Self-administered drug probe shifts to take-home drugs

Federal prosecutors in Ohio are backing off from their probe of whether hospitals improperly billed for self-administered drugs, Compliance Hotline has learned. The retreat comes after the Ohio intermediary has already audited five hospitals for such billing, and amid a promised OIG investigation of self-administered drugs nationwide.

But don't breathe a sigh of relief yet. Ohio investigators are now shifting their cross hairs to hospitals that billed Medicare for drugs that were given to patients to take home. These include, for instance, pills that a doctor hands a patient before sending him home, according to Charles Cataline, director of health policy for the Ohio Hospital Association.

Jim Bickett, the Assistant U.S. Attorney for Northern Ohio, who's spearheading the self-administered drug probe, says he dropped the investigation when he realized that hospitals were given bad guidance from the Ohio FI. Hospitals were advised in a memo in 1988 from the Ohio intermediary that any drugs administered at the hospital would not be considered self-administered. "Now the FI says that whoever sent that memo didn't know what he was talking about, and he was wrong," admits Bickett.

The carrier memo contradicts Medicare's traditional policy of classifying these drugs, which has tended to focus less on how and where the drugs are taken and more on whether they can theoretically be administered by patients themselves. Medicare won't pay for drugs that patients should be able to take themselves, such as aspirin or some types of insulin, unless they are taken for diagnostic purposes and are given through injections or IVs, says Cataline. That has created confusion over whether, for example, a salve should be considered self-administered if it was spread by an ED nurse on the legs of an elderly burn victim who couldn't reach his legs, he adds.

Unfortunately for hospitals, investigators are discovering that billing for take-home drugs is actually a more widespread problem than self-administered medications. And while hospitals could claim they received poor guidance on self-administered drugs, they can't use the same alibi the second time around. The bottom sentence of that carrier memo explicitly warned hospitals not to bill for take-home medication, says Bickett.

The Justice Department will also have an easy time identifying its targets. "These are hospitals with large outpatient clinics that have a habit of passing out a lot of drugs," he says.

Several hospitals have voluntarily stepped forward to be audited, says Bickett, who declined to discuss the settlement negotiations. He did say that overbillings have ranged from $200,000 to amounts so small that one hospital was told it was off the hook. Strangely, even hospitals that know of the take-home drug probe have continued to bill for them. "We're still pulling claims for 1998," he muses.

Word of the investigations has prompted some hospitals to pay extra attention to the issue. MedCentral Health System, in Mansfield, Ohio, has its clinical auditors check all claims to ensure, among other things, that there are no bills for self-administered drugs, says compliance officer Dean Wiler.

Once the initial batch of settlements are done, a more wide-ranging investigation will begin in Ohio, though Bickett declined to estimate when that would be. Given the withering Congressional scrutiny of nationwide Justice Department investigations such as the lab unbundling crackdown, Bickett was careful to say that he was not coordinating a national probe. He did acknowledge that new Justice Department guidelines are having an effect on how prosecutors treat cases, by giving extra consideration to the clarity of guidance hospitals received from intermediaries, for example. "If it's a close call, you need to step back," he adds. "They provide a clear basis on when to say no or whether to proceed."