HHS 2021 Semiannual Report to Congress Draws Attention to Genetic Testing, Durable Medical Equipment, and Opioid Disorder Treatment | Venable LLP


On June 6, 2022, the US Department of Health and Human Services (HHS), Office of Inspector General (OIG), released its spring 2022 semiannual report to Congress. The semiannual report covers the period from October 1, 2021 to March 31, 2022. The report is an important window into the OIG’s current activities, issues of concern, and future activities.

Inspector General Christi A. Grimm emphasized that in this reporting period, “OIG continued to drive a positive return on investment from enforcement and oversight.” The agency’s auditing work identified $1.14 billion in expected recoveries, as well as $1.6 billion in questioned costs.

General Trends Mentioned in the Report

  1. OIG remains focused on efforts to target fraud in HHS programs.

    During this semiannual reporting period, OIG reported 307 criminal and 313 civil actions against individuals or entities that engaged in offenses related to healthcare. OIG also reported more than $1.18 billion in investigative receivables due to HHS and more than $262.0 million in non-HHS investigative receivables, including civil and administrative settlements or civil judgments related to Medicare, Medicaid, and other federal, state, and private healthcare programs.

    The OIG Hotline, which is the department’s method of intake and evaluation of fraud tips from the public, has also proven to be effective in addressing fraud, waste, and abuse. During this semiannual reporting period, the expected recoveries originating from hotline complaints amounted to $97 million.

    One of the most common types of fraud perpetrated against federal healthcare programs involves filing false claims for reimbursement. For example, a licensed professional counselor in Connecticut was sentenced to 57 months of imprisonment for operating a scheme that defrauded the Connecticut Medicaid Program of over $1.3 million. The counselor submitted claims for psychotherapy services that were for occasions and dates when no psychotherapy services of any kind were provided to Medicaid clients. Another pharmaceutical company agreed to pay the United States $12.7 million to resolve allegations that it caused the submission of false claims to federal healthcare programs for its opioid overdose drug.

  2. Improving nursing homes remains a top priority to OIG.

    Following the Biden administration’s initiative to improve nursing home quality and safety, OIG its announced continuing commitment to nursing home improvement. OIG plans to achieve this goal by implementing the PRO strategy: (1) Performance – understanding what makes poor performing nursing homes fail; (2) Residents First – ensuring that nursing homes prioritize quality of care and qualify of life for residents; and (3) Oversight – ensuring that the entities responsible for nursing home oversight, such as CMS and the states, detect problems and implement solutions in a time-efficient manner. The department intends to increase oversight and monitor identified areas of concern while implementing recommendations.

  3. Spending on the COVID-19 response continues to rise.

    Responding to the COVID-19 pandemic remains a priority for the HHS. The department aims to further the four goals that characterize OIG’s strategic planning and mission execution: (1) protect people; (2) protect funds; (3) protect infrastructure; and (4) promote the effectiveness of HHS programs now and in the future. HHS teams up with law enforcement partners to ensure adequate oversight, avoid duplication, and share insight. For example, HHS reported a net spending increase of 4 percent. Medicare Part B reported spending $1.5 billion on COVID-19 tests alone in 2020, while spending on non-COVID-19 tests declined by $1.2 billion.

  4. OIG aims to continue promoting good financial stewardship of traditional Medicare.

    OIG remains committed to promoting good financial stewardship by reducing improper payments and protecting the integrity of the Medicare program. After reviewing the 2021 Medicare Trustee report, actuaries projected that assets in the Part A trust fund will be depleted by 2026. The prediction adds urgency to ensuring that the funds are conserved and used appropriately for the sustainability of the Medicare program. For example, OIG identified trends that indicate that Medicare could be paying twice for items and services provided to beneficiaries in hospice care.

Areas of Possible Concern for the Future

  1. Genetic Testing and DME: Potential excessive use and improper payments.

    OIG noted an increase in genetic testing under Medicare Part B, raising concerns of potential excessive genetic testing and fraud. It did not propose recommendations but emphasized the importance of oversight by the Centers for Medicare & Medicaid Services (CMS) and Medicare Administrative Contractors (MAC) to prevent fraud, waste, and abuse. One doctor in Florida was sentenced to 82 months in federal prison and ordered to pay more than $61 million in restitution for his role in a $73 million conspiracy to defraud Medicare by paying kickbacks to a telemedicine company to arrange for doctors to authorize medically unnecessary genetic tests.

    OIG discovered improper payments of around $117 million over four years for durable medical equipment, prosthetics, orthotics, and supplies. It attributed the improper payments to lack of oversight, ineffective edit processes, and inappropriate modifier use. CMS concurred with OIG’s recommendations to improve the payment edit process and conduct reviews of modifier use. Two individuals in Florida were sentenced to 78 months and 63 months, respectively, for conspiring to defraud federal health benefit programs through the operation of a telemarketing company that generated medically unnecessary physicians’ orders for DME.

  2. Opioid Use Disorder: Medicare beneficiaries not receiving adequate treatment; OIG continues to prioritize protection against prescription drug abuse.

    Although there were 1 million Medicare beneficiaries diagnosed with opioid use disorder in 2020, less than 16 percent of these beneficiaries received medication and even fewer received both medication and behavioral therapy. Specifically, Asian/Pacific Islander, Hispanic, and Black beneficiaries were less likely to receive medication than White beneficiaries; and older beneficiaries were also less likely to receive their opioid use disorder medication. CMS concurred with OIG’s recommendations, which included increasing awareness of Medicare coverage for the treatment of opioid use disorder, increasing the number of opioid treatment programs for Medicare beneficiaries, and collecting data on the use of telehealth in opioid treatment programs.

    A former doctor conspired to receive approximately $344,000 in bribes and kickbacks from a pharmaceutical company in exchange for prescribing a fentanyl spray to patients with chronic pain conditions. As a result of violating the federal anti-kickback statute, the former doctor was sentenced to 24 months in prison.

To access the full report, click here.

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