. Questionable billing practices included unusually high percentage of claims with ineligible and/or invalid ordering-physician numbers, or an unusually high allowed amount per ordering physician.
Ambulatory Surgical Center-Approved Procedures
The OIG evaluated payment methodologies for ASC-approved procedures, finding that Medicare could generate savings if CMS reduces outpatient department payment rates for ASC-approved procedures to ASC payment levels. The Report notes that CMS has not agreed to the OIG’s recommendations with regard to this matter, and has not initiated action to reduce outpatient department reimbursement rates. However, the OIG’s position is instructive on future modifications.
In continuing its fraud prevention efforts, the OIG partners with Federal, State, and local law enforcement entities to form the Health Care Fraud Prevention and Action Team (“HEAT”). The OIG’s Report notes that, to date, HEAT Strike Forces have been convened in Detroit, Michigan; Miami and Tampa, Florida; Houston, Texas; Brooklyn, New York; and Los Angeles, California, and that Task Force efforts have resulted in charges against 90 individuals involved in various health care fraud schemes involving approximately $260 million in false claims. Following Strike Force efforts, New York based Elaine Kim and Gilbert Kim were indicted for artificially increasing demand for medical services and being paid for referring beneficiaries to various physical therapy clinics. Both Gilberts plead guilty to conspiracy to commit health care fraud, and were ordered to pay $5.9 million in restitution. Over the past several months, similar prosecutions have occurred in relation to various health care providers, pharmacies and DME providers across the country.
