t 
Department  of Health and Human Services 
OFFICE  OF 
INSPECTOR  GENERAL 
OPERATION  RESTORE TRUST

ACTIVITIES

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 JUNE  GIBBS  BROWN 
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Inspector  General 
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NOVEMBER  1995 
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oRT-12-%mo  Department of Health and Human Services 
OFFICE  OF 
INSPECTOR  GENERAL 
OPERATION  RESTORE TRUST 
ACTIVITIES  TABLE  OF  CONTENTS

PAGE

Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

Reviews  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3

Nursing  Facilities  Reviews  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Medical  Equipment  and  Supplies  Reviews  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

Investigative  and  Sanction  Activities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

Outreach  Activities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

Voluntary  Disclosure  Pilot....  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
 INTRODUCTION

At the  Department  of Health  and  Human  Services  (HHS),  the  Office  of Inspector 
General  (OIG)  has  undertaken  a number  of initiatives  to ensure  that  its resources  are 
deployed  in the  most  efficient  and  cost-effective  way and  that  its work  products  continue 
to be  of the  highest  quality.  One  of the  OIGS major  thrusts  has been  an intensified 
effort  to combat  fraud,  waste  and  abuse  in the  Medicare  and  Medicaid  programs.  While 
the  health  care  industry  has  always been  vulnerable  to fraud  and  abuse,  recent  years  have 
seen  a surge  in complex  schemes  which  often  span  several  States  and  implicate  millions 
of health  care  dollars.  In an effort  to respond  to this growing  problem  most  effectively, 
the  OIG  has  shifted  its organizational  culture  toward  an  added  emphasis  on 
interdisciplinary  teamwork.  The  OIGS auditors  are  working  even  more  closely with  its 
investigators  when  audit  findings  suggest  criminal  fraud;  and  OIG  evaluators  are  using 
their  analyses  to identify  program  vulnerabilities,  giving auditors  and  investigators  targets 
for further  development  as well as case-specific  data  for existing  investigations  which  may 
result  in civil and  administrative  sanctions. 
The  benefits  of greater  collaboration  and  sharing  of resources  also have  been  realized  in 
the  OIGS relationships  with  other  Federal  and  State  law enforcement  and  regulatory 
agencies.  Using  this expanded  team  concept,  the  OIG  is working  jointly  with  the  Health 
Care  Financing  Administration  (HCFA)  and  the  Administration  on Aging  (AoA)  on a 
project  designed  to prevent  and  detect  fraud  and  abuse  in three  rapidly  growing  sectors 
of the  health  care  industry:  home  health  agencies,  nursing  facilities  and  durable  medical 
equipment  suppliers.  Operation  Restore  Trust  (ORT),  announced  by the  President  on 
May 3, 1995, is a 2-year  partnership  of Federal  and  State  agencies  working  together  to 
protect  the  health  care  trust  funds  more  effectively  through  shared  intelligence  and 
coordinated  enforcement,  and  to enhance  the  quality  of care  for the  programs 
beneficiaries.  The  project  has initially  targeted  five States  which  together  account  for 40 
percent  of the  Nations  Medicare  and  Medicaid  beneficiaries. 
As the  projects  coordinator,  the  OIG  has assembled  teams  that  include  investigators 
from  its Office  of Investigations  and  the  State  Medicaid  Fraud  Control  Units;  auditors 
and  evaluators  from  both  the  OIG  and  HCFA  quality  assurance  specialists  from  the 
State  surveyors  and  durable  medical  equipment  regional  coordinators;  State  long-term 
care  ombudsmen  through  AoA,  and  prosecutors  from  the  Department  of Justice  and  the 
Offices  of the  United  States  Attorneys  General.  These  teams  are  conducting  financial 
audits  of providers,  performing  criminal  investigations  and  making  referrals  to Federal 
and  State  prosecutors.  Civil and  administrative  sanctions  and  recovery  actions  have  been 
enacted,  and  surveys  and  inspections  of nursing  facilities  are  also underway.  The 
collective  experience  of these  teams  also will be  used  to recommend  to HCFA  and  the 
Congress  program  adjustments  to prevent  future  fraud  and  to reduce  waste  and  abuse. 
The  OIG  is also  enlisting  the  support  and  participation  of the  public  and  the  industries 
that  the  initiative  targets.  A hot  line  (1-800-HHS-TIPS)  has been  established  to receive 
allegations  of fraud  and  abuse  on a confidential  basis.  To  further  assist health  care 
1
 providers,  the  OIG  will continue  its practice  of issuing Special  Fraud  Alerts  to identify 
and  describe  fraudulent  and  abusive  health  care  practices.  Moreover,  a voluntary 
disclosure  program  has been  initiated  on a pilot  basis  under  the  auspices  of ORT. 
Through  this pilot  program,  the  OIG  and  the  Department  of Justice  have  established 
procedures  by which  home  health  and  nursing  facility suppliers  and  providers  in the  five 
States  may come  forward  with full disclosure  of potential  fraud  and  abuse.  By doing  so, 
self-disclosing  providers  may minimize  the  cost and  disruption  of an investigation, 
negotiate  a monetary  settlement  in lieu of prosecution,  and  when  appropriate  avoid 
exclusion  from  Medicare  and  Medicaid  program  participation. 
The  ORT  project  will take  2 years  for completion  and  evaluation.  If it proves  to be both 
effective  and  efficient,  other  areas  may be  singled  out  for similar  treatment.  Employing 
these  and  other  initiatives,  the  OIG  is working  to ensure  the  integrity  and  efficiency  of 
the  Medicare  and  Medicaid  programs  and  to protect  the  beneficiaries  of those  programs. 
2
 HOME  HEALTH  REVIEWS

COMPLETED AUDITS AND EVALUATIONS 
Review of Claims by One Home  Health Agency

Review  of Home  Ofice  General and Administrative  Costs Claimed  by One Home

Health Agency

Periodic Interim Payments  (PIP) to Home  Health Agencies

Home  Health Agencies:  Alternative  Coverage and Payment  Policies

The Physicians Role in Home  Health  Care

Results of the Audit  of Medicare Home  Health  Services in Florida

Variation Among  Home  Health Agencies in Medicare Payments for Home  Health  Services

Geographical  Variation in Visits Provided by Home  Health Agencies

Medicare Beneficiary Satkfaction  with and  Understanding of Home  Health  Services

ONGOING  AUIXIX  AND EVALUATIONS 
High Cost Home  Health Agencies

Home  Health  in Health Maintenance  OEanizations

Home  Health Eligibilip  Reviews

H~  Cost Repoti  Reviews

PLANNED AUDiTS AND EVALUATIONS 
l%e Physicians Role in Home  Health  Care: A Follow-Up 
3
 HOME HEALTH REVIEWS:  PROJECTDESCRIPTIONS 
COMPLETED AUDITS AND EVALUATIONS 
Review of Ckzirnsby One Home  Health Agency  (A-04-94-02078) 
This  report  involves  claims  for home  health  agency visits that  did not  meet  Medicare 
guidelines.  These  claims  involved  visits that  were  not  rendered  and  visits that  were  made 
to individuals  that  were  not  eligible  for home  health  benefits.  Of the  $45.4 million 
claimed  by this home  health  agency  during  FY  1993, we estimated  that  $25.9 million  did 
not  meet  reimbursement  guidelines.  We  recommended  that  HCFA  recover  the 
overpayment.  HCFA  initiated  recoveq  action.  The  agency  filed  for bankruptcy  in 
August  1993. 
Final  Report  February  1995 
Review of Home  O@e  General and Administrative Costs Clizirnedby One Home  Health 
a@KY  (A-04-93-02067) 
This  report  involves  unallowable  general  and  administrative  costs  claimed  by this HHA 
on its FY  1992 Medicare  cost report.  This  agency  claimed  $14.6 million  of unallowable 
computer  software,  salaries,  owners  compensation,  entertainment,  marketing  and 
promotional  activities,  lobbying,  and  other  costs.  Subsequent  to issuing the  final  audit 
report,  we initiated  exclusion  proceedings.  The  agency  is currently  appealing  the 
proposed  exclusion  action. 
Final  Report  March  1995 
Peniodic Interiin Paymen#s (PIP) to Home  Health Agencies  (A-14-95-O0396) 
This report  shows that  HHAs  which  receive  hi-weekly  prepayment  of claims  based  on an

estimate  of annual  visits creates  an environment  that  fosters  excessive  overpayments.

Our  review  shows that  HHAs  on PIP  account  for an average  of 41.4 percent  of the  total

HHA  overpayments  to the  Medicare  program.  We  recommended  that  PIP  method  of

reimbursement  to HHAs  should  be  strictly  enforced  or eliminated.  The  HCFA

concurred  with  our  recommendation  and  included  elimination  of PIP  in its 1997  

legislative  package.

