Good afternoon to all from Washington, DC. Today OIG posts seven reports, updates the CIA List and provides news about enforcement actions. As always, you can use the links provided to go directly to the new material. ------------------------------------------------------------------------------ States Collection of Medicaid Rebates for Drugs Paid Through Medicaid Managed Care Organizations http://go.usa.gov/rw3m WHY WE DID THIS STUDY In general, drug manufacturers must pay rebates for covered outpatient drugs reimbursed under Medicaid for States to receive Federal matching funds. Drugs dispensed by Medicaid Managed Care Organizations (MCO) were excluded from this requirement until March 23, 2010, when section 2501(c) of the Patient Protection and Affordable Care Act expanded the rebate requirement to include these drugs. To realize the full savings under this expansion, it is important that States collect accurate drug utilization data from MCOs and that States invoice and collect rebate payments from manufacturers. HOW WE DID THIS STUDY In October 2011, we sent surveys about rebate collections involving MCOs to all 50 States and the District of Columbia (hereinafter referred to as States) and received responses from all but 1 State. States that paid for drugs through their MCOs (the carve-in approach) were asked about the drug utilization data collected from MCOs, their processes for invoicing and collecting rebates from manufacturers using these data, and the amounts of rebates collected between the second quarter of 2010 and the second quarter of 2011. We asked States that did not pay for drugs through their MCOs (the carve-out approach) or did not contract with MCOs about potential changes to their drug programs’ structures as a result of the rebate expansion. WHAT WE FOUND Between April 1, 2010, and June 30, 2011, 18 of the 22 States using a carve-in approach collected all the data needed to invoice manufacturers for rebates from their MCOs, 3 collected data from a portion of their MCOs, and 1 never collected any drug utilization data. All but one State that used a carve-in approach performed some type of data verification check. Twelve of the twenty-two States using a carve-in approach invoiced manufacturers and collected $1.6 billion in rebates for utilization in the second quarter of 2010 through the second quarter of 2011. However, 10 of the 22 States did not invoice manufacturers and collect rebates because, for example, they had to complete programming changes to the systems that process MCO claims. Additionally, the rebate expansion has prompted five States that used the carve-out approach to change to a carve-in approach. WHAT WE RECOMMEND We recommend that CMS follow up with the 10 States that had not collected rebates for drugs dispensed to Medicaid MCO beneficiaries and take action to enforce rebate collection if necessary. CMS concurred. ------------------------------------------------------------------------------ Iowa Lacked Some Documentation for Its Childcare Assistance Program Claims (A-07-11-03164) http://go.usa.gov/rw3A The Iowa Department of Human Services (State agency) did not always maintain adequate documentation to ensure that the paid claims for the childcare assistance program complied with Federal and State requirements. Of the 200 claims that we reviewed, we identified 57 claims that had client eligibility documentation deficiencies, 45 claims that had provider eligibility documentation deficiencies, and 27 claims that had claims processing documentation deficiencies (some claims had documentation deficiencies in more than 1 category). In addition, the State agency’s automated KinderTrack system allowed claims to be paid even when at least two significant data fields—“provider type” and “paid date”—had entries of zero. These documentation deficiencies indicate that the State agency’s childcare assistance program may be vulnerable to fraud, waste, and abuse. We recommended that the State agency: (1) Use the results of this review to establish policies and procedures to help ensure compliance with the Federal and State requirements for the childcare assistance program, (2) Determine the current eligibility of all clients and providers identified in this review with documentation deficiencies and ensure that further childcare assistance payments are denied for those clients and providers who are ineligible, and (3) Improve the processing of the childcare assistance claims within the KinderTrack system to ensure that the claims are complete. The State agency concurred with our first two recommendations but disagreed with our third recommendation; we maintain that all of our findings and recommendations are valid. ------------------------------------------------------------------------------ Massachusetts Medicaid Payments to Newton Health Care Center Did Not Always Comply With Federal and State Requirements (A-01-12-00013) http://go.usa.gov/rwcY The