On May 29, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its “Semiannual Report to Congress” for the period of October 1, 2013-March 31, 2014. The report details findings and recommendations to improve HHS programs, the following of which pertain to Medicare contractors and/or may affect O&P:
- Contractor performance and quality assurance: Medicare Administrative Contractors (MACs) had not met one-quarter of the quality assurance standards reviewed and they had not resolved issues with 27 percent of the unmet standards as of June 2012. MAC standards have stringent performance requirements; a number of standards require 100 percent performance compliance. The Centers for Medicare & Medicaid Services (CMS) did not require action plans for 12 percent of unmet standards, and unmet standards without action plans were almost four times more likely to have issues go unresolved. The OIG recommends that CMS require action plans for all quality assurance standards not met, use the results of quality assurance reviews to help select award fee metrics for review, meet timeframes for completing quality assurance reports, meet timeframes for completing award fee determinations, establish reasonable timeframes for issuing contractor performance reports, and seek legislative change to increase the time between MAC contract competitions to give CMS more flexibility in awarding new contracts when MACs are not meeting CMS requirements.
- Contractor payment error rate reduction plans: The Comprehensive Error Rate Testing (CERT) program measures the improper payment rate (error rate) in the Medicare fee-for-service program. To reduce the error rate, CMS requires claims administration contractors to submit error rate reduction plans. The OIG found that CMS’ oversight of error rate reduction plans is limited, and some of the sampled plans that CMS approved did not include five required elements or were for contracts with high error rates. The OIG also found that limitations in CMS’ administration of incentives for error rate reduction may reduce their effectiveness. The OIG recommends that CMS review its process for overseeing claims administration contractors’ error rate reduction, ensure that contractors submit clear plans for reducing their error rates, provide additional guidance for contractors and CMS staff who review plans, and provide error rate reduction incentives that are aligned with the contracts’ error rates and performance periods.
- Contractor performance related to processing appeals: Contractors who conduct redeterminations decided in favor of Part A appellants at a lower rate than that for Part B appellants. Also, the contractors largely met required timeframes for processing redeterminations and paying favorably appealed claims, but they fell short of meeting timeframes for transferring case files for second-level appeals. Moreover, Medicare contractors use information from redeterminations in a variety of ways to improve their operations and to educate providers. Finally, CMS employs multiple methods to improve contractors’ processing of redeterminations, including fostering communication among contractors and implementing the Medicare Appeals System (MAS) for first-level appeals. The OIG recommends that CMS use the MAS to monitor contractor performance, continue to foster information sharing among Medicare contractors, and monitor the quality of redeterminations data in MAS.
- Lower-limb prosthetics National Government Services: National Government Services (NGS) paid $1.5 million for 770 lines of service for lower-limb prostheses from January 1, 2009, through September 30, 2012, that did not meet local coverage determination (LCD) requirements. OIG recommends that NGS continue to monitor the edits it developed and updated to ensure that they are functioning correctly and recover $1.5 million in identified overpayments for lines of service for lower-limb prostheses that did not meet LCD requirements.
- LCDs create inconsistencies in Medicare coverage: The OIG reported that in October 2011, over half of Part B procedure codes were subject to LCDs in one or more states. The presence of these LCDs was unrelated to the cost and utilization of items and services. Furthermore, LCDs limited coverage for these items and services differently across states. LCDs also defined similar clinical topics inconsistently. Although CMS has taken steps to increase consistency among LCDs, it lacks a plan to evaluate new LCDs for national coverage. The OIG recommends that CMS establish a plan to evaluate new LCD topics for national coverage consistent with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) requirements and continue efforts to increase consistency among existing LCDs. The OIG also recommends that CMS consider requiring MACs to jointly develop a single set of coverage policies.