This is an archive page. The links are no longer being updated.

Date: Tuesday, May 20, 1997
FACT SHEET
Contact:  OIG Press Office (202) 619-1343, HCFA Press Office (202) 690-6145                           

ACCOMPLISHMENTS OF THE TWO-YEAR DEMONSTRATION:

• Identified $23 in recoveries for every $1 spent on ORT.
• Identified a total of more than $187.5 million in fines, recoveries, settlements, audit disallowances and civil monetary penalties owed to the Federal Government.
• At the present time, there are 210 pending cases. One hundred fifty-five of the 210 cases are joint investigations with other law enforcement agencies, including the Federal Bureau of Investigation, the United States Postal Service, the Railroad Retirement Board OIG, the Defense Criminal Investigative Service and State Attorneys General offices.
• Achieved 74 criminal convictions, 58 civil actions and 69 current indictments as a result of Operation Restore Trust. In addition, 218 providers have been excluded.
• Issued 47 audit and inspection reports related to Operation Restore Trust. At the present time, another 31 audits and evaluations are underway. In addition, HCFA has completed reviews at 168 home health agencies and nursing homes.
• Since the special hotline was established in June 1995, it has received over 13,000 complaints related to Department programs.

• The OIG reviewed 100 claims (representing 1,784 home health services) submitted for Medicare reimbursement by a Florida HHA during the fiscal year ended December 31, 1993. Thirty-two percent of the sample contained 353 services that did not meet Medicare guidelines: 23 percent were for 262 services that were not reasonable or necessary; 5 percent were for 69 services provided to beneficiaries who were not homebound; 3 percent were for 17 services which physicians did not authorize; and 1 percent were for 5 services not provided. During this fiscal year period, the HHA claimed $12 million in 8,700 claims representing 151,015 services. Based on its review, OIG estimates that at least $1.7 million did not meet the reimbursement guidelines.
• The OIG determined that 44 percent of the claims made by another Florida HHA for home health care services for the year ended December 31, 1993, did not meet Medicare reimbursement guidelines. Twenty-five percent of the claims were for services which, in the opinion of medical experts, were not reasonable or necessary; 14 percent were for services to beneficiaries who were not homebound; 3 percent were for services which physicians did not authorize; and 2 percent were for services not provided. Of the $6.7 million claimed by the HHA for the year, OIG estimated that at least $1.2 million did not meet the reimbursement guidelines. In its response to the draft report, HCFA concurred with the recommendations.
• OIG examined the effects of home health agencies' operating practices on the wide variation in average number of visits per Medicare beneficiary. One report, based on a survey of 300 randomly selected home health agencies, examined operating practices and philosophies of the high- and low-cost agencies to ascertain whether there were differences which would account for the variation in the average number of visits per beneficiary. The OIG found no differences in operating practices that could account for the variation. These findings reinforce OIG's conclusion that the explanation for these wide variations among home health agencies in average number of visits per beneficiary probably lies in the existence or lack of controls on the benefit. Unless increased oversight can be applied to the benefit, regulatory or legislative changes might be necessary.

Nursing Homes

• A California psychiatrist signed an agreement to pay the Government $300,000 to settle allegations related to Medicare fraud. He provided psychiatric care to Medicare beneficiaries in nursing homes in California, Rhode Island, Florida, Texas, New York, Washington and Oregon. His scheme involved duplicate billing through two separate entities, both of which he owned. During the investigation, his various companies were found to have 24 different mailing addresses, 23 different telephone numbers and at least 12 different provider numbers.
• An Illinois ambulance company owner and one of his employees were sentenced after pleading guilty to Medicare and Medicaid fraud. They had been planning to go to trial when an OIG agent reviewing documents suspected the papers had been prepared to support their position. The agent found the printer who printed the forms and discovered they were printed long after the dates appearing on them. When told that the U.S. Attorney was considering charging the subjects with obstruction of justice, they decided to plead to the pending charges. The two had filed false and inflated claims for same-day round-trip transfers of nursing home patients as bed-confined, or for other higher levels of service than that performed. The company owner was sentenced to 5 months incarceration and 5 months home confinement, and was ordered to sell his business by November 23, 1996. He was fined $10,000 and must make restitution of $15,810 to Medicare and Medicaid. Earlier he agreed to a $367,000 civil settlement. The employee was given 2 years probation and fined $500.

