OIG Releases FY 2015 Work Plan

On October 31, 2014, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published its Work Plan for fiscal year (FY) 2015. The OIG announced that in the upcoming year, it will continue to investigate various Medicare and Medicaid claims made by nearly every type of provider group. Below is a brief survey of some of the OIG’s newly planned review and monitoring activities.

• new inpatient admission criteria: Prior OIG reviews identified millions of dollars in overpayments to hospitals for short inpatient stays that should have been billed as outpatient stays. In 2014, new criteria were put in place requiring physicians to treat patients whose care requires fewer than two nights in the hospital as outpatients, rather than inpatients. The OIG will review the impact of these new criteria on hospital billing, Medicare payments, and beneficiary copayments.

• review of hospital wage data used to calculate Medicare payments: The OIG plans to review hospital controls over the reporting of wage data that CMS uses to calculate wage indexes for Medicare payments. Hospitals are required under the Social Security Act to annually report accurate wage data to CMS so that the agency can develop wage index rates.

• adverse events in post-acute care for Medicare beneficiaries: The OIG plans to estimate the national incidence of “adverse and temporary harm events” for Medicare beneficiaries receiving post-acute care in both inpatient rehabilitation facilities (IRFs) and in long-term-care hospitals (LTCHs). With respect to both types of facilities, the OIG plans to identify the factors contributing to these events, determine the extent to which these events were preventable, and estimate the associated costs to Medicare. The OIG reported in 2011 that IRF care accounted for $7 billion in Medicare expenditures and LTCH care accounted for $5.4 billion in Medicare expenditures, making monitoring compliance of both types of facilities a priority for the OIG.

• hospitals’ electronic health record system contingency plans: The OIG will review the extent to which hospitals comply with contingency planning requirements of the Health Insurance Portability and Accountability Act (HIPAA). The HIPAA Security Rule “requires covered entities to have a contingency plan that establishes policies and procedures for responding to an emergency or other occurrence that damages systems that contain protected health information.” Specifically, the OIG will compare hospitals’ contingency plans with government- and industry-recommended practices.

• Medicaid beneficiary transfers from group homes and nursing facilities to hospital emergency rooms: The OIG will review the rate of and reasons for transferring patients from group homes or nursing facilities to hospital emergency departments. The OIG states that it believes high occurrences of emergency transfers from these facilities could indicate poor quality of care.

• selected independent clinical laboratory billing requirements: The OIG will review Medicare payments made to independent clinical laboratories in order to identify whether those laboratories routinely submit improper claims.

• payment for services made after beneficiaries’ death and for ineligible beneficiaries by Medicaid managed care organizations: The OIG plans to identify Medicaid managed care payments made on behalf of deceased beneficiaries or beneficiaries who were not eligible for Medicaid on some dates of service. Prior OIG reviews revealed that Medicaid has paid for a significant amount of services that purportedly started or continued either after a beneficiaries’ dates of death or during periods where the beneficiary was not eligible for Medicaid

• duplicate discounts for 340B purchased drugs: Section 2501 of the Affordable Care Act requires states to collect rebates for drugs paid through Medicaid managed care organizations (MCOs) and prohibits duplicate discounts under the 340B Program for such drugs. According to the OIG, however, the processes being used to prevent duplicate discounts in fee-for-service Medicaid may not be sufficient for drugs paid through Medicaid MCOs. The OIG will assess the risk of duplicate discounts for 340B-purchased drugs paid through MCOs as well as the states’ efforts to prevent this risk.

The OIG has also announced it will continue focusing on the following activities:

• appropriate payments: The OIG announced that planning is ongoing for FY 2015 and beyond to expand the agency’s portfolio examining insufficient payment policies and practices, including comparison among government programs to identify instances when Medicare paid significantly different amounts for the same or similar services or when less efficient payment methodologies were used.

• Medicare oversight of provider-based status: The OIG will determine the extent to facilities that claim provider-based status comply with the provider-based regulatory requirements codified at 42 CFR 413.65. Medicare payments are generally higher for services furnished in provider-based facilities compared to freestanding clinics.

• comparison of provider-based and freestanding clinics: The OIG will review and compare Medicare payments for clinic visits in provider-based facilities and freestanding clinics in order to determine the difference in payments made and assess the potential impact on the Medicare program of hospitals claiming provider-based status for their facilities.

• Medicare costs associated with defective medical devices: CMS has expressed concerns about the impact on the cost of replacement devices on Medicare payments for inpatient and outpatient care. Consequently, the OIG will review Medicare claims to identify the costs resulting from additional use of medical services associated with the replacement of defective medical devices and determine the impact of those costs on the Medicare Trust Fund.

• outpatient evaluation and management services billed at the new patient rate: The OIG will review Medicare outpatient payments to hospitals for evaluation and management services for clinic visits billed at the new patient rate in order to determine whether the services were furnished to new rather than established patients, and will recommend recovery of overpayments when appropriate. A new patient has not been admitted as an inpatient to, or registered as an outpatient of, the hospital within the last three years. Preliminary work has identified overpayments that have occurred because hospitals used new patient codes when billing for services furnished to established patients.

With respect to implementing the Affordable Care Act (ACA) programs, the OIG will focus its oversight on the operation of new Health Insurance Marketplaces and the expansion of the Medicaid program. The OIG has prioritized four key areas for reviews: payment accuracy; eligibility systems; management and administration; and security of data and consumer information.