Federal Reports

Dominican Hospital, located in Santa Cruz, California, did not comply with all Medicare requirements for reporting wage data used by CMS to calculate the fiscal year 2014 wage index. We estimated that, as a result, in 2014 Medicare overpaid the hospital $67,000 and overpaid two other hospitals in the same core-based statistical area a total of $87,000.

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This report contains classified information that is exempt from disclosure under the Freedom of Information Act. To obtain further information, please contact the OIG Office of Counsel at OIGCounsel@oig.treas.gov, (202) 927-0650, or by mail at Office of Treasury Inspector General, 1500 Pennsylvania Avenue, Washington DC 20220.

At the request of the Deputy Chief of the Operational Services Bureau (OSB), the Office of Inspector General (OIG) performed limited procedures of the new form process. Our objective was to determine if the controls over the new process were effective and ensured the integrity of the collection, recording, custody, and transfer of collateral funds generated from citations.

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The objective of this evaluation was to determine if the Tennessee Valley Authority's (TVA) delivered costs of fuel included all appropriate costs and were calculated consistently across commodities. We hired a consultant, Synapse Energy Economics, Inc. (Synapse), to (1) review TVA's delivered cost of fuel components and calculations and (2) research industry practices related to calculating fuel costs for dispatch purposes.In summary, in conjunction with Synapse, we determined TVA was making dispatch decisions using inaccurate cost information. The dispatch costs were inaccurate because TVA's delivered costs of fuel, which is the major component of dispatch costs, did not include all appropriate costs, were not calculated consistently across commodities, and were not calculated correctly. The errors we identified skewed coal dispatch costs up to 8.4 percent and gas dispatch costs up to 2.8 percent. In addition, other opportunities for improvement were identified related to inflation and escalation rates used in the delivered cost of coal calculations and the usage percentages assigned to each gas hub used by TVA in calculating the delivered cost of gas.(Summary Only)

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A hotline complaint alleged that the director of an AmeriCorps program in Iowa misappropriated program funds to purchase groceries for her personal use.

Home health has long been recognized as a program area vulnerable to fraud, waste, and abuse. OIG home health investigations have resulted in more than 350 criminal and civil actions and over $975 million in receivables for fiscal years 2011-2015. Additionally, previous reports from OIG and the Government Accountability Office have raised concerns about questionable billing patterns, compliance problems, and improper payments in home health.

International Institute of Sleep, Inc. (the Institute), an Independent Diagnostic Testing Facility based in Deerfield Beach, Florida, billed Medicare for polysomnography services that did not meet Medicare billing requirements for all 100 randomly selected beneficiaries with 130 corresponding lines of service, resulting in overpayments of $78,000. These errors occurred primarily because the Institute did not have adequate controls to ensure that it properly documented polysomnography services billed to Medicare. On the basis of our sample results, we estimated that the Institute received overpayments of at least $1 million for the audit period.

Since the Part D program went into effect in 2006, the Office of Inspector General (OIG) has had ongoing concerns about abuse and diversion of Part D drugs. In June 2015, OIG released a data brief, Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D, which described trends in Part D spending and identified questionable billing by pharmacies. This data brief builds on that body of work. It updates information on spending for commonly abused opioids and provides data on the dramatic growth in spending for compounded drugs.

During a prior review of a Medicaid-funded mental health program in New York State (the State), we observed that some providers were paid more than the Medicaid base rate for certain services. These providers participated in the State's Comprehensive Outpatient Program Services (COPS) and Community Support Program (CSP) programs and, as program participants, received supplemental (add-on) payments subject to annual payment thresholds in exchange for offering "enhanced services" to Medicaid beneficiaries. We decided to review these add-on payments and other aspects of the State's COPS and CSP programs.

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OIG administers the Medicaid Fraud Control Unit (MFCU or Unit) grant awards, annually recertifies the Units, and oversees the Units' performance in accordance with the requirements of the grant. As part of this oversight, OIG conducts periodic reviews of all Units and prepares public reports based on these reviews. These reviews assess the Unit's adherence to the 12 MFCU performance standards and compliance with applicable Federal statutes and regulations.

Attached is our final report on USPTO’s contracts that were awarded using other than full and open competitive (“noncompetitive”) procedures. Our objective was to determine whether these noncompetitive contract awards were properly justified.

