CLN Article

Regulatory Profiles

In This Issue...

OIG Hammers Labs on Reimbursement

Resurrecting an old complaint about how lab tests are reimbursed, a report from the Department of Health and Human Services Office of the Inspector General (OIG) claims that Medicare could have saved $1 billion on lab testing in 2011. The analysis compares how much Medicare paid for tests against how much Federal Employees Health Benefits (FEHB) plans paid.

OIG collected payment data from 50 state Medicaid programs and three federal employees FEHB plans that pay for lab tests on a fee-for-service basis. The agency found that in 2011, Medicare paid 18–30% more than other insurers for 20 high-volume or high-cost tests. Medicare could have saved $910 million, or 38%, on these tests if it had paid providers at the lowest established rate in each geographic area. According to OIG, the reason for the differences in payment is that other insurers incorporate factors Medicare can't, such as competitor information, changes in technology, and provider requests in their payment rates.

OIG recommended that the Centers for Medicare and Medicaid (CMS) appeal to Congress for a new law that would give CMS more flexibility in how it determines reimbursement rates.

More information is available from the OIG website.

U.S. Attorney General Announced Fraud Takedown

Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced that a nationwide investigation by Medicare Fraud Strike Force operations in eight cities has resulted in charges against 89 individuals, including doctors, nurses, and other licensed medical professionals, for allegedly participating in $223 million in false billings. 

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts on preventing and deterring fraud, as well as enforcing current anti-fraud laws around the country. According to Secretary Sebelius, the Affordable Care Act is making it easier for the government to combat fraud by providing new resources.

The 89 defendants are accused of a variety of crimes, including conspiracy to commit healthcare fraud, violations of the anti-kickback statutes, and money laundering. The charges are based on a variety of schemes involving medical treatments and services, primarily home healthcare, but also mental health services, psychotherapy, physical and occupational therapy, durable medical equipment, and ambulance services. According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. 

More information is available online.

Government EHR Goals Already Reached for 2013

More than half of all doctors and other eligible providers have received Medicare or Medicaid incentive payments for adopting or meaningfully using electronic health records (EHRs), and the Department of Health and Human Services (HHS) has exceeded its goal for 50% of doctor offices and 80% of eligible hospitals to have EHRs by the end of 2013. Doctors and hospitals' use of health IT have more than doubled since 2012, according to an HHS report.

The report also indicated that only 17% of physicians were using an advanced EHR system in 2008, and only 9% of hospitals had adopted EHRs. "We have reached a tipping point in adoption of electronic health records," said HHS Secretary Kathleen Sebelius. "More than half of eligible professionals and 80 percent of eligible hospitals have adopted these systems, which are critical to modernizing our healthcare system. Health IT helps providers better coordinate care, which can improve patients' health and save money at the same time."

More information is available from the government's health IT website.

NIH Warns of Cuts From Sequestration

The National Institutes of Health (NIH) announced the projected impact of sequestration on the nation's premier medical research agency, detailing how NIH will trim $1.55 billion of its fiscal year 2013 budget. NIH must apply the cut evenly across all programs, projects, and activities that are primarily NIH institutes and centers. This means every area of medical research will be affected, the agency said. For every six applications submitted to the NIH, only one will be funded.

The cuts will translate into approximately 700 fewer competitive research project grants issued and no increase in stipends for National Research Service Award recipients in 2013. Existing grants could also be cut. Reductions to noncompeting research project grants will vary, but the expected NIH-wide average is -4.7%.

Patient care will be affected, too. Approximately 750 fewer new patients will be admitted to the NIH Clinical Center in 2013, and some services to patients will be reduced.

NIH emphasized that the cuts would not only thwart medical research, but also stall new jobs and economic growth. According to NIH, medical research employs more than 1 million people. The sequester will also "substantially" affect NIH's intramural research at its Bethesda, Md. campus and other locations, NIH said. While the agency has no plans to lay off or furlough employees, it is pursuing non-furlough administrative cost savings, such as delayed/forgone hiring and reducing administrative services contracts, so that furloughs and layoffs can be avoided. Salaries only make up about 7% of the NIH budget.

More information is available from the NIH website.

HHS Releases New Guideline on Organ Transplantation

The Department of Health and Human Services (HHS) released a new guideline aimed at improving patient safety by reducing unexpected disease transmission through organ transplantation. The guideline updates the 1994 U.S. Public Health Service (PHS) guideline for preventing transmission of HIV through organ transplantation and adds guidance for reducing unexpected transmission of HBV and HCV.

The new guideline, published in Public Health Reports (2013;128:247–346), recommends the use of more sensitive nucleic acid-based tests so that patients can be informed of risks to the greatest extent possible and protected from unintentional infections caused by transplanted organs.

To update standards, the Centers for Disease Control and Prevention (CDC) led an HHS workgroup comprised of experts on evidence-based guidelines and a multidisciplinary group that included transplant and infection prevention experts to conduct a systematic review of the best available evidence on reducing HIV, HBV, and HCV infection transmitted through organ transplantation. The 2013 PHS guideline includes recommendations based on this review.

Other changes from the previous PHS guideline include a recommendation that donors be screened for both HBV and HCV, in addition to HIV. Although organ donors are routinely tested for HBV and HCV, there were no specific PHS recommendations for these screenings included in the 1994 guideline. The guidelines also revised the set of risk factors for HIV, HBV, and HCV infections, as well as more robust informed consent discussions between transplant candidates and clinicians, in part based on information from new, more sensitive tests.