HCFA held a meeting with outside organizations on November 13, 1998 to review its Comprehensive Plan for Program Integrity. According to HCFA Administrator Nancy-Ann DeParle, the goal of the Comprehensive Plan is to "pay it right the first time" — that is, to pay the right amount to the right provider for medically necessary services provided to an eligible beneficiary. At the meeting, members of HCFA's Senior Staff described the ten short-term initiatives HCFA expects to address over the next six to eighteen months to accomplish this goal. Many of the initiatives are still in preliminary stages, with work plans and performance goals still to be developed.

Program Management Initiatives
Five of the initiatives focus on program management improvements, including:

Implementation of the Medicare Integrity Program
designed to implement the contracting authority created by HIPAA, which permits HCFA to contract with outside entities as Program Safeguard Contractors (PSCs) for medical reviews, cost report audits, fraud reviews, and pre- and post-payment audits
Millennium Contingency Planning
business continuity planning in the event of Y2K system problems
Medical Review/Benefit Integrity
objectives aimed toward decreasing the claim payment error rate identified in the 1997 CFO audit (11 percent of Medicare claims were inappropriately paid) to 5 percent by 2002
Payment Safeguards for Balanced Budget Act of 1997 Provisions
targeting several BBA-established programs for which HCFA will develop a strategic approach focusing on criteria, instructions, and medical standards
Promoting Provider Integrity
focusing on provider enrollment and re-enrollment as a means of promoting program integrity

Program Service Initiatives
The remaining five initiatives, which are discussed below, focus on program-specific service areas that are "particularly vulnerable to fraud and abuse."

Inpatient Hospital Care
HCFA will focus on inpatient PPS settings to develop a payment error prevention program through the professional review organizations (PROs). The program has three parts:

Surveillance - Clinical data abstraction centers will be used for DRG validation samples. A payment error detection edit will be added, to identify what errors are being made.
Capacity Building - The PRO Sixth Scope of Work will be used to identify sources and types of payment errors, and interventions to correct those errors. Intervention will range from education of providers to referrals for fraud and abuse investigations.
Performance Measurements - An independent survey will be conducted in each state to assess each state's payment error rate. This rate will be a baseline for the PRO. Each PRO will have an incentive contract under the Sixth Scope of Work that will provide for a bonus if the PRO reduces a state's payment error rate by 50 percent. It will be up to the PRO to establish a relationship with the intermediary with respect to claims denials.

Congregate Care
The congregate care initiative focuses on settings where numerous Medicare and/or Medicaid beneficiaries congregate, including nursing homes, custodial care, assisted living facilities, boarding houses, senior citizen centers, and adult day care centers. These settings, in which services are billed separately to Part B by medical professionals (physicians, podiatrists, DME suppliers, etc.), have several vulnerabilities. Where beneficiaries are gathered, there is, in the words of a HCFA staffer, "temptation for the ethically challenged." The Part B providers deal with the facility rather than the patients to get access to medical records or Health Insurance Claim numbers. The billing is then submitted to third parties without facility involvement. The areas to be targeted are:

gang visits (medical necessity is questionable under such conditions);

routinized billings in nursing homes (e.g., therapies) (were services actually rendered); and

duplicate payments (where Medicaid rates cover services billed to Part B).

Various obstacles exist in dealing with this group of beneficiaries:

Where are the beneficiaries? (I.e., representative payees and direct deposit make it difficult to know the physical whereabouts of the beneficiaries.)

Some of the locations are not certified by Medicare or Medicaid (e.g., adult day care).

HCFA does not quickly recognize billing anomalies or geographic relocation of scams.

HCFA needs to develop a better definition of congregate care and identify the types of program integrity issues at each type of location. The congregate care initiative also will assess the impact of SNF PPS and consolidated billing and develop recommendations.
Managed Care
The managed care initiative has three components:

use of PSCs (as discussed above in relation to implementation of the Medicare Integrity Program) for ongoing or short projects on payment validation, enrollment eligibility, entitlement eligibility, and financial audits of all Part C plans each year;

evaluating current tools and updating monitoring protocol;

establishing new safeguards for fraud and abuse detection and prevention, including use of data-driven plan monitoring; model compliance plans in all Part C organizations; certification by all CEOs and CFOs of Part C organizations that the data submitted is accurate, complete, and truthful; expansion of sanction authority under the Balanced Budget Act; and more communication between the GAO and OIG.

Community Mental Health Centers
The OIG has determined in a recent study that 92 percent of mental health claims did not qualify as partial hospitalization program claims. The initiative work plan focusing on community mental health centers involves ten points:

terminate the worst providers;

reenforce standards;

increase scrutiny of new entrants;

protect access for beneficiaries;

seek authorization for prospective payment system;

evaluate benefits (what should be covered);

conduct intensive medical review;

better define eligible patients and perform enhanced initial claim reviews;

maintain health and safety standards; and

develop process for reenrolling providers.

HCFA proposes to "delink" the provider agreement (a legal document) from the provider number (an administrative tool). HCFA would like to check and audit the provider number without going through the legal processes attached to the provider agreement.
Nursing Home Initiative
The nursing home initiative focuses on the nursing home enforcement regulations which changed the way surveys were conducted from an emphasis on the conditions of participation to a more patient-oriented approach that imposes penalties for instances of poor care or abuse. HCFA is considering the following under this initiative:

staggered surveys (weekends, evenings);

increase patient sample size in the survey, focusing on nutrition, dehydration and pressure sores;

identifying poor-performing nursing home chains and giving greater scrutiny to other homes in the chain;

training inspectors;

a new federal program overseeing the 52 state survey agencies, to change from a "partnership" approach to an approach under which the survey agency is HCFA's agent performing HCFA's tasks;

a focus on nutrition and hydration;

national education;

more guidance to state agency surveyors and nursing homes on quality of life in nursing homes;

eliminating patient abuse;

working with the DOJ and OIG to prosecute egregious cases of poor quality care, using the False Claims Act;

seeking legislation to require nursing homes to perform criminal background checks using the FBI database; and

talking with elder care attorneys to inform them of the inspection and enforcement processes and MDS data and performance measures.