BP - Health Care Compliance Association

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Increased government oversight of managed care plans ...continued from page 55 might, for example, go about reviewing or investigating transactions between pharmaceutical manufacturers and physicians for purposes of identifying “inappropriate transactions” or “illegal remuneration schemes.” Examples provided by CMS of the fraud or misconduct for each type of entity for which the plan sponsor must be vigilant include: 1. PBMs – inappropriate formulary decisions; prescription drug switching; unlawful remuneration; inappropriate formulary decisions. 6 2. Pharmacies – inappropriate billing practices; prescription drug shorting; prescription refill errors. 7 3. Prescribers – illegal remuneration schemes; prescription drug switching; provision of false information. 8 4. Wholesalers – counterfeit and adulterated drugs through black and gray market purchases. 9 5. Pharmaceutical manufacturers – kickbacks, inducements, other illegal remuneration; formulary and formulary support activities; inappropriate relationships with physicians. 10 Additionally, plan sponsors must “identify overpayments and underpayments at any level within the sponsor’s network.” 11 Upon learning of possible fraud or abuse within its network of first tier, downstream, and related entities, a plan sponsor must conduct a “reasonable inquiry,” and, upon determining that potential fraud or misconduct related to the Part D program occurred, must promptly report the conduct to a Medicare Integrity Contractor (MEDIC). The scope of the potential “fraud or misconduct” is not limited to particular jurisdictions or even just criminal laws. CMS instructs plan sponsors to “refer potential violations of applicable federal and state criminal, civil and administrative laws, rules and regulations to the MEDIC and/or law enforcement for further investigation.” 12 In sum, for Part D plan sponsors, CMS has prescribed a system under which Part D plan sponsors must implement monitoring and auditing processes focused on the entire pharmaceutical delivery system, from manufacture to dispensing. (The reasonableness and wisdom of this “soup to nuts” approach is discussed in Part II of this article.) CMS oversight in this area has, however, been minimal to date. In August 2008, the Government Accountability Office (GAO) issued a report showing that a selected sample of Part D sponsors had not fully implemented all of CMS’ required fraud and abuse compliance plan elements, including the monitoring and auditing requirements, and recommended that “CMS conduct timely audits of Part D sponsor’s fraud and abuse programs.” 13 The GAO noted that CMS had not audited Part D sponsors’ fraud and abuse programs in 2007 and did not plan to do so in 2008. 14 In an October 2008 audit report, HHS‐OIG found that although CMS conducted 19 audits of plan sponsors in 2007, only one of these audits included a review of the sponsors’ compliance plan. Also, HHS‐OIG reported that although CMS stated that its MEDIC would begin auditing sponsors’ compliance plans in summer 2008, as of early August 2008, the MEDICs had not yet done so. HHS‐OIG recommended that CMS “conduct routine audits of PDP sponsors’ compliance plans to ensure that these compliance plans meet all federal requirements. Specifically, these audits should cover all compliance plan requirements contained in regulations as well as requirements included in Chapter 9 of the ‘Prescription Drug Benefit Manual.’” 15 In its defense, CMS has cited the lack of funding from Congress as a reason for its limited fraud and abuse program oversight. 16 CMS funding issues notwithstanding, as evidenced by the specific reference to reviews of plan sponsors’ fraud and abuse programs in the HHS-OIG 2009 Work Plan, plan sponsors should anticipate that CMS and its MEDICs will begin a more vigorous program of auditing the fraud and abuse programs of Part D sponsors. Medicare Advantage Plans As of the publication deadline for this article, CMS intended to issue fraud and abuse guidance for Medicare Advantage plan sponsors for implementation in early 2009. 17 In the meantime, CMS advises Medicare Advantage plans to rely on the fraud and abuse guidance from the Part D Prescription Drug Benefit Manual. 