OIG evaluates infusion reimbursements
An Office of Inspector General (OIG) 1999 report unveils the Medicare home infusion industry, including its reimbursement trends, coverage, company characteristics, and physician financial arrangements. The report found that:
• While Medicare patients appear to be only 10% to 15% of the total market, Medicare payments for home infusion therapy are rising rapidly.
• Some carriers cover only the drugs and conditions specified in the Health Care Financing Administration (HCFA) Medicare Carrier’s Manual, while others cover a wide variety of unspecified drugs and conditions.
• Physician ownership or other financial involvement with home infusion therapy companies is common. The report recommends that HCFA monitor spending to better identify trends, provide more specific coverage guidelines, and gather information on physician ownership of or compensation by those companies, and report fraud and abuse to OIG.
Infusion services at SNFs found wasteful
Another OIG final report says that infusion services provided in 22 skilled nursing facilities (SNFs) were often unnecessary, overpriced, and/or misclassified on SNF cost reports. As a result, the 22 SNFs were reimbursed unallowable costs totaling approximately $5.3 million ($4.8 million for services not medically necessary) out of $9 million claimed during 1995-98. The primary problem was the old retrospective reasonable cost-based reimbursement system, which was vulnerable to abusive billing schemes.
Currently, SNFs are paid under a prospective payment system (PPS). OIG recommended that HCFA consider the impact of improper payments for infusion therapy services before making any refinements or updates to the SNF prospective payment rates. OIG also recommended that HCFA identify and recover overpayments which were made to SNFs for unnecessary and overpriced infusion services prior to the adoption of PPS, and direct its contractors to perform medical reviews of selected SNF patients to ensure that patients are receiving appropriate levels of infusion therapy. HCFA generally agreed with OIG recommendations.
Parenteral nutrition benefits
Medicare beneficiaries with severe and permanent disease of the gastrointestinal tract who can receive the nutrients they need via parenteral nutrition are covered under Medicare’s prosthetic device provision. In 1995, Medicare allowed $163 million in 1995 for parenteral nutrition solutions, not including pumps or supplies. Of this total, 89% were accounted for by just four procedure codes, representing pre-mixed parenteral solutions with varying amounts of protein. An OIG report in October 1995 found that Medicare reimbursement for the four parenteral nutrition codes is an average of 45% higher than lower-paying Medicaid agencies, 78% higher than lower-paying Medicare risk-contract HMOs, and 11 times higher than some manufacturers’ contract prices.
The report recommends that HCFA examine other payment methods that could lead to more cost-effective reimbursement for parenteral nutrition solutions. For example, the secretary of Health and Human Services or the Durable Medical Equipment Regional Carriers could use their "inherent reasonableness" authority to reduce reimbursement to more appropriate levels. HCFA could base its reimbursement on suppliers’ acquisition costs or seek legislative authority to use competitive bidding to take advantage of its position of a high-volume purchaser of parenteral nutrition, the study stated.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content