Massachusetts Executive Office of Health and Human Services, Office of Medicaid (State agency), generally made Medicaid payments in accordance with Federal and State requirements to Newton Health Care Center (Newton). However, the State agency did not always adjust its Medicaid per diem payments to Newton by the amount of beneficiaries’ cost-of-care contributions from resources, such as Social Security and pensions. As a result, the State agency’s Federal claim was overstated by a total of approximately $28,000 ($16,000 Federal Share). We attributed the incorrect Medicaid payments to clerical and billing errors. ------------------------------------------------------------------------------ Allowability of Recovery Act Costs Claimed by Grace Hill Neighborhood Health Centers, Inc., for the Period June 29, 2009, Through June 28, 2011 (A-07-11-05021) http://go.usa.gov/rwcQ Costs claimed by Grace Hill Neighborhood Health Centers, Inc. (Grace Hill), under a Capital Improvement Program grant were generally allowable pursuant to applicable Federal regulations and the terms of the grant. The Health Resources and Services Administration (HRSA) awarded this grant to Grace Hill using American Recovery and Reinvestment Act of 2009 funding in support of the Health Center Program. However, Grace Hill’s accounting system allowed for a cash advance of $78,000 for costs that were not directly related to the project. Although these costs were later reclassified, the potential existed for Grace Hill to accrue interest on those funds until they were actually used to pay for direct project costs. ------------------------------------------------------------------------------ Rutgers, The State University of New Jersey’s Costs Claimed Under the Recovery Act for National Institutes of Health Grant Number 1RC1CA147187-01 Were Allowable (A-02-11-02010) http://go.usa.gov/rwcw The $931,000 of Recovery Act funds that Rutgers, The State University of New Jersey claimed through February 28, 2012, for National Institutes of Health award 1RC1CA147187-01 was considered allowable under the terms of the contract and applicable Federal regulations. ------------------------------------------------------------------------------ Review of Select Expenditures Claimed by The Research Foundation of the State University of New York, State University of New York at Stonybrook (A-02-11-02008) http://go.usa.gov/rwxx The Research Foundation of the State University of New York (the Foundation) generally claimed Federal reimbursement for select expenditures in accordance with Federal regulations. Of the 878 expenditures that we reviewed, 850 complied with Federal regulations, but 28 expenditures totaling $18,000 did not. During the period February 7, 2009, through June 30, 2010, the Foundation received $104.4 million in funding under the American Recovery and Reinvestment Act of 2009. ------------------------------------------------------------------------------ Bio Signal Group Corp., Did Not Always Claim Recovery Act Costs in Accordance With Federal Requirements (A-02-11-02009) http://go.usa.gov/rwx5 In March 2010, the National Institutes of Health awarded Bio Signal Group Corp. (Bio Signal), a for-profit company in Brooklyn, New York, a 3-year grant totaling $2.9 million under the American Recovery and Reinvestment Act of 2009. Of that amount, we reviewed $725,000 in costs claimed by Bio Signal. We determined that Bio Signal did not always claim costs in accordance with the terms of the Recovery Act grant and applicable Federal regulations. Bio Signal claimed $581,000 in allowable costs. However, the remaining costs totaling $144,000 were not allowable. ------------------------------------------------------------------------------ Corporate Integrity Agreement (CIA) List Update http://go.usa.gov/vK2 Two CIAs added to the list today. ------------------------------------------------------------------------------ September 6, 2012; U.S. Department of Justice United States Intervenes in False Claims Act Lawsuit against Orlando, Florida-area Hospice http://go.usa.gov/yWn ------------------------------------------------------------------------------ September 6, 2012; U.S. Attorney; District of Connecticut Danielson Pharmacist Who Illegally Dispensed Prescription Drugs Is Sentenced http://go.usa.gov/yWn ------------------------------------------------------------------------------ State Enforcement Actions Updated http://go.usa.gov/pqp ------------------------------------------------------------------------------ That’s all we have for today. If we can be of any further assistance, please send an Email to public.affairs@oig.hhs.gov I hope your week has started well. Marc Wolfson – Office of External Affairs OIG’s privacy policy can be found at http://oig.hhs.gov/notices/privacy-notice.asp
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OIG posts 7 reports, updates the CIA List and provides news about enforcement actions - 9/10
