House Energy & Commerce Oversight and Investigations Subcommittee Holds Hearing on Medicare and Medicaid Program Integrity
June 1, 2016 12:42 PM
The U.S. House of Representatives Energy & Commerce Oversight and Investigations Subcommittee held a hearing on Tuesday, May 24, 2016, titled, “Medicare and Medicaid Program Integrity: Combatting Improper Payments and Ineligible Providers.” In announcing the hearing, Subcommittee Chairman Tim Murphy (R-PA) highlighted estimates released by HHS that in 2015 there was $89 billion dollars in improper payments through Medicare and Medicaid—9.8 percent in Medicaid and 12.1 percent in Medicare fee-for-service. Members of Congress asked the witnesses to explain the rate of improper payments and what CMS is and should be doing to reduce the rate.
The hearing witnesses included Dr. Shantanu Agrawal, Deputy Administrator and Director of the Center for Program Integrity at the Centers for Medicare & Medicaid Services (CMS); Mr. Seto J. Bagdoyan Director of Audit Services, Forensic Audits and Investigative Service at the U.S. Government Accountability Office; and Ms. Ann Maxwell, Assistant Inspector General in the Office of Evaluation and Inspections, Office of Inspector General at the U.S. Department of Health and Human Services.
Dr. Agrawal attempted to address the concerns of the lawmakers by explaining steps CMS is taking to reduce improper payments. He also stated the difference between improper payments and fraud, and he argued that the driving cause of the improper payment rate is largely documentation problems. “The improper payment rate is driven by documentation problems,” he said. “Seventy percent of the rate is provider-driven documentation issues. That is, for example in the home health space, lack of coordination between the ordering physician and the home health agency.”
Dr. Agrawal noted that, in Medicare fee-for-service, home health services have had “particularly high improper payment rates in recent years” due to new documentation requirements. Most of these documentation problems are attributed to ongoing problems with the home health face-to-face requirements. In order to address these problems, Dr. Agrawal said, CMS is working to clarify the various requirements to improve compliance. “CMS believes clarifying requirements will lead to a decrease in these errors and improve provider compliance with regulatory requirements, while continuing to strengthen the integrity of the Medicare program,” he said. “To ensure providers understand the regulations and documentation requirements, CMS has implemented a probe and educate program for all home health agencies. This program reviews a small number of claims for every home health agency, identifies whether the reviewed claims complied with Medicare policies, and offers education to providers who require assistance in properly documenting home health claims.”
Rep. David McKinley (R-WV), who was among the 116 members of the U.S. House who signed the letter to CMS on the home health prior authorization demonstration, reiterated his concerns about the prior authorization demonstration during the hearing. He asked why the prior authorization demonstration has been instituted “across-the-board” rather than being more focused on those who have a history of “violating the system.” He also stated that currently “everyone is being punished,” which “doesn’t make sense.” Dr. Agrawal responded that he is “very open to a more focused prior authorization, really focused on bad actors and folks that have high denial rates,” but that “more experience” is necessary “before we get there.”
In explaining other steps CMS has taken to improve program integrity, Dr. Agrawal noted the enrollment moratoria on home health agencies in certain geographic locations with a disproportionately high number of providers and extremely high utilization rates. Since the moratoria was imposed in July 2013, he said, 848 HHAs in all geographic areas affected by the moratoria had their applications denied.
With regards to Medicaid, Dr. Agrawal said the improper payment rate has increased due to a lack of complete state compliance with new requirements under the ACA such as that all referring or ordering providers be enrolled in Medicaid and that states screen providers under a risk-based screening process prior to enrollment. He said, “While these requirements will ultimately strengthen Medicaid’s integrity, it is not unusual to see increases in improper payment rates following the implementation of new requirements because it takes time for states to make systems changes required for compliance.”
Given the acknowledgement by CMS that documentation issues are the driving force behind improper payment rates in Medicare, following the hearing the National Association for Home Care & Hospice (NAHC) called on CMS to explore alternatives to the current unmanageable face-to-face encounter documentation requirements given that early indications are that high error rates are continuing in the probe and educate audits. NAHC strongly believes that CMS must eliminate the current documentation requirements as they are fatally burdened by a lack of clarity and by holding the home health agency responsible for a physician’s documentation. NAHC also continues to pursue a legislative remedy to the face-to-face documentation nightmare with increasing bipartisan, bicameral support. CMS’s admission of ongoing documentation management problems in home health will help those efforts.