Final  Report  March  1995

Home  Health Ag&:  Alternative Cbverage and Payment Policies (OE1-12-94-00180) 
This  inspection  describes  policies  of payers  other  than  Medicare  regarding  coverage, 
limitations,  and  quality  and  utilization  controls.  Surveyed  entities  included  national 
health  maintenance  organizations,  Medicaid  programs,  the  Department  of Veterans 
4  Affairs,  private  insurers,  and  foreign  governments.  We  found  that  while  home  health 
benefits  in other  health  plans  are  structured  similarly,  they  tend  to use  a variety  of 
different  approaches  to control  home  health  expenditures.  Other  payers  may place  limits 
or caps  on the  number  of services,  target  home  health  programs  to special  needs 
populations,  require  copayments,  issue explanations  of benefits,  or more  intensely  use 
case  management  services. 
Final  Report  May  1995 
Zhe P~siiizn%  Role  in Home  Health Care (OEI-02-94-O0170) 
This review  examines  the  current  role  of the  physician  in home  health  care.  We  found 
that  physicians  are  most  involved  in referring  patients,  approving  plans  of care,  and 
monitoring  the  progress  of complex  patients.  They  are  less involved  in coordinating 
services,  visiting  patients  at home,  and  participating  in interdisciplinary  conferences. 
Both  agencies  and  physicians  identify  some  obstacles  related  to the  physician  role 
including:  communications,  paperwork,  physician  awareness  and  education,  and  the 
overall  intensity  of physician  involvement.  We  recommended  that  HCFA  continue  its 
efforts  to change  the  plan  of care  to ensure  it conveys  only critical  information  and 
relieves  unnecessary  burden.  We  also recommended  that  HCFA  strengthen  its efforts  to 
educate  agencies  and  physicians  about  its policies  regarding  the  physicians  role  in home 
health  care. 
Final  Report  June  1995 
Results of the Audit of Wdicare  Home  Health Services in Floridil (A-04-94-02087) 
This involves  a review  of claims  paid  to a sample  of HHAs  in Florida.  We  found  that  26 
percent  of the  claims  approved  for payment  did not  meet  Medicare  reimbursement 
requirements  because:  visits were  made  to beneficiaries  who were  not  homebound, 
unnecessary  services  were  provided,  and  visits were  not  documented  or not  rendered. 
We  estimated  that  during  the  month  of February  1993, the  intermediaries  approved 
unallowable  claims with  charges  totaling  $16.6 million  out  of a universe  of $78 million. 
Final  Report  June  1995 
Varidm  Anwng  Home  Health Agencies  ih Medicare Paymen~ for Home  Health Senkes 
(OEI-04-93-00260) 
This inspection  report  describes  the  variation  in average  reimbursement  per  beneficiary 
for 6,803 HHAs  in 1993 and  possible  reasons  for this variation.  We found  that  the 
variation  was significant  and  seemed  to be  explained  by the  wide variation  in the  average 
number  of visits per  beneficiary.  Proprietary,  for-profit,  non-affiliated  agencies  tended  to 
receive  higher  reimbursement.  These  higher  reimbursed  agencies  provided  seven  times 
more  home  health  aide  visits than  lower  reimbursed  agencies.  Differences  in quality  or 
beneficiary  characteristics  did not  appear  to explain  the  variation.  We  recommended 
5  that  HCFA  explore  ways to address  excessive  utilization  and  inappropriate  variation  in 
reimbursement  among  HHAs.  In addition,  we recommended  that  HCFA  continue  to 
work  on improving  the  home  health  benefit  and  to control  fraud,  waste,  and  abuse. 
Final  Report  July  1995 
Geqgmphical  Variation in Vi  l+wkied  by Home  Health Agencies  (OEI-04-93-O0262) 
This report  analyzes  differences  among  States  in visits by home  health  agencies. 
Nineteen  States  had  a larger  concentration  of home  health  agencies  with  a high  average 
number  of visits per  beneficiary  than  other  States.  Home  health  agencies  in four 
Southeastern  States  averaged  significantly  higher  average  number  of visits than  all other 
States. 
Final  Report  September  1995 
Medicare Benefkiary  Sati@action with and Urukmtanding of Home  Health Services 
(OEI-04-93-O0143) 
As part  of the  OIGS recurring  nationwide  Medicare  beneficiary  satisfaction  survey, we 
included  questions  in the  1994 survey about  satisfaction  and  understanding  of home 
health  services.  We  found  that  a high percentage  of beneficiaries  were  satisfied  with  the 
home  health  services  they  received.  However,  only half of the  beneficiaries  thought  it 
was clear  what  Medicare  paid  for.  We recommended  that  HCFA  pursue  methods  to 
increase  beneficia~  understanding  of what  home  health  services  Medicare  pays for on 
their  behalf.  HCFA  has been  experimenting  with various  methods  to do so. 
Final  Report  November  1995 
ONGOING  AUDITS AND EVALUATIONS 
High Cost Home  Health Agencia  (OEI-04-93-00261) 
This  study will provide  an  analysis  of differences  in quality  assurance,  utilization  controls, 
and  patient  management  between  high cost and  low cost home  health  agencies.  We  have 
defined  as high cost those  agencies  with significantly  higher  average  per  beneficiary  costs, 
and  as low cost  those  with significantly  lower  average  per  beneficiary  costs.  This  study is 
a follow up  to previous  work  in which we found  wide variation  in per  beneficiary  costs 
without  apparent  explanation  for such variation. 
Draft  Target  December  1995 
Home  Health h  Health Maintenance  Oganizatwns  (OEI-04-95-00080) 
This  study will assess  how home  health  services  are  provided  and  managed  in health 
6  maintenance  organizations,  how home  health  is delivered  and  provided  in managed  care 
versus  fee  for service,  and  what  lessons  Medicare  can  draw  from  managed  care 
environments. 
Draft  Target  December  1995 
Home  Healih Eliility  Reviews 
The  objective  of these  reviews  at approximately  10 providers  is to determine  whether 
home  health  visits claimed  by selected  HHAs  meet  Medicare  guidelines.  During  these 
audits,  we will determine  if home  health  visits were  made  to beneficiaries  who were  not 
homebound;  visits provided  services  that  were  considered  unreasonable  and  unnecessary 
and  visits were  billed  but  not  made. 
Draft  Targets  1995 and  1996 
H~  C@  Repoti  Reviews 
We  are  conducting  joint  HHA  cost report  audits  with Medicare  contractors  in New York 
and  Texas.  The  audits  will examine  the  allowability  of HHA  administrative  costs  claimed 
by the  selected  HHAs.  We  also plan  to conduct  HHA  cost report  audits  through  the  use 
of contracting  services. 
Draft  Targets  May  1996 
PLANNED AUDITS AND EVALUATIONS 
l%e Physician  Role in Home  Health Care: A  FoLbw-Up  (OEI-02-95-O0270) 
We will examine  whether  physicians  are  providing  case  management  services  as required 
when  billing  for oversight  of home  health  plans  of care.  Effective  January  1, 1995, 
Medicare  will provide  separate  payment  for physician  care  plan  oversight  of beneficiaries 
who  are  receiving  Medicare  covered  home  health  services. 
Expected  Issue  Date:  FY  1996 
7
 NURSING  FACILITIES  REVIEWS

COMPLETED AUDITS AND EVALUATIONS 
Medicare Payments for Nonprofessional  Services in Skilled Nursing Facilities

Review of Improper Payments Made  to Hospitals  and  Skilled Nursing Facilities for

Beneficiaries Electing Hospice Benefits

Review of Hospice Beneficia~  Eli@bilityat Hospicio Del Oeste, Inc., San German,  Puerto

Rico

Review  of Hospice Beneficiary Eligibility at Hospicio  En El Hogar De iWanah, iWanati,

Puerto Rico

Medicare  Services fiovided  to Residents of Skilled Nursing Facilities

ONGOING  AUDITS AND EVALUATIONS 
Part B Services in Nursing Homes:  An  Overview

Mental Health  Services in Numing Homes

Review  of Hospice Benef7ciaty Eligibility in Puerto Rico

Review  of Hospice  Eligibility

Services Provided  to Medicare  and Medicaid  Beneficiaries in Nuning Homes:  A Joint

Project

PLANNED AUDITS AND EVALUATIONS 
Further Review  of Improper Payments  to Hospitals  and SNFSfor Beneficiaries Electing

