Investigations by the U.S. Office of Inspector General have yielded almost $26 billion in savings and expected recoveries of taxpayer dollars in fiscal year 2010, according to a year-end report issued this week.
The savings and recoveries come from a wide array of actions taken against large companies, such as pharmaceutical firms, individuals, and against problems within Medicare's own contractor system and error detection programs.
Among some of the most noteworthy investigation findings were these:
• After a Medicare Fraud Strike Force investigation, Jose Castro-Ramirez and Suresh Chand, who were sentenced to prison terms of 14 and six years respectively, were convicted of paying Medicare beneficiaries cash kickbacks in exchange for their Medicare numbers and false statements they received services.
• AstraZeneca Pharmaceuticals agreed to pay $520 million plus interest and enter a corporate integrity agreement in connection with inappropriate promotion of its antipsychotic drug, Seroquel over five year period. The company "was alleged to have violated the federal anti-kickback statute by offering and paying illegal remuneration to doctors in connection with services rendered by doctors related to the unapproved uses of Seroquel," the report said.
Several companies agreed to pay $7.3 million to settle accusations they violated provisions of the Stark law. For example, physician-owned United Shockwave Services Ltd, United Urology Centers and United Prostate Centers entered into a corporate integrity agreement dealing with accusations that United solicited money from hospitals in exchange for patient referrals.
"It was alleged that United threatened hospitals that it would refer patients to competing hospitals if they did not agree to a contract with United, or promised additional referrals to hospitals that did contract with United Public Health," the report said.
• Nine healthcare employees of MultiEthnic Behavioral Health Services Inc. of Philadelphia were sentenced to prison terms ranging from 15 months to 17.5 years as a result of fraud accusations and the death of an at-risk child said to be under MEBH's care.
"Federal and local investigators found that MEBH employees did not provide any services to the at-risk child with cerebral palsy, even though she was under their care. The child suffered severe bed sores and extreme weight loss as she slowly starved to death," the OIG report said.
"The company's employees "then attempted to conceal the incident by destroying old records and creating new false records of the child's care."
• Medicare's Program Safeguard Contractors, which identify and refer Medicare overpayments to claims processors for collection, did not result in significant recoveries. In fact, "only 7% ($55 million of $835 million) had been collected by claims processors as of June, 2008," although 4,239 overpayments had been referred.
• $34 million was overpaid to inpatient rehabilitation facilities for claims "that were improperly coded as discharges to home rather than transfers to other facilities." Medicare pays more when facilities discharge patients directly to home than for a transfer. The OIG found that even though the Centers for Medicare and Medicaid Services detected the miscoded claims, "fiscal intermediaries did not adjust the claims to prevent overpayments."
• As a result of a different investigation, the OIG found that some of these inpatient rehabilitation facilities were overpaid $20.2 million for claims with late patient assessment instruments.
Under Medicare Part D, the office found two expensive problems.
• Medicare drug plans and enrollees paid pharmacies $1.2 billion in 2007 for more than 18 million prescription drug claims that contained 527,749 invalid prescriber identifiers. The claims lacked valid National Provider Identifier, Drug Enforcement Administration, or Unique Physician Identification number, or used numbers that had been deactivated before Jan. 1, 2006.
Additionally, Medicare drug plans and enrollees paid $237 million for these drugs. And, just one of the "top 10 invalid prescriber identifier numbers was recorded on almost 1.8 million prescription drug event (PDE) records for more than 150,000 beneficiaries enrolled with 248 different Medicare drug plan sponsors.
• For calendar years 2006 and 2007, Medicare paid $43.3 million for less-than-effective drugs because the Part D program used an incomplete list of these drugs." These are drugs that Medicare approved before 1962 and for which the U.S. Food and Drug Administration has determined to be "less than effective." Also, the OIG criticized CMS because there is no definitive list of these drugs, although CMS said the responsibility belonged to the FDA.
For Medicaid, the OIG found problems with delivery of services for eligible children in nine states, most of whom who were not fully benefitting from the program's Early and Periodic Screening, Diagnostic and Treatment comprehensive screening services. "We found that 76% of children in these states, or 2.7 million children, did not receive all of the required number of medical, vision and hearing screenings," the report said.