Corporate Compliance

OIG saved government $30 billion, report says

Compliance Monitor, December 16, 2004

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In addition to reporting savings of approximately $30 billion, the OIG excluded 3,293 individuals and entities for fraud or abuse of federal healthcare programs and/or their beneficiaries, according to its semi-annual report released December 9. Here's a list of some of the OIG's achievement highlights-and lowlights-for fiscal year 2004:

1. Prescription drugs

  • In 2003, Medicare paid significantly higher rates-between 5% and 68% higher-for 10 End Stage Renal Disease (ESRD) drugs than did dialysis providers and facilities. CMS has changed reimbursement rates and billing requirements for dialysis facilities for 2005.
    Note: E-mail Medicare Reform Advisor editor Bryan Cote if you're interested in more information.
  • Pfizer, Warner-Lambert, and Parke-Davis settled for $430 million and pled guilty to violating the Food, Drug and Cosmetic Act by marketing its drug Neurontin for off-label use that was not approved by the FDA.

    2. Durable medical equipment

  • It published two inspections on Medicare's reimbursement for power wheelchairs: one found that Medicare paid significantly higher rates for power wheelchairs compared with suppliers and consumers; the second found that Medicare is spending an estimated $178 million for wheelchairs that do not meet Medicare's coverage criteria.
  • A study on Medicare payment rates for home oxygen equipment found that the Federal Employees Health Benefits (FEHB) plans' median payment rates were between 10% and 20% lower than median Medicare fee schedule allowances for stationary and portable equipment. Medicare could have saved $499 million if payments had been based on the lowest FEHB rates.

    3. Hospitals

  • It settled an exclusion case against Redding Medical Center (RMC), a 246-bed hospital in Redding, CA, formerly owned by Tenet. From at least May 1999 through May 2002, RMC allegedly performed cardiac services that were not medically necessary. Tenet has since sold RMC to an unrelated party.

    To read the full report, click here.



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