Every year the US Department of Health and Human Services (HHS) publishes the Office of Inspector General’s (OIG’s) Top Unimplemented Recommendations: Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs (https://oig.hhs.gov). In its recently published 2022 edition of almost 100 pages, it focused on 25 unimplemented recommendations that HHS viewed would most positively affect cost savings, public health and safety, as well as program effectiveness and efficiency, if implemented. The numbering of recommendations does not necessarily indicate prioritization. Some recommendations of this edition appear for the first time.

The two largest Federal health programs, Medicare and Medicaid, provide health insurance coverages to over 43% of Americans. These programs are overseen by the Centers for Medicare & Medicaid Services (CMS). CMS provides direction and technical guidance for the administration of the Federal effort to plan, develop, manage, and evaluate health care financing programs and policies, and OIG promotes changes that help CMS to improve such programs. Some of this is done through the annually published recommendations. In this article we provide highlights of what we believe are the most notable recommendations of this year’s edition.

• CMS should take actions to ensure that incidents of potential abuse or neglect of Medicare and Medicaid beneficiaries are identified and reported.

CMS does not require State Survey Agencies (SSA) to record and track all incidents of potential abuse or neglect made to law enforcement and other appropriate agencies. Nevertheless, cases of potential unreported child abuse and neglect, as well as abuse and neglect in skilled nursing facilities and hospice service providers were identified. These cases reveal vulnerabilities in beneficiary protections that CMS is committed to address and to better ensure that beneficiary harm is not only identified, reported and addressed, but also ultimately prevented. Although CMS determined that the current Federal requirements are sufficient and no further action is required from CMS, it developed and published a video to educate the public on how to file complaints about health care treatment issues. Additionally, CMS is revising its violations reporting guidance to SSAs to ensure that complaints of abuse and neglect are tracked and referred appropriately.

• CMS should address inappropriate nursing home discharges through training, by implementing deferred initiatives, and by assessing the effectiveness of its enforcement against inappropriate facility-initiated discharges.

OIG identified multiple challenges that exist in identifying and addressing inappropriate facility-initiated discharges by nursing homes and assessing their frequency. As a result, CMS stated that it plans to provide training, including clarification of guidance around facility-initiated discharges and/or transfers. CMS will also incorporate an assessment of the effectiveness of enforcement actions in response to inappropriate facility-initiated discharges. Besides, CMS indicated that it is working on implementing a variety of initiatives that it had previously deferred.

• CMS should take steps to reduce the costs for Medicare and its beneficiaries by promoting the use of less costly, clinically appropriate drugs.

In 2010 and 2011 less costly alternative polices that based the payment for the least costly alternative among a group of clinically comparable products were rescinded for Part B drugs. This increased Medicare expenditures for certain prostate cancer drugs by $33.3 million over one year and utilization patterns shifted substantially in favor of certain costlier products. Nevertheless, CMS did not concur with OIG’s 2012 recommendation to seek authority to implement the least costly alternatives policy in certain Part B circumstances. Moreover, CMS did not show any plans for taking any action at this time either.

However, CMS concurred with OIG’s recommendation to encourage Part D plans to increase access to and use of biosimilars. It is established that if the use of biosimilars becomes more widespread costs for Part D and beneficiaries could potentially be significantly reduced.

• CMS should seek legislative authority to comprehensively reform the hospital wage index system.

OIG identified significant vulnerabilities in the wage index system for Medicare payments such as inability of CMS to penalize hospitals that submit inaccurate or incomplete wage data. Besides, wage indexes may not always accurately reflect local labor prices, and, therefore, Medicare payments to hospitals and other providers may not be properly adjusted to reflect local labor costs. CMS concurred with OIG’s non-legislative recommendations to work with Medicare Administrative Contractors to develop a program of in-depth wage data audits that are focused on hospitals with wage data that highly influence wage indexes in their respective areas.

• CMS should recover overpayments of $1 billion resulting from incorrectly assigning severe malnutrition diagnosis codes to inpatient hospital claims, ensure that hospitals bill appropriately moving forward, and conduct targeted reviews of claims at the highest severity level that are vulnerable to upcoding.

