On November 2, 2015, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published its Work Plan for fiscal year (FY) 2016. 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 the most significant of the OIG’s new review and monitoring activities. We have also highlighted any significant revisions made by the OIG to activities previously specified in its FY 2015 Work Plan and FY 2015 Work Plan Mid-Year Update.

  • Medicare oversight of provider-based status (revised): The OIG has previously worked to determine the extent to which provider-based facilities meet CMS’s criteria. In 2016, the OIG will expand its scrutiny to the number of provider-based facilities that hospitals own and the extent to which CMS has methods to oversee provider-based billing.
  • Review Medicare payments to Part B made during the MS-DRG payment window: Prior OIG reviews have identified the need to review whether Medicare payments made to acute care hospitals to Part B for certain outpatient claims while the beneficiary remained an inpatient were allowable. The OIG recognizes that certain services, supplies, and items provided to inpatients should not be billed separately to Part B when they are already covered under Part A.
  •   Review of Medicare Payments for Replaced Medical Devices: The OIG will review whether Medicare payments made for replaced medical devices during an inpatient or an outpatient procedure comply with Medicare requirements and Federal regulations, which require a reduction in Medicare payments for such devices.
  •  CMS validation of hospital-submitted quality reporting data: The OIG will conduct validation of its hospital inpatient quality reporting program. The study will allow CMS to use the data for the hospital acquired condition reduction program and the hospital value-based purchasing program.
  •   Skilled nursing facility prospective payment system requirements: The OIG will review compliance with various aspects of the skilled nursing facility (SNF) prospective payment system. This review will focus on whether the provision of therapy by SNFs is reasonable and necessary, which must be proven by the required documentation. Prior OIG reviews have found that Medicare payments for therapy greatly exceeded SNF’s cost for therapy and that SNF’s have increasingly billed for the highest level of therapy even though key beneficiary characteristics have generally remained the same.
  •  Hospice general inpatient care (revised): The OIG has previously reviewed the use of hospice general inpatient care claims. For 2016, the OIG has made clear that as part of this review it will scrutinize beneficiaries’ plans of care and determine whether they meet key requirements.
  •  Ambulatory surgical centers – quality oversight: The OIG will review Medicare’s quality oversight of ambulatory surgical centers (ASCs). Prior OIG reviews have revealed issues relating to ASCs including gaps of five or more years between certification surveys, poor CMS oversight of State survey agencies, and little public information on the quality of ASCs.
  • Review of select Medicare services and supplies ordered: The OIG will review select Medicare supplies, durable medical equipment (DME), and services referred or ordered by practitioners to determine whether reimbursements were made based on Medicare requirements. Because the ACA, Section 6405, requires practitioners who order certain supplies, DME, and services for Medicare beneficiaries to be enrolled in Medicare and legally eligible to order or refer such items, anything referred or ordered by an individual who is not enrolled in Medicare should not be reimbursed.
  • Anesthesia -non-covered Services: The OIG will review Medicare Part B claims for anesthesia services to determine whether they were reasonable and necessary in accordance with Medicare requirements. The OIG has specifically indicated that anesthesia services will be reviewed to determine whether the beneficiary actually had a related Medicare service.
  •  Part B payments for drugs purchased under the 340B Program (revised): The OIG has previously focused on calculating how much Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs. In 2016, they will determine the financial impact on 340B-covered entities, the Medicare program, and Medicaid beneficiaries under three proposed shared savings arrangements that would enable Medicare and its beneficiaries to share in the cost savings resulting from 340B discounts.
  • Analyze Accountable Care Organizations (ACOs): The OIG plans to review the performance and cost savings of ACOs that participate in the Medicare Shared Savings Program. Specifically, the OIG will describe the qualities of ACOs that performed well on the desired measures and identify strategies and challenges ACOs face when attempting to simultaneously achieve cost savings and quality.