Since 2010, the Troubled Asset Relief Program’s (“TARP”) Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (“Hardest Hit Fund” or “HHF”) has provided funds through housing finance agencies in 18 states and the District of Columbia (“HFAs” or the “state HFAs”) to homeowners in states hit hardest by the housing bubble. The Hardest Hit Fund has largely been a program to provide Federal funds to unemployed and underemployed homeowners to help pay their mortgage.Starting in mid-2013, Treasury began allowing seven state HFAs to use existing HHF dollars to demolish vacant and abandoned homes to help neighboring homeowners under a new Blight Elimination Program. At that time, the Department of Housing and Urban Development’s (“HUD”) Neighborhood Stabilization Program (“NSP”) provided $300 million for blight elimination.Treasury’s Blight Elimination Program allocates nearly $622 million among seven state agencies, who work with local partners to use contractors and subcontractors to perform the demolition and other work. These local partners pay the contractors or subcontractors and seek reimbursement from the housing agencies for the work performed. The Office of the Special Inspector General for the Troubled Asset Relief Program performed a review of risks that could impact the effectiveness of this program. This work led to a December 14, 2015 SIGTARP Alert Letter to Treasury Secretary Lew advising him that in Evansville, Indiana, this program was being abused to demolish lived-in (rather than abandoned) homes, resulting in people having to leave their homes, so that a car dealership could be relocated.SIGTARP found that Treasury’s HHF Blight Elimination Program is significantly vulnerable to the substantial risks of unfair competitive practices and overcharging than HUD’s program. These risks could lead to fraud, waste, and abuse.

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We reviewed CMS's oversight of provider-based billing to ensure that only facilities that met provider-based requirements were receiving higher payments allowed by the provider-based designation. Under Medicare, payments for services performed in provider-based facilities are often more than 50 percent higher than payments for the same services performed in a freestanding facility. This increased cost is borne by both Medicare and its beneficiaries. "Provider based" is a Medicare payment designation established by the Social Security Act that allows facilities owned by and integrated with a hospital to bill Medicare as a hospital outpatient department, resulting in these facilities generally receiving higher payments than freestanding facilities. Provider-based facilities, which may be on or off the main hospital campus, must meet certain requirements (e.g., the facility generally must operate under the same license as the hospital). In addition, under current policy, hospitals may, but are not required to, attest to CMS that their provider-based facilities meet requirements to bill as a hospital outpatient department.

The Vanderbilt University Medical Center (the Hospital), located in Nashville, Tennessee, complied with Medicare billing requirements for 172 of the 245 inpatient and outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 73 claims, resulting in net overpayments of $305,000. Specifically, 34 inpatient claims had billing errors resulting in net overpayments of $221,000, and 39 outpatient claims had billing errors resulting in overpayments of $84,000. These errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors. On the basis of our sample results, we estimated that the Hospital received overpayments of at least $1.14 million for the audit period. During the course of our audit, the Hospital reprocessed 30 claims with overpayments of $134,000 that we verified as correctly reprocessed. Accordingly, we have reduced the recommended refund by this amount.

A physical therapist in South Texas claimed Medicare reimbursement for outpatient physical therapy services that did not meet Medicare reimbursement requirements in calendar years 2012 and 2013. Specifically, of the 100 beneficiary claim days in our random sample, the therapist properly claimed Medicare reimbursement on 81 beneficiary claim days, but improperly claimed Medicare reimbursement on the remaining 19 beneficiary claim days.

The West Carroll Care Center (the Nursing Home) (operating in Oak Grove, Louisiana) did not always provide service to its residents in accordance with their care plans, as required by Federal regulations, before the residents were hospitalized with urinary tract infections. Specifically, the Nursing Home did not monitor and document residents' hydration status, monitor and document the residents' conditions, and document residents' urine appearances as their care plans required.

For inpatient claims with certain Medicare Severity Diagnosis-Related Groups (MS-DRGs), Medicare requires that beneficiaries have received 96 or more hours of mechanical ventilation. For 137 of the 200 claims we reviewed, Medicare payments to hospitals complied with Medicare requirements; the beneficiaries had received 96 or more consecutive hours of mechanical ventilation. However, for the 63 remaining claims, Medicare payments to hospitals did not comply with requirements. Consequently, the claims were assigned incorrectly to MS DRGs 207 and 870, resulting in $1.5 million of overpayments. The hospitals confirmed that these claims were improperly billed and generally attributed the errors to incorrectly counting the number of hours that beneficiaries had received mechanical ventilation or to clerical errors in selecting the appropriate procedure code.

The grant provided Tuppers Plains-Chester Water District (TPCWD) with construction funds to install a new above ground booster pump station located on State Route 681 in Reedsville, OHIO

ARC awarded the grant to provide funds for the replacement of the Bashan Booster Station with a new above grade booster station completed with 2,000 linear feet of 10 inch PVC waterline.

These grants were two multi-year series of ARC grants beginning in 2011 to support MSU in deploying the Appalachian Rural Dental Educational Partnership (ARDEP).