Based on the review of 200 claims sample, OIG estimated that hospitals received overpayments of approximately $1 billion for inaccurate use of severe malnutrition diagnosis codes for fiscal years 2016 and 2017. It was also determined that hospitals are increasingly billing for inpatient stays at the highest severity level, which is the most expensive. These stays increased from 2014 to 2019 ultimately accounting for nearly half of all Medicare spending on inpatient hospital stays. Consequently, CMS tasked its Supplemental Medical Review Contractor (SMRC) with research and analysis to develop a medical review strategy for malnutrition claims. It also tasked SMRC with post-payment claim review of claims with E41 and E43 from calendar year 2019.

• CMS should take steps to increase access to treatments for opioid use disorder.

As a top priority, OIG is focusing on curbing the opioid epidemic through enforcement mechanisms and identifying inappropriate prescribers and beneficiaries at risk of abuse or overdose in the Medicare Advantage and Part D programs. Part D is a prescription drug benefit provided through commercial insurance carriers, also known as Part D plan sponsors. Approximately 52.9 million beneficiaries received Medicare Part D benefits. In 2020 just over 1 million Medicare beneficiaries had a diagnosis of opioid use disorder. Although this chronic disease can be treated with medication, less than 16 percent of these beneficiaries received such medication to treat their opioid use disorder that year. Therefore, CMS has taken several steps to educate beneficiaries about access to medications for the treatment of opioid use disorder. Furthermore, steps were taken to increase the number of providers and opioid treatment programs for Medicare beneficiaries with opioid use disorder.

• CMS should develop policies and procedures to improve the timeliness of recovering Medicaid overpayments and recover uncollected amounts identified by OIG’s audits.

CMS has not recovered all overpayments identified in OIG audit reports in accordance with Federal requirements. More specifically, as of April 2022, CMS had not collected about $1.5 billion in overpayments identified in 73 out 84 OIG audit reports. Only $381.9 million was collected from a total of 19 reports. CMS has issued or in some cases is in the process of issuing disallowance and demand letters for some of the reports and is still reviewing and working to resolve complex policy questions for other reports. CMS is looking for ways to speed up discussions with State authorities, getting documents from them, and issuing letters of disapproval, in addition to exploring ways to expedite overpayment recovery.

• CMS should improve Medicaid managed care organizations’ (MCOs’) identifications and referrals of cases of suspected fraud or abuse.

Despite playing a crucial part in the battle against Medicaid fraud and abuse, MCOs’ attempts to identify and address fraud and abuse have certain weaknesses. It was discovered that not all MCOs performed proactive data analysis, and some MCOs only recognized and reported a small number of cases of suspected fraud or abuse to a State. CMS agreed with the recommendation and specified that it will keep collaborating with the States to offer technical support, education, and sharing of best practices to help the States improve MCO identification and the referral of cases of suspected fraud or abuse. Additionally, CMS stated that it intends to provide State Medicaid personnel with a Medicaid Managed Care course at the Medicaid Integrity Institute.

• HHS should ensure that cybersecurity incident response capabilities are fully implemented across the Department.

According to the Publication, not all operating divisions (OpDivs) have adequate cybersecurity incident response capabilities implemented by HHS, and the OpDivs’ adherence to the HHS cybersecurity incident response policy was not appropriately assessed. HHS failed to establish sufficient oversight over its cybersecurity incident response process to ensure OpDivs implemented adequate response capabilities. However, by establishing response roles and duties, HHS demonstrated that it has taken significant measures to create and address cybersecurity incident response capabilities across all OpDivs and Components. Nevertheless, HHS should make sure that all OpDivs abide by the HHS cybersecurity incident response policy and that cloud and service providers satisfy the contractual requirements for cybersecurity incident response reporting. HHS presented documentation of the efforts made by two OpDivs to address the response capabilities throughout the Department, however one of the OpDivs was unable to complete its implementation owing to budget and contracting concerns.

Paying attention to this 2022 edition and its recommendations will provide an understanding as to the OIG’s focus.

Vasilios J. (Bill) Kalogredis, Esq. has been exclusively advising physicians, dentists, and other health care professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is Chairman of Lamb McErlane PC’s Health Law Department. bkalogredis@lambmcerlane.com. 610-701-4402.

*Artyom (Art) Sharbatyan contributed to this article. Art has extensive real life practical experience in the healthcare field with particular concentration in dental practice groups. He represents healthcare providers in their business and legal needs at Lamb McErlane, PC’s Health Law Department. asharbatyan@lambmcerlane.com; 610-701-4416.

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