OIG Releases 2015 Work Plan

On October 31, 2014, the Department of Health and Human Services (“HHS”) Office of the Inspector General (“OIG”) released its Fiscal Year (“FY”) 2015 Work Plan summarizing its new and ongoing investigative, enforcement, and compliance priorities for the upcoming fiscal year.

For FY 2014, the OIG reported recoveries of over $4.9 billion, consisting of nearly $834.7 million in audit receivables and about $4.1 billion in investigative receivables. Additionally, it reported exclusions of 4,017 individuals and entities from participation in Federal healthcare programs; 971 criminal actions against individuals or entities that engaged in crimes against HHS programs; and 533 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, CMP settlements, and administrative recoveries related to provider self-disclosure matters.

The OIG states that it will continue to focus on emerging payment, eligibility, management, and IT systems security vulnerabilities. Additional areas of focus include: quality and access in Medicare and Medicaid, public health and human services programs, and the appropriateness of Medicare and Medicaid payments.

A complete copy of the Work Plan is available here. Below is a summary of key provisions which provide significant insight on the OIG’s objectives for FY 2015:

• New Inpatient Admission Criteria: The OIG continues to focus on inpatient hospital admissions. For FY 2015, it will determine the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary co-payments. Its review will also determine how billing varied among hospitals in FY 2014. Beginning in FY 2014, new criteria state that physicians should admit Beneficiaries for inpatient care who are expected to require care that crosses at least two midnights (known as “the two-midnight rule”). Beneficiaries whose care is expected to last fewer than two midnights should be treated as outpatients.

• Analysis of Salaries Included in Hospital Cost Reports: OIG will review data from Medicare cost reports and hospitals to identify salary amounts included in the operating costs reported to and reimbursed by Medicare. Additionally, OIG will determine the potential impact on the Medicare Trust Fund if the amount of the employee compensation that could be submitted to Medicare for reimbursement on future costs reports had limits. Employee compensation may be included in allowable provider costs only to the extent that it represents reasonable remuneration for managerial, administrative, professional and other services related to the operation of the facility and furnished in connection with patient care.

• Medicare Oversight of Provider-Based Status: OIG will determine to the extent which provider-based facilities meet CMS’s criteria. Provider-based status allows facilities owned and operated by hospitals to bill as hospital outpatient departments. Provider-based status can result in higher Medicare payments for services furnished at provider-based facilities and may increase beneficiaries’ co-insurance liabilities.

• Comparison of Provider-Based and Free-Standing Clinics: OIG will review and compare Medicare payments for physician office visits in provider-based clinics and free-standing clinics to determine the difference in payments made to clinics for similar procedures and assess the potential impact on the Medicare program of hospitals’ claiming provider-based status for such facilities. Provider-based facilities often receive higher payments for some services than do freestanding clinics. The requirements to be met for a facility to be treated at provider based are at 42 CFR § 413.65(d).

• Critical Access Hospitals–Payment Policy for Swing Beds: OIG will compare reimbursement for swing-bed services at critical access hospitals (“CAHs”) to the same level of care obtained at a traditional SNFs to determine whether Medicare could achieve savings through a most cost effective payment methodology.

Nursing Homes
• Questionable Billing Patterns for Part B Services During Nursing Home Stays: OIG will identify questionable billing patterns associated with nursing homes and Medicare providers for Part B services provided to the nursing home residents during stays not paid under Part A.

Other Provider & Suppliers
• Ambulatory Surgical Centers–Payment System: OIG will review the appropriateness of Medicare’s methodology of setting ASC payment rates under the revised payment system. Additionally, it will also determine whether payment disparity exists between the ASC and the hospital outpatient department payment rates for similar surgical procedures provided in both settings
• Anesthesia Services–Payments for Personally Performed Services: OIG will review Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements. Additionally, OIG will determine whether Medicare payments for anesthesia services reported on a claim with the “AA” service code modifier met Medicare requirements. Physicians report the appropriate anesthesia modifier code to denote whether the services were personally performed or medically directed.

• Diagnostic Radiology–Medical Necessity of High-Cost Tests: OIG will review Medicare payments for high-cost diagnostic radiology tests to determine whether the tests were medically necessary and to determine the extent to which use has increased for these tests.

• Imaging Services–Payments for Practice Expenses: OIG will review Medicare Part B payments for imaging services to determine whether they reflect the expenses incurred and whether the utilization rates reflect industry practices. For selected imaging services, OIG will focus on practice expense components, including the equipment utilization rate. Practice expenses may include office rent, wages, and equipment.