18 Because Medicare Advantage plans cover many medical services other than prescription drugs, the Manual’s specific guidance concerning fraud and abuse by PBM’s and pharmacies is less relevant than its general fraud and abuse guidance. An application of the Manual’s general approach by Medicare Advantage plan sponsors would seem to require that those plans monitor and investigate providers in the plan’s network for potential fraud and abuse. The physicians, hospitals, laboratories, durable medical equipment (DME) providers, etc. in the Medicare Advantage plan’s network presumably comprise the “first tier,” “downstream,” and “related” entities involved in the administration or delivery of Medicare Advantage plans’ members’ health care services and products. Specific areas for fraud and abuse monitoring and investigation will likely include things like billing for services not rendered, upcoding, unbundling, and other traditional types of provider fraud. Also, as required in the Part D Manual, March 2009 56 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
Medicare Advantage plan sponsors may be responsible (however implausibly) for monitoring illegal remuneration schemes involving providers and “downstream” entities (e.g., potentially unlawful payments from a supplier to a physician). Medicare Advantage plan sponsors will also likely have specific reporting requirements for referrals to program safeguard contractors. In short, Medicare Advantage plans will be given specific guidelines for monitoring, investigating, and reporting external fraud and abuse, but the Part D Manual does provide clues about CMS’ fraud and abuse compliance expectations that plan sponsors should consider acting upon now. Medicaid HMOs As is the case with the Medicare-related plans, Medicaid HMOs (health maintenance organizations) too, face increasing compliance demands with respect to provider fraud and abuse activity. This movement began taking shape as part of CMS’ (then called the Health Care Financing Organization or HCFA) “National Medicaid Fraud and Abuse Initiative.” In HCFA’s “Guidelines for Addressing Fraud and Abuse in Medicaid Managed Care,” published in October 2000, HCFA asserted that “[w]hether established as a compliance program or a state-approved fraud and abuse plan, managed care organizations should undertake such efforts as . . . developing procedures to monitor service patterns of providers, subcontractors, and beneficiaries.” 19 More succinctly, “[t]he MCO should be monitoring provider fraud . . . .” 20 And, according to HCFA, “[a]n MCO might identify provider fraud and abuse by reviewing for a lack of referrals, improper coding (upcoding and unbundling), billing for services never rendered or inflating the bills for services and/or goods provided.” 21 Never Face a Compliance or Ethics Challenge Alone Now you can meet and collaborate with ethics and compliance professionals year round and around the clock. The Compliance & Ethics Social Network puts you directly in touch with your peers. Get your questions answered. Learn from what others are doing. Share your experience, policies, and other documents. To get started: • Go to community.hcca-info.org. • Log in using your e-mail address and HCCA password. • Click “Social Network” (in the top black bar). • Click the name of a community (or communities) that interest you. • Select your communications option and save. • Start communicating and collaborating! • Maybe set up your own community… It’s fast, easy, and can help improve both your work and the profession as a whole. Sign on today. Moreover, the federal government has recently placed increased emphasis on Medicaid fraud and abuse as exemplified by the antifraud provisions of the Federal Deficit Reduction Act (DRA). 22 Though it has begun implementing the Medicaid Integrity Program pursuant to the DRA’s directive, CMS has not focused much on managed care, apparently Continued on page 58 HCCA’S Compliance & Ethics Professional Social Network 57 March 2009
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Volume Eleven Number Three March 20
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Publisher: Health Care Compliance A
Page 5 and 6: incrementally, and CMS has made cle
Page 7 and 8: New developments in payment and pub
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Page 17 and 18: tions anytime, anywhere. Third, und
Page 19 and 20: The Jones Day/HCCA iPod ® Nano Giv
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Page 25 and 26: ASK LEADERSHIP Compliance Today Nee
Page 27 and 28: YOUR INFORMATION FYIFOR Declining e
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Page 31 and 32: Health Care Compliance Association
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Page 61 and 62: New HCCA Members The Health Care Co
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