• One of the highest-reimbursed Medicare suppliers of incontinent care products in the United States agreed to plead guilty in Florida to conspiracy to defraud Medicare of $70.8 million. It also agreed to forfeit $32 million seized in bank accounts. It distributed adult diapers to nursing homes but billed Medicare for female urinary collection pouches. It also billed throughout the country for components of incontinence kits that were not medically necessary. The owner pled guilty earlier to mail fraud in a similar case in Kansas and agreed to pay $5 million in restitution of overpayments resulting from false claims to Medicare, Medicaid and private insurers. The two cases were consolidated, and the owner was to be sentenced. He has agreed to cooperate fully and testify in ongoing investigations and future prosecutions.
• One area of DME that has suffered significant abuse has been the purchase of lymphedema pumps. These pneumatic compression devices are used to treat swelling of tissues resulting from accumulation of fluid from lymphatic blockages. The blockages can result from malignancies, diseases, surgery or radiation. The pumps range in sophistication and can cost from $600 to $6,000.

  In the early 1990's the only manufacturer of the expensive pumps complained that it was losing sales because DME suppliers were providing less expensive pumps but were billing for the most expensive. In the meantime, Medicare payments had soared from $6.3 million in 1990 to $118 million in 1995. The manufacturer's complaint prompted OIG to begin a series of investigations that showed that the practice of upcoding appeared widespread in the industry. Medicare required supporting CMNs in order to pay for the pumps, but some suppliers simply forged them to reflect the need for the expensive items or upgraded the billing code -- while supplying lower-cost pumps. In addition to criminal prosecutions, OIG joined DOJ in pursuing civilly suppliers that overbilled.

  Under new Medicare manual instructions, segmented pneumatic compression devices with manual controls were covered only after it was determined that a less costly device was not satisfactory. This instruction is based on Medicare policy that payment for devices should be limited to the least costly alternative that effectively treats the patient's condition.

  Predictably, Medicare payments for lymphedema pumps dropped dramatically, from $118 million in 1995 to less than $14 million in the first 9 months of 1996. The successful interaction of OIG, HCFA, the DMERCs, DOJ and the industry clearly contributed to this result.

  The OIG is undertaking a study to assess whether Medicare allowances for lymphedema pumps are excessive, if attending physicians have prepared required treatment plans governing their patients' use of the pumps, whether physicians and suppliers are providing required oversight and monitoring services for beneficiaries using these devices, and how physicians determine whether a patient gets the most or least expensive pump.

• The findings from several OIG inspections conducted 2 years ago indicated that suppliers were engaged in questionable marketing practices and that beneficiaries were receiving unnecessary or noncovered incontinence supplies. Since those reports were issued, a joint OIG/HCFA effort to address the problem resulted in the initiation of an OIG audit review of this area and a national investigation that examined potentially fraudulent practices by specific suppliers. The OIG supported ongoing activity in HCFA and the DMERCs to develop more specific coverage guidelines and educate providers about proper billing.

  Since the targeted initiative began that put the abusive suppliers on notice, the combined efforts of OIG, HCFA and the DMERCs have put a stop to the abusive practices. Recent follow-up work indicates that Medicare payments for incontinence supplies dropped by $110 million in one year. Of this $110 million drop in 1995, savings of $104 million are directly attributable to a halt in the abusive practices identified by OIG.

BENEFICIARY OUTREACH

The involvement of beneficiaries in identifying and reporting suspected fraud and abuse was shown by ORT to enhance effectiveness in fighting fraud and abuse.

Administration on Aging

The AoA, working closely with its federal, state and local partners, made significant contributions resulting from training of volunteer and paid aging network staff and volunteers and outreach activities intended to prevent older persons and their families from being victimized by Medicare scams. Successful activities and results include:

• Conducting focus programs with community based agencies to reach older persons in greater Chicago, central Florida, Los Angeles, and New York City;
• Developing and distributing of flyers (in English as well as other languages) on health care fraud and abuse;
• Disseminating through its vast network of state and community based agencies special fraud alerts, Medicare advisory bulletins, pamphlets and brochures developed by the ORT federal partners;
• Convening media events (in New York City, Orlando, Los Angeles, Chicago, Seattle, Washington D.C., etc.) to generate greater interest in health care fraud and abuse;
• Conducting special training for adult protective service workers, public housing supervisors, senior center coordinators, etc, on detecting and reporting Medicare fraud and abuse;
• Conducting workshops on preventing health care fraud and abuse, aimed at professionals attending national conferences of aging and advocacy organizations;
• Assisting states in conducting health care fraud and abuse workshops at governors conferences on aging;
• Assisting aging network agencies in publicizing efforts to combat health care fraud and abuse by providing information for articles to be carried in their regular newsletters to older persons.