Hospice Benefits

Hospital  Use of Subacute Nuzsing Facilip  Care to Maximize Reimbursement

17wee-Day Hospital  Stay

MedicarelMedicaid  Duplicate  Payments  in Nuning Facilities

Imagng in Nursing Homes

Nail Debridement

Medicare Ambulance  Transpotiation for Nursing Home  Residents

Hospice  Services Provided  to Patients in Nursing Homes

Overview of Hospice  Services

8
 NURSING FACILITY REVIEWS:  PROJECIDESCRIPTIONS 
COMPLETED AUDITS AND EVALUATIONS 
M&are  Paymend for Nonhfewional  Servicer in Skilkd N&g  Faditiks 
(OEI-06-92-O0864) 
This report  examines  the  appropriateness  of allowing  Part  B payment  for non-
professional  services  during  SNF  stays.  The  report  focuses  on enteral  nutrients, 
incontinence  items,  and  surgical  dressings  and  finds that  over  $70 million  were  allowed  by 
Part  B for these  services  in 1992.  The  report  recommends  that  HCFA  take  action  to 
require  SNFS to provide  these  services  within  the  Part  A payment  rate. 
Final  Report  June  1995 
Review of Impmper Payments Mad&to  Hospitak  and Skilled Niusing Facilities for 
Ben@cizrks  Eikctihg Hwpice  Ben@s  (A-02-93-01029) 
This report  described  situations  in which both  hospitals  or skilled  nursing  facilities  (SNF) 
and  hospices  submitted  claims  for payment  for services  related  to a beneficiarys  terminal 
illness.  In a nationwide  audit,  we determined  that,  during  the  period  1988 through  1992, 
approximately  $21.6 million  was improperly  paid  to hospitals  and  SNFS for services 
related  to  a beneficiarys  terminal  illness.  Under  the  hospice  program,  if a hospice 
beneficiary  is hospitalized/institutionalized  for a condition  related  to his/her  terminal 
illness, the  hospital/SNF  should  not bill Medicare  for the  admission  or any services 
rendered  but  should  receive  payment  from  the  hospice.  The  hospice  receives  its 
appropriate  per  diem  payment  from  Medicare  for the  period  of time  the  hospice 
beneficiary  is confined.  We  recommended  recovery  of the  improper  payments  and 
HCFA  agreed  with our  recommendation. 
Final  Report  June  1995 
Review of Hospice Benejiimy  Eligibilityat Hospkio  Del  Oeste, Ike.,  San Germq  R.urto 
(A-02-94-01029) 
RiCO 
This  audit  assessed  the  accuracy  of beneficiary  eligibility  determinations  made  by 
Hospicio  Del  Oeste,  Inc., San  German,  Puerto  Rico.  We  found  that  incorrect  eligibility 
determinations  were  made  in approximately  77 percent  of the  cases  reviewed  at this 
hospice.  This  resulted  in improper  Medicare  payments  to Hospicio  Del  Oeste  of $1.1 
million.  Based  on our  findings,  investigations  are  being  conducted  to determine  possible 
criminal  charges  against  the  owners/operators  of the  hospices  reviewed. 
Final  Report  June  1995 
9
 Review of Hmpice  Benejki@  E@ibility  at Harpicw En El Hqar  De Mana~  llana~ 
Ru?rto RkO  (A-O2-94-O1O3O) 
This  audit  assessed  the  accuracy  of beneficiary  eligibility  determinations  made  by 
Hospicio  En  El Hogar  De  Manati.  We  found  that  incorrect  eligibility  determinations 
were  made  in approximately  70 percent  of the  cases  reviewed  at this hospice.  This 
resulted  in improper  Medicare  payments  to Hospicio  En  El Hogar  De  Manati  of $1.6 
million.  Based  on our  findings,  investigations  are  being  conducted  to determine  possible 
criminal  charges  against  the  owners/operators  of the  hospices  reviewed. 
Final  Report  June  1995 
Medicare Services l?ovided  to Residknts of Skilkd Nuning Facilitk  (OEI-06-92-O0863) 
This  report,  released  in conjunction  with our  report  entitled  Payment  for DME  Billed 
During  Skilled  Nursing  Facility  Stays, provides  an overview  of payments  made  under 
Medicare  Part  B for beneficiaries  in a Medicare  covered  SNF  stay, and  identifies  issues 
needing  further  analysis.  We  found  that  there  were  $930 million  in Part  B charges  for 
Medicare  beneficiaries  residing  in SNFS.  Utilization  of Part  B services  varied 
considerably  among  States.  This  report  represents  the  first  of a series  of products 
resulting  from  the  OIGS initiative  to examine  services  and  supplies  provided  to Medicare 
beneficiaries  residing  in nursing  homes. 
Final  Report  October  1994 
ONGOING  AUDITS AND EVALUATIONS 
Part B Sewkes  k  Numing Homes:  An  Overv&w (OEI-06-92-O0865) 
This  report,  released  in conjunction  with  our  reports  entitled  Enteral  Nutrient  Payments 
in Nursing  Homes  and  Durable  Medical  Equipment  Payments  in Nursing  Homes 
provides  information  on the  range  and  nature  of over  $2.7 billion  in Part  B payments 
made  on behalf  of Medicare  beneficiaries  in nursing  homes.  We found  that  most  money 
was spent  on physician  services,  followed  by medical  equipment  and  supplies.  The  Part 
B average  daily charge  varies  significantly  among  States  and  nursing  homes. 
Vulnerabilities  include  cost shifting,  lack of oversight,  and  questionable  physician  and 
supplier  practices. 
Draft  October  1995 Final  Target  November  1995 
Mental Health Services in Numing Homes  (OEI-02-91-00860) 
This  study assesses  the  nature  and  appropriateness  of mental  health  services  delivered  to 
Medicare  beneficiaries  in nursing  homes.  This  study will identify  possible  vulnerabilities 
to the  Medicare  program  resulting  from  the  expanded  provision  of mental  health  services 
10  to nursing  facility residents.  As a result  of this expansion,  Medicare  reimbursement  for 
all outpatient  mental  health  services  increased  57percent  between  1991 and  1993.  By 
comparison,  reimbursement  for mental  health  services  in nursing  homes  has  increased  by 
244 percent  for the  same  time  period. 
Draft  Target  November  1995 
Revikw of Hmpice  Benej%iary Eligibil@ ti  I%ato  Rico  (A-02-94-01035) 
This  audit  expanded  our  review  of eligibility  determinations  to include  all hospices  in 
Puerto  Rico.  Our  original  review  had  been  conducted  at two facilities.  Preliminary 
indications  are  that  during  the  period  1987 through  1994 as much  as $19.7 million  was 
improperly  paid  to hospice  providers  in Puerto  Rico  on behalf  of ineligible  beneficiaries. 
Draft  Target  December  1995 
Revkw  of Hospice  Eligibility 
We  plan  to review  the  eligibility  determinations  at  approximately  13 hospice  providers  to 
assure  that  care  was provided  for in accordance  with  applicable  Medicare  guidelines. 
Draft  Targets  1995 and  1996 
Servkes RovLied  to Medicare and Medicaid Beneficiarhx in Ni.usingHomes:  A Joiht 
l?oject  (OEI-06-95-O0220) 
This inspection,  involving  a joint  OIG-HCFA  team,  will develop  data  on services 
rendered  to and  paid  by Medicare  and  Medicaid  to beneficiaries  in nursing  homes  in 
Texas  and  Louisiana.  We  are  undertaking  work  in Texas  first. 
Draft  Target  (Texas)  April  1996 
PLANNED AUDJTS AND EVALUATIONS 
Fudwr  Review of Impmper Payments to Hospitals and SNFSfor Benefkiarks  Electing 
Hwpice  Benefits 
We  plan  to expand  our  previous  review  of these  duplicate  payments  made  to hospitals 
and  SNFS to include  payments  made  during  the  years  1993 and  1994 and  into  1995, if 
information  is available.  We  are  currently  in the  process  of extracting  data  from 
computer  tapes  of payments  made  to these  providers  and  will extrapolate  the  results  to 
determine  if the  situation  previously  found  continues  to exist.  We will also determine  if 
11
 there  are  providers  that  display  aberrant  patterns  in terms  of duplicate  payment 
situations  and  assess  the  need  for further  review  of these  providers. 
Expected  Issue  Date:  FY  1996 
Hospital Use of Subacute N&g  Facility Care to Maximize Reinabummumt 
(A-09-95-OO089) 
There  is a perception  that  hospitals  are  maximizing  reimbursement  by prematurely 
discharging  some  Medicare  patients  covered  under  the  prospective  payment  system  to 
their  own hospital-based  nursing  facilities  that  are  reimbursed  on a cost basis.  We  intend 
to compare  average  length-of-stays  (ALOS)  for selected  diagnosis  related  groups  (DRGs) 
that  have  subacute  units with  those  hospitals  that  do not  have  such units.  Besides 
reviewing  the  ALOS  for several  different  DRGs,  we will perform  a more  detailed  cost 
analysis  on a statistically  selected  sample  of patient  stays at hospitals  with  hospital-based 
subacute  units  and  at hospitals  without  such units. 
Expected  Issue  Date:  FY  1996 
7hree Day Hospital Stay (A-14-95-O0398) 
This study will determine  if payment  for skilled  nursing  facility stays meet  Medicares 
coverage  conditions.  In order  to be  paid  by Medicare,  a patients  nursing  home  stay 
must  be  preceded  by a 3-day or more  hospital  stay.  We  have  indications  in one  location 
that  some  nursing  home  stays were  not  preceded  by the  required  hospital  stay.  This 
expanded  review  will determine  if this is a national  problem. 
Expected  Issue  Date:  FY  1996 
Medkare/Medicaid Duplkate  P-B  in Ntig  Facililkr  (OEI-02-95-O0230  and 
A-O2-95-O1O12) 
We will assess  the  extent  to which Medicare  and  Medicaid  may be  making  duplicate 
payments  for patients  in nursing  facilities.  There  are  many  nursing  home  residents  whose 
care  is covered  by both  Medicare  and  Medicaid.  For  these  patients,  there  are  numerous 
services  (e.g., durable  medical  equipment)  that  may be  covered  by the  Medicaid  nursing 
facility rate  and  Medicare  Part  B.  The  guiding  principle  for payment  is that  Medicaid  is 
the  payer  of last resort.  We will assess how the  system works  in these  circumstances. 
As a test  case,  we are  performing  a data  match  in the  State  of New York  to identify  and 
target  specific  providers  who  appear  to be improperly  claiming  both  Medicaid  and 
Medicare  reimbursement  for clients  who reside  in nursing  homes.  Survey work  will be 
performed  at  each  of the  targeted  providers.  If our  survey work  discloses  aberrant, 
fraudulent,  or improper  claiming  practices,  then  detailed  provider  reviews  involving 
12
 applicable  Operation  Restore  Trust  participants  will be  conducted. 
Expected  Issue  Date:  FY  1996 
lm@ng  in Ntig  Homes  (0E1-09-95-00090) 
Our  study will determine  whether  inappropriate  payments  are  made  for imaging  services

delivered  to patients  in skilled  nursing  or other  nursing  facilities.  A significant  number  of

diagnostic  x-ray services,  covered  under  Medicare  Part  B, are  delivered  to patients

residing  in these  facilities.  In  1992, Medicare  allowed  approximately  $408 million  for

imaging  services  to nursing  home  residents.  While  high utilization  rates  may be  expected

in this population,  there  are  concerns  about  the  general  lack  of controls  or oversight  of

services  delivered  to nursing  home  residents.

