July 2012 Archives

July 20, 2012

Massive Prescription Drug Scheme Uncovered

On July 17, 2012 the United States Attorney's Office for the Southern District of New York issued a press release announcing the arrest of 48 individuals in what the release calls the largest single prescription drug diversion scheme ever charged at one time. The result of an organized effort by nearly a dozen state and federal agencies, the government has charged the defendants with operating a massive fraud scheme which diverted half a billion dollars' worth of prescription drugs dispensed to Medicaid patients in the New York City area.

The government alleges the defendants participated in a scheme to buy prescription drugs from patients, to whom the drugs were legitimately dispensed, and then sell them up a chain of buyers where the drugs eventually ended up in the hands of large scale wholesalers. The defendants are alleged to have fraudulently repackaged and labeled the diverted drugs to make them appear as if they were new, before they sold them to unwitting end-users.. In some cases these diverted prescriptions included HIV/AIDS drugs that were expired and potentially no longer medically effective, yet were still dispensed to unknowing patients.

Because many of the patients who sold the drugs received them through a Medicare or Medicaid benefit, and many of the patients who received the drugs from illegal wholesalers used Medicare or Medicaid benefits to obtain the drugs, the press release is calling the alleged fraudulent scheme a double fraud on the health care system. Medicare and Medicaid essentially paid for these drugs twice, once for the legitimate patient who sold their medication, and then once for the end-user, who obtained the drugs from the wholesalers.

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July 20, 2012

CMS Issues Proposed Rule That Would Change Home Health Face-to-face Requirements

On Friday, July 13, 2012 the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that if finalized would change the face-to-face requirements of a home health encounter. Under the current rule, before certifying a patient's eligibility for the home health benefit the physician must document a face-to-face encounter with the patient. In lieu of the physician having a face-to-face encounter, an allowed non-physician practitioner (NPP) may have the face-to-face encounter with the patient and notify the certifying physician. Allowed NPPs under the current rule are nurse practitioners, clinical nurse specialists, certified nurse-midwives, and physician assistants.

Under the current rule, a physician who cared for a patient in an acute or post-acute care facility, and had privileges at that facility, could perform the face-to-face encounter and inform the certifying physician. The proposed rule would allow a NPP working in collaboration with a physician in an acute or post-acute care facility to perform the face-to-face encounter, report it to the acute care physician, who would then report it to the certifying physician. The proposed rule is intended to provide the certifying physician with the most accurate and timely assessment of the patient's current clinical condition.

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July 13, 2012

Recent RAC Activity

CGI has added a new issue to its approved issues list for Region B:

Outpatient Bevacizumab (Avastin) services: Bevacizumab (Avastin) represents 10mg per unit and should be billed one (1) unit for every 10mg per patient. Claims for J9035 should be submitted so that the billed units represent the administered units, not the total number of milligrams.

HealthDataInsights has posted a new issue to its approved issues list:

Multi-use vial wastage: Herceptin (Trastuzumab). Multi-use vials are not subject to payment for discarded amounts of drug or biological. Per, the manufacturer label, J9355 Injection, Trastuzumab, 10mg (Herceptin) is only supplied in a multi-use vial. Providers should only bill the units associated with the dose administered to the patient.

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July 10, 2012

OIG Issues Report on Duplicate Payments for Hospice Medications

On June 28, 2012 the Office of Inspector General (OIG) for the Department of Health and Human Services issued a report to the Centers for Medicare and Medicaid Services (CMS) that addresses instances of duplicative payments for prescription drugs for hospice beneficiaries. The report includes the results of an audit conducted by the OIG which identified instances where Part D payments were made for prescription drugs for hospice care, when the drugs were already covered under Part A hospice coverage, resulting in duplicate payments for the same drugs.

