OIG Targets FL Providers for Medicare Abuses

Miami-Dade County in Florida was again targeted for higher per capita medical spending and questionable billing practices during 2009 in two  Office of Inspector General reports, one which scrutinized spending on inhaler medications and the other which examined costs for outpatient therapy.

In the first report, the agency found that Medicare paid suppliers in South Florida for up to 10 times more units of the inhalation drug arformoterol than the drug's manufacturer and the three largest wholesalers distributed for sale in the area in 2008 and the first half of 2009, suggesting that suppliers were billing for drugs that were never purchased.

"Based on data for the manufacturer and the 3 largest wholesalers, Florida suppliers billed Medicare for up to 17 times than the amount that could have legitimately been billed," the OIG report said.

"Furthermore, the $62 million billed by South Florida suppliers for arformoterol during this period far exceeds the total possible sales in the area," the agency said. "Based on sales data for arformoterol's manufacturer and the three largest wholesalers, it does not appear that these suppliers purchased enough of the drug to justify these payments."

"South Florida is known for its susceptibility to Medicare fraud, particularly by DME suppliers," the report continued. "A previous Office of Inspector General (OIG) report identified potential fraud related to billings for budesonide (another inhaler drug) by South Florida suppliers." 

In September, 2008, a Medicare contractor implemented a computerized system, called an "edit" to detect and deny claims that exceed the maximum milligrams that a physician can safely prescribe to a beneficiary for budesonide, and the edit did decrease these billings by and Medicare payments to South Florida durable medical equipment suppliers.

"However, South Florida suppliers instead began billing for another brand-name inhalation drug, arformoterol.  The substantial difference between the sales data provided by arformoterol's manufacturer and the claims data for South Florida suppliers suggests that these suppliers were billing for drugs that may not have been actually purchased."

In the report that looked at questionable billing for outpatient therapy, the OIG said that Miami-Dade had "the highest average Medicare payments per beneficiary" and the highest total Medicare payments for outpatient therapy in the country in 2009. 

It then identified "six questionable billing characteristics that may indicate fraud."

Those practices included services for which providers indicated that an annual cap would be exceeded, beneficiaries whose providers indicated that an annual therapy cap would be exceeded on the beneficiaries' first date of service, payments for beneficiaries who received outpatient therapy from multiple providers, payments for therapy services provided throughout the year, payments for services that exceeded an annual cap and providers who were paid for more than eight hours of outpatient therapy provided in a single day.

The OIG said questionable billing practices for five of these six practices occurred three to four times the national level.

The OIG report says that the Medicare per beneficiary spending on outpatient therapy services in Miami-Dade was three times the $1,078 national average, and each therapy beneficiary in the county received an average of 158 services in 2009, much higher than the national average of 49.

Therapy providers that served Miami-Dade beneficiaries received $83,867 on average, eight times what providers in other counties were paid.

"We found that per-beneficiary spending on outpatient therapy in Miami-Dade County was three times the national average in 2009," the agency said in the first report.  "We also found that Miami-Dade County had high levels of questionable billings for outpatient therapy.  Nineteen additional counties also exhibited questionable billing, but to a lesser extent than Miami-Dade."
It recommended that the Centers for Medicare and Medicaid Services target outpatient claims in high-utilization areas for further review and pay more attention to areas that exceed therapy caps.

According to Dartmouth Atlas researchers, the Miami area had the highest adjusted per capita Medicare spending, an example of geographic variation in medical costs without a correlating improvement in quality.