Expected  Issue  Date:  FY  1996

Nail Debridemmt  (OEI-04-94-00440) 
This  study will determine  why significant  variances  exist for nail debridement  claims 
among  carriers,  and  assess how carrier  policies  have  affected  payment  for such  claims. 
Expenditures  for nail  debridement  increased  26 percent  from  1991 to  1992 (1993 data 
not  available),  to reach  $167 million.  Increases  of 370 percent  and  800 percent  occurred 
in two carriers  for one  code,  four  carriers  account  for half the  total  expenditures  for 
another  code;  and  two carriers  account  for half of the  total  for a third  code.  We  believe 
much  of this service  occurs  in nursing  homes. 
Expected  Issue  Date:  FY  1996 
Medicare Ambu.kmce  Thmsportation for N&g  Home  Reisidknts(OEI-O9-95-OO41O) 
We will assess  potential  policy issues and  appropriateness  of payments  for ambulance

services  provided  to Medicare  beneficiaries  residing  in skilled  nursing  and  other  nursing

facilities.  In  1992, Medicare  Part  B paid  an estimated  $238 million  for ambulance

services  to beneficiaries  in these  facilities.  Approximately  18 percent  of all Medicare

beneficiaries  in these  settings  received  ambulance  services.  Substantial  variation  exists in

the  amounts  spent  under  Medicare  Part  B for such services  by State  and  by nursing

home.

Expected  Issue  Date:  FY  1996

Hmpice  Sewices tioviied  to Patients in N&g  Homes  (OEI-05-95-00250) 
We will examine  how payments  are  being  made  for patients  in nursing  facilities  who  are 
13
 also receiving  hospice  benefits.  Our  goal will be  to identi~  systemic  vulnerabilities  that 
might  result  from  overlapping  Medicare  and  Medicaid  payment  policies  and  to  suggest 
possible  solutions.  We will also describe  how nursing  home  patients  are  enrolled  in a 
hospice  and  explore  how responsibilities  between  the  hospice  and  nursing  home  are 
being  delineated  for the  management  and  delivery  of care  to these  terminally  ill patients. 
Expected  Issue  Date:  FY  1996 
(9Vemiew of Hmpice  Sewer  (OEI-04-93-O0270) 
We will examine  the  appropriateness  of services  provided  to hospice  patients,  the 
payments  for those  services,  patient  selection,  and  patient  protection.  Medicare  provides 
for two 90-day periods  of hospice  care,  and  one  30-day period,  with a final  unlimited 
period  for terminally  ill patients  certified  to have  a life expectancy  of 6 months  or less. 
Covered  services  include  nursing  and  physician  services,  counseling,  durable  medical 
equipment,  home  health  aide  services,  and  physical  therapy.  Once  a patient  is certified, 
elects  a hospice,  and  is under  a plan  of care,  the  hospice  is paid  a prospective  per  diem 
rate  for that  patient,  regardless  of whether  any services  are  rendered  on a given  day. 
The  hospices  total  yearly  payments  are  subject  to an aggregate  cap  per  patient.  Patients 
can revoke  their  choice  of hospice  once  per  period.  Evidence  from  OIG  reviews  and 
other  sources  indicate  questionable  payments  being  made  in hospice  services. 
Expected  Issue  Date:  FY  1996 
14
 MEDICAL  EQUIPMENT  AND 
SUPPLIES  REVIEWS 
COMPLETED AUDIISAND EVALUATIONS 
Payment for Durable Medical  Equipment  Billed During Skilled Nuning Facility Stays 
Questionable Medicare Payments for Incontinence  Supplies 
Marketing of Incontinence  Supplies 
Coverage of Enteral Nutrition  l%erapy:  Medicare and Other Payers 
Questionable Medicare Payments for  Wound Care Supplies 
Marketing of Wound Care Supplies 
Wound Care Supplies: Operation Restore  Twt  Data 
Medicaid  Payments for Incontinence  Supplies 
ONGOING  AUDITS AND EVALUATIONS 
Durable Medical  Equipment  Payments  in Nursing Homes