Hospice care provided under Part A has an all-inclusive per diem which covers all aspects of daily hospice care, including drugs specifically for that care. Some drugs may be used for both hospice and non-hospice care for the same beneficiary. Part A per diem coverage could pay for a drug used for hospice care, while Part D could pay for the same type of drug for the same beneficiary if used for non-hospice care. For instance, a beneficiary could receive pain relief medication for hospice care under Part A. If that beneficiary were to fracture a bone, they could receive the same type of pain relief medication that they already receive for hospice care, but if it is for pain relief associated with the broken bone it could be covered under Part D. The OIG audit and report examine drugs that have been paid for under Part D, but were already paid for under Part A hospice per diem.

The OIG audit, conducted during calendar year 2009, found that beneficiaries paid $3,835,557 in copayments on drugs through the Part D program that should have been covered under Part A per diem payments. During the audit period, Part D sponsors for five plans were contacted by the OIG. All five indicated that they had no procedures in place to identify drugs that should have been covered under Part A per diem payments.

Three recommendations were made to CMS in the report, two of which CMS concurred with:

1. Educate sponsors, hospices, and pharmacies that it is inappropriate for Medicare Part D to pay for drugs related to hospice beneficiaries' terminal illnesses.

2. Perform oversight to ensure that Part D is not paying for drugs that Medicare has already covered under the per diem payments made to hospice organizations.

3. Require sponsors to develop controls that prevent Part D from paying for drugs that are already covered under per diem payments.

CMS did not concur with the recommendation that it perform oversight, stating that it requires conclusive evidence that there is an issue before making payment adjustments, and that implementing an oversight program would be costly and difficult. The OIG responded, stating that their audit work proved that duplicate payments were made and CMS should do more to address the issue.

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July 10, 2012

CMS Proposes to Add More Face-to-Face Requirements as a Condition of Payment

On July 6, 2012, the Centers for Medicare and Medicaid Services (CMS) issued a 765 page proposed rule addressing changes to the physician fee schedule, payments for Part B drugs, and other Medicare Part B payment policies. (To view the proposed rule please click here .) Of particular interest to providers, CMS implemented face-to-face requirements as a condition of payment for certain durable medical equipment (DME) items.

Face-to-face encounters are required for those items that:

1) currently require a written order prior to delivery per instructions in [CMS'] Program Integrity Manual; 2) cost more than $1,000; 3) [CMS believes] are particularly susceptible to fraud, waste, and abuse; and 4) [CMS believes are] vulnerable to fraud, waste, and abuse based on reports of the HHS Office of Inspector General, Government Accountability Office, or other oversight entities.

CMS explained that it added the face-to-face requirement for certain DMEs because, after empirical study, billed DMEs of the above four characteristics often failed to meet coverage criteria.

The proposed rules are expected to be formally published July 30, 2012. Until then, the public is free to offer commentary.

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July 3, 2012

CMS Accepting ACO Advance Payment Model Applications

The Centers for Medicare and Medicaid Services (CMS) will begin accepting applications on August 1, 2012 for Advance Payment Model Accountable Care Organizations (ACOs). Organizations applying for the Advance Payment Model would begin participation January 1, 2013.

Organizations participating in the Advance Payment Model would receive an advance payment on the shared savings they are expected to earn. Participating ACOs earn three types of payments:

• Upfront, fixed payment.

• Upfront, variable payment based on the number of its preliminarily prospectively assigned beneficiaries.

• A monthly payment of varying amount based on the size of the ACO, also based on the number of its preliminarily prospectively assigned beneficiaries.

The Advanced Payment ACO model is designed to test whether providing an advance on shared savings (as detailed above) will increase health organization participation in the Shared Savings Program, and to determine whether those advance payments can lead to better ACO care for beneficiaries and more savings for the Medicare program.

The Advanced Payment Model is available to participants in the Shared Savings Program, and allows organizations to receive advance payments that will be repaid from thee future shared savings they earn.

More information on Accountable Care Organizations and eligibility for the Shared Savings Program can be found here.

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