  •  Medicare benefit integrity contractors’ activities (revised): The OIG previously intended to review and report on the level of benefit integrity activity performed by Medicare benefit integrity contractors. These contractors are contracted to carry out benefit integrity activities to safeguard the Medicare program against fraud, waste, and abuse. In its 2016 Work Plan, the OIG has renewed its commitment to this review, and explained that the results will highlight trends in integrity activities and allow for a quick comparison of program results across years, across contractors, and across the parts of the Medicare program.
  • CMS management of the implementation of ICD-10: The OIG will review certain parts of how CMS has managed the implementation of ICD-10 codes for Medicare Parts A and B. The review will include an analysis of CMS’s and its contractors’ provision of assistance to physicians and hospitals affected by the changes, including how the ICD-10 change is affecting the submission and processing of claims and appeals. As of October 1, 2015, all Medicare claims with a date of service on or after that date must contain an ICD-10 code. CMS has informed providers that during the first 12 months of ICD-10, there will be some flexibility in the specificity required in submitting the ICD-10 codes.
  •  Review of financial interests reported under the Open Payment Program (revised): The OIG will continue to determine the number and nature of financial interests that were reported to CMS under the Open Payments Program, which requires manufactures to disclose to CMS payments made to physicians and teaching hospitals.
  • Review of Medicare Eligibility Verification Transactions for Medicare Part D: The OIG will review E1 Medicare Eligibility Verification transactions that are submitted to pharmacies to determine whether the beneficiary is eligible to participate in Medicare Part D and to calculate the true out-of-pocket (TrOOP) balance for these beneficiaries.
  • Part D Pharmacy Enrollment: The OIG has previously identified concerns regarding the oversight of Medicare Part D and fraud related to pharmacies. In June 2015, the OIG also charged more than 240 subjects with defrauding Medicare and Medicaid, and most of the allegations involved pharmacies and prescription drugs. As a result, the OIG plans to consider CMS’s capability to oversee Part D pharmacies. In addition, the OIG will review which pharmacies are enrolled in Medicare if those pharmacies bill for Part D drugs, especially Part D drugs identified as “high risk.”
  • Compare increases in the prices for brand name drugs under Part D: The OIG will compare pharmacy reimbursement amounts for brand name drugs under Medicare Part D from 2010 to 2014. This comparison will involve a review of the rate of change with respect to reimbursement amounts and the rate of inflation during the same timeframe.
  •  State Program Integrity Activities and Compliance with Federal Requirements (revised): The OIG will continue to: review whether States have collected the required ownership for provider entities that are enrolled in Medicare and Medicaid; determine whether enrolling and enrolled providers have been screened through the exclusions databases; review whether States are conducting enhanced screenings that assess risk for fraud, waste, and abuse for moderate – and high-risk enrolling and revalidating Medicaid providers and suppliers; and review States’ use of payment suspensions. Such Federal scrutiny of State Medicaid programs could, in turn, result in increased scrutiny by Medicaid programs of provider activities.
  • FDA- monitoring of domestic and imported food recalls (revised): The OIG announced in its 2015 Work Plan Mid-Year Update that it will audit FDA’s monitoring of imported food recalls. In 2016, the OIG will also oversee domestic food recalls. The OIG will determine the extent to which FDA has implemented the Food Safety Modernization Act (FSMA) regarding the recall of food products and whether FDA has an effective recall process in place to ensure the safety of the Nation’s food supply.
  • Examine FDA’s oversight of networked medical devices used at hospitals: The OIG will examine whether the FDA’s current oversight of networked medical devices used at hospitals effectively protects patients’ electronic protected health information (PHI). Many of the medical devices used at hospitals have associated electronic medical records and are integrated with health networks, resulting in a risk to the privacy and security of PHI.
  • NIH—controls over subcontracting of NIH grant and contract work: The OIG will assess colleges’ and universities’ controls over the subcontracting of NIH grant work, with a specific focus on whether colleges and universities are effectively monitoring such subcontracted services to ensure that Federal funds are spent on allowable goods and services.