Enteral NutnentPayments  in Numing Homes

Medicare Payments for Enteral Numtion

Medicare Payments for Nebulizer Drugs

Enteral Nutrition  Therapy:  Utilization and Medical  Necessity

PLANNED AUDITS AND EVALUATIONS 
Supporl Su@aces

Orthotic Supplies

Portable  O~gen

Lease  Purchase of O-xygenConcentration

Certificates of Medical  Necessity for Durable Medical  Equipment

DkchaGe  Planning

Physicians Roles in Controlling Non-Physician Services and Supplies

15
 MEDICAL EQUIPMENT AND SUPPLIESREVIEWS:  PROJECTDESCRIIWIONS 
COMPLETED AUDITS AND EVALUATIONS 
Payment for Durable Medical Eqwpment  Billed Dining Skilkd Numing Facility Stays 
(OEI-06-92-O0860) 
This report  found  that  approximately  $8.9 million  in 1991 and  $10.8 million  in 1992 was 
incorrectly  allowed  for DME  billed  during  skilled  stays.  Federal  law states  that  DME 
may only be  billed  to Part  B of the  Medicare  program  if the  equipment  is provided  in 
the  beneficiarys  residence.  The  law specifies  that  a skilled  nursing  facility  cannot  be 
considered  a residence.  For  this reason,  equipment  billed  to Part  B during  a SNF  is 
incorrectly  paid.  We  found  that  the  inability  of the  suppliers  and  carriers  to accurately 
determine  the  beneficiarys  location  during  a skilled  stay leads  to the  incorrect  payment 
of Medicare  funds. 
Final  Report  October  1994 
Quedonable  Medicare Paymenzs for Incontinence  SuppliA (OEI-03-94-O0772) 
This  report  examines  trends  in allowances  and  questionable  billing  practices  for 
incontinence  supplies  under  Medicare  Part  B between  1990 and  1993.  It describes  how 
Medicare  allowances  for incontinence  supplies  more  than  doubled  in 3 years  despite  a 
drop  in the  number  of beneficiaries  using these  supplies.  Four  types  of incontinence 
supplies  account  for  almost  all the  increase  in allowances.  Questionable  billing  practices 
may account  for almost  half  of incontinence  allowances  in  1993.  A policy  change  which 
HCFA  has  proposed  should  address  questionable  billing practices. 
Final  Report  December  1994 
iUarketihg of Incontinence  Suppks  (OEI-03-94-00770) 
This report  describes  supplier  and  nursing  home  practices  that  can lead  to inappropriate 
payments  for incontinence  supplies.  Nursing  homes  we interviewed  indicated  that 
suppliers  engage  in questionable  marketing  practices.  Beneficiaries  we interviewed 
indicated  that  they  may be  receiving  unnecessary  or non-covered  supplies.  Some  nursing 
homes  reported  that  suppliers  present  them  with false  or misleading  information  such as 
Medicare  is introducing  new broader  coverage  for incontinence  supplies.  Finally,  we 
found  that  many  nursing  homes  do not  track  Medicare-reimbursed  supplies  to the 
specific  beneficiary  for which  they were  billed. 
Final  Report  December  1994 
16
 Ciwrage  of Enteral Nutrition 7herapy:  Medicare and Other Payers (OEI-03-94-OO020) 
This  review  found  that  most  payers  surveyed  routinely  cover  enteral  nutrition  therapy. 
Compared  to other  payers,  Medicares  coverage  requirements  are  similar  in some  areas 
and  more  restrictive  than  others.  For  example,  like Medicare,  the  majority  of other 
payers  do not  routinely  cover  cognitive  disorders  such  as Alzheimers  disease.  Other 
payers  will cover  patients  with  a functioning  gastrointestinal  tract  with  special 
nutrient/metabolic  needs;  whereas  Medicare  will not.  Medicare  policy requires  specific 
documentation  for items  such as pumps,  product  category  and  caloric  intake,  whereas 
other  payers  do not. 
Final  Report  May  1995 
Quationable  Medicare Payments for  Wound Care Supplies (OEI-03-94-00790) 
This report  describes  the  questionable  billing  practices  for wound  care  supplies  under 
Medicare  Part  B from  June  1994 through  February  1995.  We  found  that  questionable 
payments  of wound  care  supplies  may account  for as much  as two-thirds  of the  $98 
million  in Medicare  allowances.  Wound  care  activity is concentrated  in States,  suppliers, 
place  of service,  and  one  carrier.  The  HCFA  and  the  four  DME  regional  carriers  have 
taken  corrective  actions  to address  wound  care  abuses  and  continue  to explore  others. 
We  recommend  a partial,  long term  solution  that  would  require  HCFA  to bundle 
services,  such  as wound  care  supplies,  in their  Medicare  or Medicaid  payments  to nursing 
homes.  As an immediate  solution  we recommend  that  HCFA  target  limited  program 
integrity  resources  to those  areas  identified  as most  vulnerable  to abuse  and  continue  to 
monitor  wound  care  activity to determine  if the  level  of questionable  payments  continues. 
If questioned  payments  continue  unabated,  HCFA  may need  to reconsider  the  current 
wound  care  benefit. 
Final  Report  October  1995 
Marketing of Wound Care Supplies (OEI-03-94-O0791) 
This report  describes  supplier  and  nursing  home  practices  which  can  lead  to 
inappropriate  payments  for wound  care  supplies  and  examines  issues  concerning 
beneficiaries  use  of these  supplies.  We  found  that  nursing  homes  and  physicians 
determine  which  patients  need  supplies  but  some  suppliers  determine  the  amount 
provided,  wound  care  supplies  are  frequently  provided  in standard  kit form  to 
beneficiaries,  and  beneficiaries  may not  be  receiving  or using all of the  wound  care 
supplies  reimbursed  by Medicare. 
Final  Report  October  1995 
17
 Wound Care Supplies  Ope.mtion Restore Tkst  Dati  (OEI-03-94-O0792) 
This  report  identifies  questionable  billing practices  and  describes  supplier  and  nursing 
home  practices  that  can lead  to questionable  payments  under  the  Medicare  Part  B 
wound  care  benefit  in the  five States  targeted  by Operation  Restore  Trust.  We  found 
that  over  $22 million  of the  $65 million  in questionable  payments  for wound  care  supplies 
between  June  1994 and  February  1995 was in the  five Operation  Restore  Trust  States. 
Wound  care  activity  in these  five States  is concentrated  by product,  supplier,  and  place  of 
service.  In addition,  nursing  homes  in these  States  report  similar  marketing  practices  by 
wound  care  suppliers;  however,  in some  States  the  practices  are  more  widespread. 
Final  Report  October  1995 
Medicaid Payments for I.ontinence  Supplkr  (OEI-03-94-O0771) 
We  found  that  half  of the  States  in our  sample  had  encountered  improper  billings  for 
incontinence  supplies.  In one  State,  California,  improper  payments  exceeded  $100 
million.  Other  States  experienced  problems,  but  to a lesser  degree.  We  also found  that 
States  do not  generally  review  the  appropriateness  or necessity  of incontinence  services 
paid  by Medicare,  and  that  Medicare  does  not  require  carriers  to noti~  Medicaid  State 
agencies  of improper  crossover  payments  made  on behalf  of Medicaid  beneficiaries. 
Thus,  States  may inadvertently  make  unallowable  payments  for Medicare  copayments. 
We  recommended  that  HCFA  alert  Medicaid  State  agencies  about  this vulnerability  and 
take  appropriate  steps  to ensure  that  States  are  notified  of improper  Medicare  payments 
which  contractors  discover  have  been  made  on behalf  of a Medicaid  beneficiary. 
Final  Report  November  1995 
ONGOING  AUDITS AND EVALUATIONS 
Durabk  Medkal  Equ@nent  Payments in Nuning Homes  (OEI-06-92-O0862) 
This report  discusses  payments  for durable  medical  equipment  in nursing  homes  in  1992, 
and various  options  for establishing  a workable  system  for dealing  with payment  for 
durable  medical  equipment  while  a beneficiary  is in a nursing  home. 
Draft  October  1995 Final  Target  November  1995 
Enteral Nment  Payments t%NumhzgHomes  (OEI-06-92-O0861) 
This  report  discusses  payments  for enteral  nutrients  delivered  to beneficiaries  in nursing 
homes  in 1992, compares  Medicare  payments  to purchase  prices  commonly  available  to 
nursing  homes  through  volume  purchasing  or other  contractual  relationships,  and 
identifies  various  options  for establishing  a workable  system  for dealing  with payment  for 
enteral  nutrients  while  a beneficia~  is in a nursing  home. 
18  Draft  October  1995 Final  Target  November  1995 
Medicare P~  for Enterd  Ntin  (OJ31-03-94-()()  (121) 
This  study will determine  how Medicare  compares  to other  payers  in its pricing,  payment 
mechanisms,  and  supplier  networks. 
Draft  Target  November  1995 Final  Target  December  1995 
M&are  Paymenzs for Nebulizer Drugs (OEI-03-94-O0390) 
This report  examines  the  differences  in the  reimbursement  methodologies  used  by the 
Medicare  and  Medicaid  programs  to pay for nebulizer  drugs. 
It will be  followed  by a separate  report  on retail  pricing  for one  nebulizer  drug  (OEI-03-
94-00391). 
Draft  October  1995 Final  Target  November  1995 
Enteml N~tion  Zherapy:  Uiihkation and Medical Nec~ty  (OEI-03-94-OO022) 
This inspection  will assess  how enteral  nutrition  is being  used  by Medicare  beneficiaries. 
Draft  Target  December  1995 
PLANNED AUDITS AND EVALUATIONS 
Suppwt Su@aces (OEI-02-95-00370) 
This  study will determine  the  extent  of questionable  billing for support  surfaces. 
Expected  Issue  Date:  FY  1996 
Orthotic  &!P@es  (OEI-02-95-00380) 
We will determine  the  extent  of questionable  billing for orthotic  supplies.  The  Medicare 
program  reimburses  the  costs associated  with braces,  trusses,  splints,  and  related  items 
that  immobilize  and  shore  up  diseased,  injured,  or weakened  body  parts.  These  devices 
must  be  rigid or semi-rigid  and  must  support  part  of the  body  and/or  restrict  or 
eliminate  motion.  Medicare  allowed  more  than  $63 million  in 1994 for these  supplies. 
Previous  work  by the  OIG  in the  area  of orthotic  body jackets  indicated  that  a substantial 
percentage  of inappropriate  payments  were  made. 
Expected  Issue  Date:  FY  1996 
19
 Ponazbk @en  (OEI-O7-95-OO21O) 
This  study will examine  medical  necessity  issues associated  with Medicare  coverage  of 
portable  oxygen.  Medicare  beneficiaries  meeting  the  requirements  for  oxygen therapy 
may also qualify  for coverage  of a portable  oxygen system,  either  by itself  or to 
complement  a stationary  system,  such as an  oxygen concentrator.  We will also  assess  the 
prescribing  practices  of physicians  who order  the  systems  and  how Medicare  monitors 
utilization  and  medical  necessity  for the  systems.  Medicare  allowed  about  $83 million  for 
portable  oxygen systems  in 1992. 
Expected  Issue  Date:  FY  1996 
Lease  l%mhase  of Oxygen Concentrator  (OEI-07-95-00330) 
This  study will determine  if Medicare  should  encourage  lease-purchase  arrangements  for 
oxygen concentrators.  Medicare  pays rent  for durable  medical  equipment  until  total 
reimbursement  reaches  150 percent  of the  purchase  price;  from  that  point  on, only 
maintenance  charges  are  covered.  In contrast,  Medicare  pays for  oxygen concentrators 
(about  $320 per  month)  for as long as the  beneficiary  needs  it.  If the  same  rules  that 
apply  to durable  medical  equipment  were  applied  to oxygen concentrators,  Medicare 
would  cease  making  payments  for rent  after  a period  of time. 
Expected  Issue  Date:  FY  1996 
Certifkater  of Medical Necaty  for Durable Medical E@prnent  (OEI-03-94-00420) 
Our  study will determine  if the  certificate  of medical  necessity  forms  are  providing  the 
durable  medical  equipment  regional  carriers  with the  information  and  controls  that  they 
need  to assure  that  the  equipment  being  provided  to Medicare  beneficiaries  is medically 
necessary  and  appropriate.  The  HCFA  requires  that  these  forms  be  completed  by 
physicians  who authorize  durable  medical  equipment  for Medicare  beneficiaries. 
Expected  Issue  Date:  FY  1996 
Dircharge  PZunning(OEI-02-94-00320) 
This  study will determine  the  extent  to which  financial  conflicts  of interest  (such  as 
hospital  ownership  of other  providers  or suppliers  businesses)  or inadequate  information 
or training  may hinder  effective  hospital  discharge  planning  for Medicare  and  Medicaid 
beneficiaries.  Medicare  requires  that  hospitals  employ  discharge  planners  to provide 
referrals  to such  continuing  care  as patients  may need  and  to facilitate  early  discharge. 
The  responsibilities  range  from  searching  for a nursing  home  bed  to referring  patients  to 
infusion  companies,  medical  equipment  suppliers,  or home  health  agencies. 
20
 Expected  Issue  Date:  FY  1996 
P~siciizns  Roles in Contrdlng  Non-Physician Senkes  and Supplk  (OEI-03-94-O0400) 
This study will assess  how effectively  physicians  are  meeting  Medicares  expectations  that 
they  act  as controls  against  unnecessary  use  of non-physician  services  and  supplies.  This 
study will build  on our work  assessing  the  physicians  role  in home  health  (02-94-00170) 
and  in completing  certificates  of medical  necessity  (03-96-00010)  and  identify  common 
obstacles  and  successes  in ensuring  that  physicians  perform  this important  service. 
Expected  Issue  Date:  FY  1996 
21
 INVESTIGATIVE  AND  SANCTION

ACTIVITIES

The  OIG  currently  has  211 investigations  underway  that  are  related  to Operation  Restore

Trust,  including  59 joint  ventures  with the  Department  of Justice,  the  Federal  Bureau  of

Investigation  (FBI),  the  United  States  Postal  Inspection  Service,  the  Defense  Criminal

Investigative  Selvice,  the  Railroad  Retirement  Board,  and  other  law enforcement

agencies.

The  distribution  of cases  among  the  target  States  mirror  the  beneficiary  population  of

each  State.  New York,  California,  and  Florida  have  75 percent  of the  investigations.

The  remaining  25 percent  are  equally  divided  between  Illinois  and  Texas.  Nursing  home

facilities  and  related  medical  services  comprise  approximately  80 percent  of the  cases;

home  health  agencies  the  remaining  20 percent.