• Based upon the recommendation of the South Florida Task Force, the Health Care Financing Administration (HCFA) opened an office in Miami on September, 1995, to focus exclusively on fraud and abuse scams in this area. The office supports the investigative efforts of the South Florida Law Enforcement Task Force, a partnership of Federal and State agencies, including Office of the Inspector General, the FBI, the U.S. Attorney's office, and contractors, charged with improving anti-fraud efforts in this region.

  The office, with bilingual staff, conducts outreach and educational activities. Staff have conducted an education campaign in the area, with meetings and briefings at town centers, seniors centers and other sites where seniors congregate. Bilingual flyers with the ORT 800-number and information about identified fraud scams have been distributed to better inform beneficiaries, their families and various organizations about specific fraud and abuse problems.

  The Miami office has assisted the U.S. Attorney's office in seeking an extension of a temporary restraining order, freezing the assets of a medical clinic transporting patients into the Miami area for unauthorized diagnostic testing. On site surveillance identified a second address used by the clinic. State investigations into home health fraud in South Florida have led to the suspension of payments for two home health agencies, others are awaiting a final determination.

• The OIG issued three fraud alerts and have others under development. The three issued to date were on: Home Health Fraud; Fraud and Abuse in the Provision of Medical Supplies to Nursing Facilities; and Fraud and Abuse in the Provision of Services in Nursing Facilities. The OIG also issued a Medicare Advisory Bulletin to warn consumers and health care professionals about questionable practices affecting Medicare's hospice program.
• The 1-800-HHS-TIPS hotline has been in operation since June 27, 1995. Since it was put into service, the hotline has received nearly 14,000 complaints that warranted follow-up action. The hotline is staffed Monday through Friday, 9 a.m. to 8 p.m. eastern time. Callers do not have to give their names.

OTHER HHS ANTI-FRAUD EFFORTS

The continuation of Project ORT is designed to aid in the implementation of the Government's broader responsibilities under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The HIPAA required the Secretary, acting through the Inspector General, and the Attorney General to establish a "fraud and abuse control program" that would, among other things, coordinate Federal, State and local law enforcement programs and expand their activities on a nationwide "all- payer" basis.

The OIG and Department of Justice (DOJ) have issued extensive guidelines for operation of the fraud and abuse control program, have established a process for issuing "advisory opinions" as required under the law, and are expanding efforts to establish law enforcement task forces in each of the 96 judicial districts in the country along with the other health-related Inspectors General (Department of Labor, Department of Veterans Affairs, Office of Personnel Management and the Department of Defense).

The OIG has begun the important job of hiring additional auditors, investigators, evaluators and attorneys to accomplish the Office's responsibilities under the expanded anti-fraud and abuse program. Fiscal year 1997 funding for the OIG is being used to open new offices and increase the number of investigators, audits and inspections.

• Six new field offices: New offices have been opened in Nashville and Hartford, and are soon to be opened in Des Moines, Oklahoma City, Columbia, SC, and Cleveland. These opening will increase from 26 to 31 the number of states in which the OIG has a presence. Eight more field offices are planned for FY 1998, and by the end of 2002, the OIG plans to have offices in most States.

The additional funding from HIPAA will be used to:

• Coordinate Federal, State, and local health care law enforcement programs to control fraud and abuse with respect to health plans;
• Conduct investigations, audits, evaluations, and inspections relating to the delivery of and payment for health care;
• Facilitate enforcement of civil, criminal and administrative statutes applicable to health care fraud and abuse;
• Provide industry guidance relating to fraudulent health care practices; and
• Establish a national data bank to receive and report final adverse actions against health care providers.
###