CMS Ditches Reporting of Adverse Actions

WASHINGTON — While CMS rolled out new rules for
Medicare enrollment and revalidation earlier this week in an
effort to rein in fraud, the agency didn’t report all of the
adverse actions it took against DME providers and many others,
according to a new report from HHS’ Office of Inspector
General.

Part of the problem came from CMS’ unawareness of the types of
actions it had to report, the OIG said. But in the case of actions
against DME suppliers, the reports were ditched in a cost-saving
move.

Both federal and state government agencies and health plans are
required to report adverse actions to the Healthcare Integrity and
Protection Data Bank (HIPDB), a national databank that contains
reports of adverse actions against health care practitioners,
providers and suppliers. Those actions include licensure and
certification actions, exclusions from participation in federal and
state health care programs, criminal convictions, civil judgments
related to health care and any other adjudicated actions or
decisions that the HHS Secretary establishes by regulation.

“The HIPDB plays an important role in preventing the employment
of potentially fraudulent or abusive health care providers, so it
is important that the information it contains be complete and
accurate,” the OIG said.

But its report, issued Sept. 21, found that CMS officials
thought only adverse actions related to fraud and abuse had to be
reported when, in fact, the agency is supposed to report
revocations and suspensions of laboratory certifications, provider
terminations from participating in Medicare and civil monetary
penalties against all types of providers, managed care plans and
prescription drug plans.

As of April 30, 2009, the HIPDB contained 5,125 adverse actions
against DME suppliers imposed from 1998 through 2008. But the
databank contained no adverse actions against DME suppliers taken
after 2008, the report said, “although DME fraud is an ongoing
issue in Medicare — Medicare paid more than $30 million in
fraudulent claims to DME suppliers in 2008 alone.”

What’s more, the OIG added, CMS officials said the agency quit
reporting those adverse actions as a cost-saving measure.

“According to the officials with whom we spoke, CMS is no longer
reporting adverse actions taken against DME suppliers to the
HIPDB,” the report said. “CMS officials responsible for overseeing
provider enrollment explained that the 5,125 adverse actions were
reported by a contractor that processes enrollment applications for
DME suppliers. However, in October 2008, CMS issued a new Statement
of Work discontinuing the requirement for this contractor to report
enforcement actions to the HIPDB. CMS officials said this change
was a cost-saving measure.”

The report also found that none of the 148 adverse actions
imposed by CMS against laboratories in 2007 or the 30 adverse
actions imposed against managed care and prescription drug plans
between Jan. 1, 2006, and July 31, 2009, were reported to the
HIPDB. None of the 45 nursing homes terminated from Medicare from
2004 to 2008 were reported until 2009. The Division of National
Systems, the group within CMS responsible for reporting adverse
actions against certified provider types, did not report any
actions between 2001 and 2008.

In its report, the OIG recommended that CMS report all adverse
actions to the HIPDB as required, and noted CMS should educate
staff and contractors about the types of adverse actions to be
reported and the timeframes for reporting.

CMS concurred with the OIG’s recommendation and described plans
to report adverse actions imposed against nursing facilities,
laboratories and DME suppliers. The agency said it had issued
instructions to the National Supplier Clearinghouse (the DME
enrollment contractor) to submit reports for suppliers whose
Medicare billing privileges were revoked in 2009. CMS also said it
would establish procedures to ensure the NSC reports adverse
actions monthly to the HIPDB.

Read the full report, titled “CMS Reporting to the Healthcare
Integrity and Protection Data Bank,” at http://www.oig.hhs.gov/oei/reports/oei-07-09-00290.pdf.