To date,  OIG  has  achieved  21 criminal  convictions,  9 civil judgments,  9 indictments  and

33 exclusions  in cases  that  are  a direct  result  of the  ORT  initiative.  Nineteen  criminal

convictions,  7 civil settlements  and  7 indictments  involved  nursing  facilities  and  related

medical  services  cases  and  2 conviction  and  2 settlement  concerned  home  health

agencies.  In addition,  OIG  has collected  a total  of $34,935,422  in fines,  recoveries,

settlements,  and  civil monetary  penalties  during  this same  period.  Also,  a savings to the

programs  of $2,176,979  has been  claimed.  The  following  is a brief  summary  of some  of

these  investigations:

Home  Health Agencks 
- Leon  McNinch,  CPA  for a Texas  H~  has  agreed  to a guilty plea  in connection  the 
HHAs  1992 and  1993 Medicare  cost reports.  McNinch  will cooperate  in identifying 
the  fraudulent  entries,  and  make  restitution  of $200,000.  The  owners  of the  HHA  are 
alleged  to have  charged  false  pension  plan  contributions  and  personal  expenses  to the 
Medicare  program. 
- With  the  help  of HCF~  Region  IX, Health  Standards  and  Quality  Division,  the 
provider  agreement  for Austin  Home  Health  was terminated.  Complainants  charged 
that  the  HHA  was having  charting  parties  to document  services.  There  was 
insufficient  evidence  to pursue  criminal  charges;  however,  there  were  enough  issues 
regarding  the  quality  of care  to terminate  the  provider  agreement.  The  termination 
will result  in savings of $1,282,428.92. 
- John  Watts,  President  of United  Care  Home  Health,  and  Gene  Woods,  the 
Administrator,  pled  guilty in central  California  for submitting  false  claims  to Medicare 
totalling  up to $2,5 million  during  a 17-month  period.  These  individuals  billed 
Medicare  over  $9.9 million  for 88,907 home  health  visits to 680 Medicare  beneficiaries 
22
 (some  were  deceased)  and  collected  $5.6 million.  They  aided  kickbacks  for referral 
Medicare  beneficiaries;  created  false  medical  records  to document  home  visits not 
made;  and  submitted  false Medicare  cost reports. 
N&g  Facilitia 
Fort  Tryon  Nursing  Home,  a 240-bed  facility in New York  City, agreed  to pay a civil

monetary  penalty  of $24,000 for filing inaccurate  Medicare  cost reports.  Cost  reports

for  3 consecutive  years  failed  to disclose  that  rent  payments  were  made  to a related

party.

Florida  Club  Care  Center,  a Miami  nursing  home,  paid  $245,488  to settle  its civil

liability  in a billing  scheme.  The  nursing  home  contracted  with  a billing  agency  which

billed  Medicare  for lost charges,  allegedly  billable  services  that  the  nursing  home  had

overlooked.  The  scheme  resulted  in a Medicare  overpayment  of $62,814.  As part  of

the  settlement,  the  nursing  home  adopted  a compliance  plan  designed  to prevent

future  improper  billing  to the  Medicare.  A second  Miami  nursing  home,  Claridge

House,  contracted  with the  same  billing agency  resulting  in a loss to the  Medicare

program  of $262,000.  Claridge  House  paid  $414,911  to resolve  its civil liability.

Donald  Reville,  a Geriatric  Specialist  in Sacramento,  California,  pled  guilty to all

charges  of a 38-count  indictment,  including  mail fraud  and  false  claims  to Medicare

totaling  more  than  $350,000 for a 2-year  period.  Reville  admitted  that  he routinely

billed  Medicare  for  comprehensive  examinations  and  histories  of nursing  home  patients

without  ever  seeing  the  patients.  He  also admitted  to billing Medicare  for follow-up

examinations  that  were  not  performed  on patients.  He  merely  made  entries  in the

patients  charts.  This  investigation  was conducted  jointly  with the  FBI.

Donna  Shelgren,  former  bookkeeper  for SNF manager  Frank  Aiello,  was sentenced  in

California  for creating  false  documents  to deceive  auditors  about  the  amount  of

supplies  ordered  by Aiello.  The  sentence  was for 5 months  in jail,  a $10,000 fine,  and

200 hours  of community  service.

Earlier,  Mildrene  Westbrook,  a former  claims  analyst  for the  Medicare  claims  carrier,

was sentenced  for accepting  payments  from  Aiello  for tampering  with  his claims.  The

sentence  included  5 years  probation  and  100 hours  of community  services.

William  Harrison,  another  former  carrier  employee,  entered  into  a deferred

prosecution  program  in return  for cooperation  and  testimony  at Aiellos  trial.  Harrison

accepted  gratuities  for preferential  handling  of Aiellos  claims  and  cost reports.

Mdical  Services 
- J. Michael  Pruitt,  DBA  Support  Products,  Inc., pled  guilty to one  felony  count  involving 
the  filing of fraudulent  Medicare  claims  for orthotic  body jackets.  Support  Products 
Inc., will pay restitution  of $450,000 at sentencing  September  8 in Houston,  TX. 
23
 - Jose  M. Ferrer,  the  22 year-old  owner  and  sole employee  of Express  Medical  D.M.E., 
Inc., received  approximately  $2.3 million  from  Medicare  by submitting  false  claims. 
Ferrer  obtained  lists of Medicare  beneficiaries  by paying  kickbacks  to management 
personnel  in adult  living facilities,  and  paid  a physician  to sign prescriptions  for DME, 
orthotics  and  medication  without  examining  the  patients.  The  DOJ  Civil Division  froze 
assets  of approximately  $2 million. 
- Chely  Fernandez,  Feliz  A. Garcia-Loredo  and  Ignacio  Elso  through  Get  Well  Medical 
Care,  and  C. F. Medical,  purchased  doctors  signatures  for Medicare  prescriptions  and 
submitted  bogus  claims  for the  rental  of oxygen concentrators  and  medications.  Elso 
and  Fernandez  purchased  copies  of Medicare  cards  and  received  commissions  for 
obtaining  the  signatures  of doctors.  Billings for their  schemes  to Medicare  totaled 
approximately  $370,000,  of which  approximately  $100,000 was paid. 
- Robert  Allen  Lopez  created  11 companies  for the  purpose  of billing  Medicare  for 
parenteral  nutrition  therapy.  Lopez  utilized  his wife and  nominee  owners  to set up 
fictitious  companies  and  submitted  $4.2 million  in false  claims  to Medicare.  The  OIG 
recovered  half  of the  funds  paid  to Lopez. 
- A physician  formerly  licensed  in Florida  was sentenced  to 26 months  in jail  and 
ordered  to make  restitution  of $441,000 for submitting  false  Medicare  claims  for DME 
and vascular  testing  at nursing  homes.  He  was forbidden  to have  anything  to  do with  a 
medically  related  concern  during  3 years  of supervised  release  following  his jail 
sentence. 
- The  owner  of an Illinois  DME  company  was sentenced  for billing  Medicare  for beds 
and  wheelchairs  that  were  not  provided  to nursing  home  residents.  This  case will be 
referred  for civil monetary  action. 
- A DME  company  operator  pled  guilty in Texas  to a charge  related  to Medicare  fraud 
in which  DME  companies  collected  more  than  $1.47 million  for wheelchair  cushions 
billed  to Medicare  as body jackets.  As part  of the  plea  agreement,  he will provide 
information  regarding  similar  Texas  operations.  In an unrelated  case,  a Dallas  dentist 
was indicted  on five mail  fraud  counts.  He  operated  a DME  company  in Texas,  and 
was instrumental  in forming  four  others.  Each  company  sold wheelchair  cushions  to 
nursing  home  residents  in five States.  They  were  reimbursed  $1.2 million  for orthotic 
body jackets  never  provided.  Medicaid  and  private  insurance  carriers  also paid  a 
substantial  amount. 
- Universal  Medical  Supplies  participated  in a fraud  scheme  in which  Medicare  overpaid 
more  than  $13.7 million.  Seventeen  persons,  including  doctors,  salespersons,  and 
managers,  were  indicted  for billing Medicare  for equipment  never  delivered,  and  for 
paying  and  accepting  kickbacks  for signing Certificates  of Medical  Necessity  (CMNS). 
Harry  Ulh-ich was convicted  and  sentenced  earlier,  and  agreed  to pay the  Government 
more  than  $985,700  in a civil suit settlement.  Dr. Angelo  Volpe  pled  guilty to 
accepting  kickbacks  from  Universal.  He  also submitted  bills to Medicare  for  office 
24  visits never  made.  Two Universal  salespersons  are  expected  to plead  guilty within  the 
next  few weeks.  Three  more  physicians  are  scheduled  for trial  in January  1996, and 
two other  civil agreements  are  being  negotiated. 
- Joseph  Broccolo,  a podiatrist,  was sentenced  in New York  to 3 years  probation  and  4 
months  home  confinement  for providing  services  in patients  homes,  then  inflating  the 
number  of visits he billed  to Medicare.  Broccolos  son, Dennis  Broccolo,  worked  for a 
Durable  Medical  Equipment  company.  The  son recruited  patients  for the  father.  In 
return  the  father  gave  his son the  Medicare  number  of his patients  and  signed  CMNS 
which  the  son sold to his employer.  Joseph  Broccolo  must  pay more  than  $13,500 in 
restitution.  Plea  negotiations  are  underway  with the  younger  Broccolo  who  pled  guilty 
earlier  this year. 
- Barry  Feldman,  a podiatrist  and  middleman  for a DME  company  in New York,  was 
arrested  for Medicare  fraud.  Feldman  provided  kickbacks  for referral  of Medicare 
beneficiaries  and  physicians  UPINs  and  sold information  to DME  company.  The 
DME  company  gave  each  beneficiary  a lymphedema  pump,  regardless  of necessity, 
and  billed  Medicare  $4,800 for each  pump. 
- Bernice  Tambascia,  owner  of MedFasat,  Inc., largest  Medicare  supplier  of 
Lymphedema  pumps  in New Jersey,  was convicted  of Medicare  fraud  and  obstruction 
of justice  related  to a false billing  scheme  involving Medicare  beneficiaries  in Florida 
and  New Jersey.  She billed  Medicare  for pumps  not  necessary  and  falsely indicated 
that  lymphedema  pumps,  cheaper  than  the  $4,000 pumps  billed,  had  been  rented  prior 
to prescribing  the  more  expensive  piece  of equipment.  Medicare  overpaid  Tambascia 
in excess of $200,000. 
- Kevin  Dyevich,  President,  Global,  second  largest  DME  supplier  in New Jersey,  pled 
guilty for misrepresenting  lymphedema  pumps  billed  to Medicare  and/or  double  billing 
Medicare.  Dyevich  billed  beneficiaries  in ORT  States.  Global  will enter  into  a civil 
settlement  covering  the  $270,000 improperly  billed,  including  penalties  and  cost  of 
investigation. 
- The  owner  of Absolut  Medical  Services,  a Miami  DME  supplier,  agreed  to pay $65,000 
and  accepted  a 5 year  exclusion  from  the  Medicare  and  Medicaid  programs  to resolve 
his civil liability  under  the  False  Claims  Act  and  the  Civil Monetary  Penalty  Law.  The 
company  paid  recruiters  a $25 kickback  for each  Medicare  beneficiary  they  supplied. 
The  scheme  resulted  in $58,212 in Medicare  payments  for unnecessary  DME. 
25
 OUTREACH  ACTIVITIES 
COMPLETED  OUTREACH  ACXMTIES 
Initial Announcement

