t 

Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

OPERATION RESTORE TRUST


ACTIVITIES


w 

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# JUNE GIBBS BROWN 

* G Inspector General 

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‘tivd~~ NOVEMBER 1995 

> 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 OIG’S 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 OIG’S 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 OIG’S 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 project’s 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 Physician’s 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 Physician’s 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, owner’s 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 Veteran’s 

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 physician’s 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 OIG’S 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 Eli’ility 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


Imag”ng 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: PROJECI’DESCRIPTIONS 

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 nonprofessional 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 beneficiary’s 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 beneficiary’s 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 

RiCO (A-02-94-01029) 

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 OIG’S 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 Medicare’s 

coverage conditions. In order to be paid by Medicare, a patient’s 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 hospice’s 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 AUDI’I’S AND 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 Nutn”entPayments in Numing Homes


Medicare Payments for Enteral Num”tion


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: PROJECT DESCRIIWIONS 

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 beneficiary’s 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 beneficiary’s 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, Medicare’s 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 Alzheimer’s 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 Nm”ent 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 Neca”ty 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 Medicare’s expectations that 

they act as controls against unnecessary use of non-physician services and supplies. This 

study will build on our work assessing the physician’s 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 

HHA’s 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 Aiello’s trial. Harrison


accepted gratuities for preferential handling of Aiello’s 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. Broccolo’s 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


Am”cles


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 

Ihitial Announcement 

�	 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. 

9	 0nMay3, the Inspector General held apress conference to announce and answer 

questions about Operation Restore Trust. 

�	 0nMay4, the Vice President’s speech before the White House Conference on 

Aging addressed the Operation Restore Trust initiative. 

9	 On May 4, a message announcing this new initiative was sent to all HHS 

employees was sent out via the e-mail and followed up with desk-to-desk delivery. 

9	 On May 11, Vice President Gore visited HHS to announce REGO II with 

Secretary Shalala and Deputy Secretary Broadnax. Operation Restore Trust was 

highlighted in the Vice President’s remarks. Press attended. 

Bess Reikases/Fact Sheets 

On May 3, 1995, a press release, with three fact sheets, were issued simultaneously 

with the President’s 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 HHSTIPS). 

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 Medicare’s 

hospice program. 

Fhzud Ah 

�	 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 General’s 

remarks focused on Operation Restore Trust. 

Anici% 

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


9 
. . 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 General’s 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 

Dingell’s staffers on the new fraud initiative. The briefing was requested by 

Dingell’s 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 General’s 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

—— . 
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
VOLUNTARY DISCLOSURE PILOT


The OIG’S 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. 

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