OIG 2015 Work Plan Released

The Department of Health and Human Services, Office of the Inspector General (OIG) has released its Work Plan (Plan) for Fiscal Year (FY) 2015.  The annually published Plan summarizes new and ongoing compliance activities, audits, and enforcement priorities that OIG plans to pursue this upcoming year. 

The OIG identified two new initiatives related to hospital services for 2015.  The first initiative relates to the review of hospital wage data used to calculate Medicare payments.  After the prior OIG wage index identified millions of dollars in incorrectly reported wage data, OIG plans to review hospital controls over reporting wage data used to calculate wage indexes for Medicare payments  The second initiative involves identifying adverse events in long-term care hospitals (LTCHs).  LTCHs are the third most common type of post-acute care facility and account for nearly 11 percent of Medicare costs in post-acute care.  OIG will estimate the national incidence of adverse events and identify factors contributing to such events. 

Additionally, OIG will continue to review hospital-related projects in the areas of policies and practices, billing and payments and quality of care and safety, which include: 

• impact of new inpatient admission criteria and billing variations among hospitals in FY 2014 after millions of dollars were paid by Medicare to hospitals for short inpatient stays that should have been billed as outpatient stays. Under the new criteria, only Medicare beneficiaries (Beneficiaries) expected to need at least two nights of hospital care (two midnight policy) should be admitted as inpatients, with Beneficiaries needing fewer nights of hospital care to be treated as outpatients;
• Medicare oversight of provider-based status enjoyed by facilities owned and operated by hospitals, which allows such facilities to bill as hospital outpatient departments and obtain higher Medicare reimbursement. This follows concern expressed by the Medicare Payment Advisory Commission about the financial incentives presented by provider-based status;
• comparison of Medicare reimbursement for provider-based and free-standing clinics to determine payment differences for similar procedures, as provider-based clinics receive higher payments for such procedures;
• selected inpatient and outpatient billing requirements for acute care hospitals, particularly those with claims at risk for overpayment, to assess hospital compliance after prior OIG audits, investigations and inspections have identified a risk for noncompliance with Medicare billing requirements;
• outpatient dental claims to determinate whether overpayments have been made for non-covered dental services since, generally, dental services are excluded from Medicare coverage;
• hospital participation in projects with quality improvement organizations (QIOs) to determine the extent to which quality improvement projects overlap with projects offered by other entities, as the Centers for Medicare and Medicaid Services (CMS) is required to enter into contracts with QIOs to improve the efficiency, economy, and quality of services delivered to Beneficiaries; and
• oversight of hospital privileging and the assessment process for medical staff candidates, including credential verification and review of the National Practitioner Databank, to assure staff accountability for quality of care provided to Beneficiaries.

OIG also identified a new area of focus for billing and payments related to selected independent clinical laboratory billing requirements.  Reviews of Medicare payments to such independent clinical laboratories will be used to identify laboratories that routinely submit improper claims and recommend recovery of overpayments.  In addition to the initiative mentioned above, the OIG will continue to review areas related to other providers and suppliers, which include: 

• ambulatory surgery centers (ASCs) payment rates under Medicare’s revised payment system and rate disparities between ASCs and hospital outpatient departments for similar surgical procedures;
• diagnostic radiology payments for high-cost tests and increased use for such tests to determine medical necessity;
• physician coding on Medicare Part B claims for services performed in ASCs and hospital outpatient departments to assess place of service coding errors resulting in higher reimbursement for non-facility settings, after prior a OIG determination that Part B services were not always correctly coded by physicians in non-facility settings; and
• anesthesia services payments for personally performed services and proper use of service code modifiers for reimbursement purposes because personally performed services are reimbursed at higher rates than anesthesia services that are medically directed.

Although most of the areas of interest are a continuation of the 2014 Plan, other notable new initiatives include:

risk assessment of CMS’ administration of the pioneer accountable care organization model, including a risk assessment of internal controls;

• Medicaid beneficiary transfers from group homes and nursing facilities to hospital emergency rooms to determine and address the quality of care provided in such facilities; and
• hospital electronic health record system contingency plans to determine compliance with the requirements of the Health Insurance Portability and Accountability Act (HIPAA) and comparison to government and industry recommended practices.

As indicated above, these are selected highlights of the Plan and provide valuable insight to providers in regards to OIG’s enforcement objectives for FY 2015.  Facilities and compliance officers should review the entire Plan, available here, to ensure that audit and enforcement activities prioritized by the OIG are recognized and addressed in their compliance plans.  Further updates on OIG audit and enforcement activities and related legal developments can be found in future editions of this bulletin.