I?ressReleases/Fact  Sheets

Fraud Alerts

Interviews:  Print, Radio  and  On-Camera

Amcles

Speeches/Meetings

Hot line

Congressional Activities

ONGOING  OUTREACH  ACrMTIES 
Interviews:  Print, Radio  and On-Camera

Fraud Alerts

Hot  line

PLANNED OUTREACH  ACTMTIES 
Press Releases/Fact  Sheets

Interviews:  Print, Radio  and On-Camera

Articles

Speeches/Meetings

Hot line

Congressional Activities

26
 OUTREACH  ACTMTIES  DESCRIPTIONS 
COMPLETED OUTREACH ACITWHES 
IhitialAnnouncement 
	 On May 3, President  Clinton  announced  the  Operation  Restore  Trust  initiative  to 
delegates  at the  White  House  Conference  on Aging. 
Additionally,  the  Secretary,  the  HCFA  Administrator  and  the  Inspector  General 
 
briefed  White  House  reporters  on Operation  Restore  Trust  as part  of overall 
briefing  on White  House  Conference  on Aging. 
0nMay3,  the  Inspector  General  held  apress  conference  to announce  and  answer 
9	
questions  about  Operation  Restore  Trust. 
0nMay4,  the  Vice  Presidents  speech  before  the  White  House  Conference  on 
	
Aging  addressed  the  Operation  Restore  Trust  initiative. 
On May  4, a message  announcing  this new initiative  was sent  to all HHS 
9	
employees  was sent  out via the  e-mail  and  followed  up with  desk-to-desk  delivery. 
On  May  11, Vice  President  Gore  visited  HHS  to announce  REGO  II with 
9	
Secretary  Shalala  and  Deputy  Secretary  Broadnax.  Operation  Restore  Trust  was 
highlighted  in the  Vice  Presidents  remarks.  Press  attended. 
Bess  Reikases/Fact Sheets 
  On May  3, 1995, a press  release,  with  three  fact  sheets,  were  issued  simultaneously 
with  the  Presidents  announcement. 
-- Fact  sheet  describing  the  initiative. 
..  Fact  sheet  detailing  information  on each  of the  five targeted  States. 
-.  Fact  sheet  on the  voluntary  disclosure  program. 
Press  release  issued  bythe  Inspector  General  on June  12, 1995, announcing 
 
procedures  for the  Voluntary  Disclosure  Pilot  program. 
On June  14, 1995, afactsheet  wasreleased  totrade  publications  announcing  the 
 
Inspector  General  will undertake  reviews  of hospice  facilities  in the  five Operation 
Restore  Trust  States. 
*	 Press  release  issued  June  27, 1995, announcing  a toll-free  hot  line  (1-800 HHS
TIPS). 
27
 Press  release  issued  June  29, 1995, by Secretary  Shalala  releasing  a Special  Fraud 
	
Alert  on Home  Health  Fraud. 
Press  release  issued  August  4, 1995, by Secretary  Shalala  on Medical  Supplies  to 
	
Nursing  Facilities.  Simultaneously,  Secretary  Shalala  held  a press  conference  in 
Austin,  Texas  and  released  the  Special  Fraud  Alert  and  discussed  this new fraud 
initiative.  Texas  Attorney  General  Dan  Morales  participated  with Secretary 
Shalala. 
Press  release  issued  October  10, 1995, by Secretary  Shalala  warning  consumers 
	
and  health  care  professionals  about  questionable  practices  affecting  Medicares 
hospice  program. 
FhzudAh 
On June  29, 1995, the  Special  Fraud  Alert  on Home  Health  Fraud  was issued. 
	
Fifteen  thousand  copies  were  printed  and  distributed. 
On August  4, 1995, another  15,000 copies  of a Special  Fraud  Alert  on Fraud  and 
	
Abuse  in the  Provision  of Medical  Supplies  to Nursing  Facilities  was issued.  This 
alert  was released  by the  Secretary  at a press  conference  in Austin,  Texas. 
Adviwy  Bulkth 
On  October  10, 1995, a Medicare  Advisory  Bulletin  was issued  and  copies 
	
distributed  to the  media.  Copies  are  being  printed  and  will be  distributed  to the 
HCF~  AoA  and  Medicare  carriers  and  contractors. 
On  May  16, 1995, at the  first targeted  State  meeting  in Dallas,  Texas,  the 
	
Inspector  General  and  the  HCFA  Administrator  held  a joint  press  briefing  and 
fielded  questions  related  to this initiative. 
The  Inspector  General  did an interview  with Lynn Filusch  for HHS  Radio  on the 
 
HHS-TIPS  hot  line  on June  27, 1995. 
Lewis Morris,  Office  of General  Counsel,  did an interview  with Lynn  Filusch  for 
	
HHS  Radio  on the  release  of the  Special  Fraud  Alert  on Home  Health  Fraud  on 
June  29, 1995. 
On June  30, 1995, the  Inspector  General  was interviewed  on-camera  by Medill 
	
News Service  for airing  on WIFR-TV  in Rockport,  Illinois.  The  interview  focused 
on Operation  Restore  Trust.  The  hot  line poster  was on display  and  they  filmed 
the  poster  for  airing. 
28

   The  Chicago  01  Regional  Office,  Robert  Noble,  granted  an interview  to Illinois 
 
Medicine.  Since  Illinois isoneof  the  Restore  Trust  States,  theintetiew  focused 
on the  project. 
On  July  17, CNNvisited  the  HHS-TIPS  hotline  and  filmed  theoperation  fora 
 
segment  CNN was producing  on Medicare  fraud. 
On  July 20, 1995, the  Inspector  General  was interviewed  on-camera  for the 
 
MacNeil  Lehrer  NewsHour  concerning  health  care  fraud  and  Operation  Restore 
Trust.  The  producers  plan  to focus  attention  on health  care  fraud  in the  State  of 
Florida.  They  planned  to intemiew  Senator  Graham  and  Kendall  Coffee,  U.S. 
Attorney.  The  segment  is expected  to air before  the  end  of the  year. 
On  August  17, 1995, the  MacNeil  Lehrer  NewsHour  filmed  the  HHS-TIPS  hot 
 
line  operation  for the  segment  they  are  producing  on health  care  fraud. 
On  October  6, 1995, the  Inspector  General  granted  an interview  to NurseWeek 
 
Magazine  on Operation  Restore  Trust.  Theinterview  should  appear  in the 
December  issue. 
On  October  8, the  Inspector  General  gave  the  keynote  address  before  the  national 
 
meeting  of the  Nation~l  Association  f&  Home  C&e  and  the  Hospice  Association 
of America  in San Francisco,  California.  A portion  of the  Inspector  Generals 
remarks  focused  on Operation  Restore  Trust. 
Anici% 
9  The  Journal  of Public  Inquiry,  a publication  of the  Inspectors  General  of the 
United  States,  Summer  1995, printed  an article  written  by the  Inspector  General 
on Operation  Restore  Trust.  The  article  is titled,  Partners  Against  Crime:  Using 
a Culture  of Collaboration  to Win in the  Fight  Against  Health  Care  Fraud. 
The  Inspector  General  has  submitted  a guest  editorial  on Operation  Restore  Trust 
	
for Home  Health  Care  Dealer  magazine.  This  magazine  reaches  12,000 suppliers 
of home  medical  equipment  and  services.  The  article  is scheduled  to appear  in 
the  September/October  1995 issue. 
Speeches/Meetings 
The  Operation  Restore  Trust  team  members  have  given presentations  and 
	
speeches  to the  following: 
-- Managed  Home  Care  Congress 
-.  National  Health  Lawyers  Association 
..  Physicians  Advisory  Committee 
-.  Several  Home  Health  Agencies 
29
 ..  Several  Nursing  Home  Associations 
.- Healthcare  Educational  Research  Fund  (Part  of the  Health  Care 
Association  of New York  State) 
..  Healthcare  Financial  Management  Association 
OnOctober  8,1995,  the  Inspector  General  gave  the  keynote  address  before  the 
	
national  meeting  of the  National  Association  for Home  Care  and  the  Hospice 
Association  of America.  A portion  of the  Inspector  Generals  remarks  focused  on 
Operation  Restore  Trust. 
Hot  &e 
The  hot  line number  was released  to the  public  on June  27, 1995.  The  hot  line 
	
received  1,990 calls, letters,  and  other  complaints  during  the  month  of June.  Of 
the  1,990 complaints,  719 were  entered  into  the  system  for further  case 
development  or referral.  Of these,  624 involved  Medicare  Part  A and  B or 
Medicaid,  and  48 percent  of them  originated  from  target  States. 
For  September,  the  hot  line  received  3,023 complaints,  the  highest  total  since 
	
being  announced--l2l  calls were  ORT  related. 
A hot  line poster  has been  developed. 
 