• Selected Independent Clinical Laboratory Billing Requirements (new): OIG will review Medicare payments to independent clinical laboratories to determine laboratories’ compliance with selected billing requirements. The results of the reviews will be used to identify clinical laboratories that routinely submit improper claims and recommend recovery of overpayments where appropriate. Prior OIG audits, investigations and inspections have identified independent clinical laboratory areas at risk for noncompliance with Medicare billing requirements.

• Physicians–Place-of-Service Coding Errors: OIG will review physicians’ coding on Medicare Part B claims for services performed in ASCs and hospital outpatient departments to determine whether they properly coded the places of service. Prior OIG reviews determined that physicians did not always correctly code non-facility places of service on Part B claims submitted to and paid by Medicare contractors. Federal regulations provide for different levels of payments to physicians depending on where services are performed.

• Portable X-Ray Equipment–Supplier Compliance with Transportation and Setup Fee Requirements: OIG will review Medicare payments for portable x-ray equipment services to determine whether payments were correct and were supported by documentation. We will also asses the qualifications of the technologists who performed the services. Prior OIG work found that Medicare may have improperly paid portable x-ray suppliers for return trips to nursing facilities (i.e., multiple trips to a facility in 1 day). Medicare generally reimburses for portable x-ray services if the conditions of coverage are met.

Information Technology Security, Protected Health Information, and Data Accuracy
• Controls over Networked Medical Devices at Hospitals: OIG will examine whether CMS oversight of hospitals’ security controls over networked medical devices is sufficient to effectively protect associated electronic protected health information (“ePHI”) and ensure beneficiary safety. Computerized medical devices, such as dialysis machines, radiology systems, and medication dispensing systems that are integrated with electronic medical records (“EMRs”) and the larger health network, pose a growing threat to the security and privacy of personal health information. Such medical devices use hardware, software, and networks to monitor a patient’s medical status and transmit and receive related data using wired or wireless communications.

Other Medicaid Services, Equipment, and Supplies
• Billing & Payments, Transportation Services–Compliance with Federal and State Requirements: OIG will review Medicaid payments by States to providers for transportation services to determine the appropriateness of the payments for such services. Federal regulations require States to ensure necessary transportation for Medicaid beneficiaries to and from providers (42 CFR § 431.53). Each state may have different Medicaid coverage criteria, reimbursement rates, rules governing covered services, and beneficiary eligibility for services.

Medicaid Managed Care
• Medicaid Managed Care Entities’ Identification of Fraud and Abuse: OIG will determine whether Medicaid MCOs identified and addressed potential fraud and abuse incidents. We will also describe how States oversee MCOs’ efforts to identify and address fraud and abuse. A prior OIG report revealed that over a quarter of the MCOs surveyed did not report a single case of suspected fraud and abuse to their State Medicaid agencies in 2009. The report also found that MCOs and States are taking steps to address fraud and abuse in managed care and they remain concerned about their prevalence. All MCOs are required to have processes to detect, correct, and prevent fraud, waste, and abuse. However, the Federal requirements are general in nature (42 CFR § 438.608), and MCOs vary widely in how they deter fraud, waster, and abuse.

• Oversight of Managed Care Entities’ Marketing Practices: OIG will review State Medicaid agencies’ oversight policies, procedures, and activities to determine the extent to which States monitor Medicaid MCOs’ marking practices and compliance with Federal and State contractual marketing requirements. Additionally, OIG will also determine to the extent to which CMS ensures that States comply with Federal requirements involving Medicaid MCO marketing practices. No marketing materials may be distributed by Medicaid MCOs without first obtaining States’ approval. (Social Security Act, § 1932(d)(2)). States are permitted to impose additional requirements in contacts with MCOs about marketing activities. (42 CFR § 438.104).

Takeaways from the OIG Work Plan

The OIG Work Plan is a valuable resource to healthcare organizations as it serves as a tool in identifying compliance risk areas. Organizations should consider utilizing the plan as a roadmap drafting their corporate compliance programs–though the Plan should not be the only resource relied upon.

For more information, or for questions regarding healthcare compliance efforts, please contact Adrienne Dresevic, Esq. or Clinton Mikel, Esq. at (248) 996-8510 or via email at adresevic@thehlp.com or cmikel@thehlp.com.

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