Clmgr&nal  Activdies 
The  OIG  Congressional  staff  developed  an Operation  Restore  Trust  logo. 
 
The  OIG  and  HCFA  Congressional  Relations  teams  have  developed  a 
	
comprehensive  packet  of information  for distribution  to Congressional  leaders  and 
their  staffs.  All five targeted  State  delegations  received  information  as it was 
released  to the  media  on this initiative. 
	 On May  30, 1995, Restore  Trust  team  members  briefed  Congressman  John 
Dingells  staffers  on the  new fraud  initiative.  The  briefing  was requested  by 
Dingells  staff. 
During  the  month  of June,  HCFA  and  OIG  briefed  the  Congressional  delegations 
	
of the  five targeted  States. 
ONGOING  OUTREACH  ACrMTIES 
Interviews:  ~  Radw  and On-Carn.era 
The  Inspector  General  will be  interviewed  on November  2 by Don  McLeod, 
	
AARP,  for the  December  issue.  Part  of the  intemiew  will focus  on ORT. 
30  The  OIG  press  office  strives  on a daily basis to be  proactive  concerning  the 
	
Operation  Restore  Trust  initiative.  As inquiries  come  in from  the  media,  a 
concerted  effort  is made  to discuss the  Restore  Trust  initiative  in addition  to what 
the  call is in reference  to.  Further,  calls have  been  and  are  being  made  to various 
media--broadcast  and  print--to  discuss the  initiative  and  hopefully  generate 
coverage. 
The  Administration  on Aging has developed  a media  listing for editors  of senior 
	
citizen  publications. 
Initial  contacts  have  been  made  with  48 Hours,  20/20, AARP  and  U.S. News and 
	
World  Report  concerning  possible  stories.  Each  has  indicated  interest. 
In early  November,  Dateline  will air a segment  on health  care  fraud.  Linda  Little, 
	
Regional  IG for  Investigations  was interviewed  on camera  and  she  discussed  the 
ORT  project  and  provided  the  hot  line  number. 
FkaudAlas 
Two Special  Fraud  Alerts  are  under  development  and  will be  issued  over  the  next 
	
6 months.  The  Special  Fraud  Alerts  will focus on the  following  areas  with  a 
tentative  target  date  of issuance:  (1) nursing  home  services  by the  end  of 
December,  and  (2) ambulance  transportation  by the  end  of March  1996. 
H&  like 
Three  letters  have  been  developed  and  all are  in the  clearance  process.  It is hope 
	
the  letters  will be  out  by the  end  of October  and  no later  than  mid November. 
.- The  first letter  has been  prepared  to editors  of senior  citizen  publications 
seeking  their  assistance  in publicizing  the  800 HHS-TIPS  hot  line.  The 
letter  has been  prepared  for signature  of the  Inspector  General,  the  HCFA 
Administrator,  and  the  Assistant  Secretaxy  for Aging.  Clearance  has been 
obtained  from  HCFA  and  is awaiting  clearance  from  Aging  and  the 
Inspector  General. 
.- The  second  letter  is to the  congressional  delegations  in the  five target 
States  seeking  their  assistance  in publicizing  the  800 HHS-TIPS  hot  line  in 
their  newsletter  to constituents  or other  informational  materials  they 
produce. 
-- The  third  letter  is to congressional  delegations  outside  the  Restore  Trust 
States  also  seeking  their  assistance  in publicizing  the  hot  line  in their 
newsletter  to  constituents  or other  informational  materials  they  produce. 
The  hot  line poster  (large  version)  will be  disseminated  to all target  States. 
  PLANNED OUTREACH ACTMTIES 
ties  Rekses/Fact  Sheets 
The  Inspector  General  has initiated  a number  of investigations  in the  target  States 
	
and  target  areas.  We  expect  to have  early  results  in some  of these  cases  in the 
months  ahead.  Many  cases will come  to fruition  through  the  fall and  into  next 
year.  As these  cases  come  to completion,  we will prepare  fact  sheets,  press 
releases,  or press  events. 
A number  of audit  and  inspections  are  also underway  and  as reports  are 
	
completed  and  ready  for issuance,  we will consider  preparing  fact  sheets,  press 
releases,  or press  events  based  on the  findings.  The  OIG  will provide  the 
Secretary  and  other  Department  officials  advanced  warning  so a decision  can be 
made  about  high level involvement  in these  areas  of interest. 
Press  releases  will be  prepared  and  submitted  for issuance  on Special  Fraud  Alerts 
	
as they  are  ready  for issuance.  The  OIG  will determine  if there  are  targets  of 
opportunity  for media  events  with the  Secretary  or others  as these  alerts  are 
nearing  completion. 
We will be  developing  a listing of reporters  in the  five Restore  Trust  States  and 
	
begin  to cultivate  relationship  and  interest  in the  Restore  Trust  initiative. 
We will be  seeking  interviews  with trade  press,  such as Medical  Economics  and 
	
Modem  Healthcare  magazines. 
As Department  officials  (The  Secretary,  HCFA  Administrator,  Assistant  Secretary 
 
for Aging,  Inspector  General)  travel  in the  5 target  States,  staff  should  recommend 
or seek  additional  targets  of opportunity  for doing  interviews,  media  events, 
editorial  boards. 
Artia3 
The  OIG  will be  developing  a list of topics/issues  for articles  that  can  then  be 
	
written  for the  Inspector  Generals  or other  Department  officials by-line. 
In November  1995, the  OIG  will speak  on our  ongoing  work  at a conference 
	
sponsored  by the  National  Hospice  Organization. 
32(cid:1)
  .  Hot  ilhe 
We will be  scheduling  meetings  to discuss publicizing  the  number  in Spanish  since 
	
many  of the  Restore  Trust  States  have  Hispanic  populations. 
We  will discuss a possible  public  service  announcement, 
 
Cbngressibnal Activiiks 
The  Congressional  staffs  (HCFA  and  OIG)  will continue  on a daily basis  to be 
	
proactive  concerning  the  Operation  Restore  Trust  initiative. 
33(cid:1) VOLUNTARY  DISCLOSURE  PILOT

The  OIGS previously-announced  voluntary  disclosure  program  was officially launched  on 
a pilot  basis  under  the  auspices  of Operation  Restore  Trust.  Through  the  Voluntary 
Disclosure  Pilot  (VDP)  program,  the  OIG,  in conjunction  with  the  Department  of Justice 
(DOJ),  has  established  procedures  by which  health  care  corporate  providers  in the  target 
health  care  sectors  may come  forward  with full disclosure  of potential  fraud  and  abuse 
which  may give rise to corporate  liability.  The  VDP  is modeled  after  a voluntary 
disclosure  program  initiated  in 1986 by the  Department  of Defense  for treating 
self-disclosed  incidents  of fraud  by defense  contractors.  There  have  been  more  than  300 
successful  disclosures  under  that  program. 
The  VDP  program  is available  to home  health  agencies,  nursing  facilities,  medical 
suppliers  and  hospice  care  providers  whose  activities  affect  Medicare  and  Medicaid 
beneficiaries  in the  five target  States.  The  Inspector  General  has  stated  her  intention 
that  the  OIG  employ  similar  procedures  in treating  voluntary  disclosures  that  do not 
meet  the jurisdictional  criteria  of the  pilot. 
The  primary  purpose  of the  VDP  program  is to facilitate  increased  industry  participation 
in the  detection  and  prevention  of Medicare  and  Medicaid  fraud  and  abuse.  Promoting 
self-disclosure  further  enables  the  OIG  to identify  developing  patterns  and  practices  of 
fraudulent  activity  in the  designated  industry  segments.  Voluntary  disclosure  offers 
self-disclosing  entities  the  opportunity  to minimize  the  potential  cost  and  disruption  of a 
full scale  audit  and  investigation;  to negotiate  monetary  settlements  to the  Medicare  and 
Medicaid  programs  based  upon  the  matter  disclosed,  including  a possible  reduction  in 
exposure  from  treble  to double  damages;  and  to reduce  or avoid  an OIG  permissive 
exclusion  under  42 U.S.C.  1320a-7(b),  as appropriate. 
The joint  OIG/DOJ  procedures  for the  VDP  were  announced  in June  1995.  Since  that 
time,  the  OIG  has been  engaged  in a multi-track  implementation  process.  The  first track 
has  addressed  internal  needs,  with  attention  to staff training  and  development  of internal 
program  materials  and  protocols.  A second  track  is aimed  at educating  the  health  care 
community,  including  the  health  care  defense  bar,  about  this new program  and  the 
voluntary  disclosure  procedures.  In an effort  to promote  awareness  of the  VDP,  the 
OIG  has  spoken  publicly  about  the  program,  disseminated  media  materials  about  the 
VDP,  as well as fielded  telephone  and written  inquiries  from  providers  and  counsel. 
Many  internal  and  public  activities  of Operation  Restore  Trust  have  presented  significant 
opportunities  for VDP  implementation.  The  OIG  has received  a growing volume  of 
inquiries  about  the  VDP,  including  significant  interest  from  providers  who  are  not  within 
the jurisdiction  of Operation  Restore  Trust.  These  disclosures  of fraudulent  practices  are 
being  handled  as voluntary  disclosures  in the  manner  described  by the  VDP  procedures. 
Because  volunta~  disclosures  are  accorded  the  same  investigative  sensitivity  as other 
ongoing  OIG  investigations,  there  is little  that  may be  disclosed  about  individual  cases  at 
this time. 
34(cid:1)