It is that Time Again

It is that time again when the Office of Inspector General (“OIG”) publishes its Work Plan for the fiscal year outlining the areas of focus that it will investigate. The Work Plan highlights the OIG’s top priority to “fight fraud, waste and abuse”. The OIG’s strategic plan for fiscal year 2014 through 2018 specifically references using data analytics and risk assessments to identify suspected fraud, waste and abuse. The OIG also utilizes enforcement resources, including, but not limited to its partnership with the Department of Justice to impose penalties and potential criminal or administrative actions against individuals or entities who have allegedly committed fraud. All healthcare providers are subject to the OIG’s enforcement actions. Accordingly, it is imperative for each healthcare provider to establish an effective compliance program. Healthcare providers should utilize this Work Plan to establish what types of audits should be conducted during the year and to proactively address the matters that have been deemed “issues” by the OIG.

For hospitals, there are a couple of new items that the OIG will focus upon in 2014. One is the Medicare costs associated with defective medical devices. The OIG will evaluate what costs are incurred by the Medicare program to provide healthcare services to individuals who receive defective medical devices. Another new measure is the analysis of the salaries included in hospital cost reports. Employees who provide managerial, administrative, professional and other services to a hospital facility may have their salary expenses included on the Medicare cost report and reimbursed by Medicare. The OIG is evaluating whether or not the salaries are appropriate and whether the employee’s salary should have limits. The OIG is also focused on the level of payments that are made by Medicare for a physician visit that is made in a hospital clinic versus one that is made in a stand-alone physician practice. Because the reimbursement rates might differ if it is owned by a hospital, the OIG is evaluating whether or not the Medicare payments could be reduced or if there should be a different payment policy with regard to the provider based clinics. In addition the OIG is also examining the billing and payments related to outpatient services to ensure that the proper new codes are being utilized for new and established patients.

The OIG Work Plan also supports the delivery of quality care. One patient safety area is an examination of the pharmaceutical compounding wherein prescription drugs are tailored made to meet a patient’s medical needs. Another safety and quality review is investigating hospital’s emergency preparedness responses in light of the hurricanes and other natural disasters that have occurred in recent years. The OIG is also reviewing hospital privileging of physicians to ensure that the physicians have the appropriate credentials, experience and certifications to provide the services approved by the medical staff.

For physicians, the OIG is evaluating physicians to ensure that they are only accepting the Medicare allowed amount and not overcharging the Medicare beneficiaries. A second focus is determining whether or not the physicians are billing appropriately based upon their site of service. Specifically, if a physician bills a hospital visit, the hospital visit may have a higher reimbursement rate than if the physician billed the visit in his or her practice location. Therefore, the government is examining the claims to ensure that physicians are billing appropriately and not billing at the wrong site of service to increase the reimbursement amounts.

Two other areas that the OIG is evaluating in 2014 focus upon physical therapy visits and sleep disorder clinics. Specifically, the OIG is evaluating whether or not independent physical therapists are performing services that are medically necessary and documented appropriately. The other area of focus is the high utilization of sleeping disorder clinic services. Historically, in 2010 the OIG found that there was a high utilization of sleep testing procedures that cost Medicare approximately $415Million. The OIG is examining the sleep disorder procedures to determine whether or not they are reasonable and necessary and whether or not they satisfy the Medicare conditions of coverage under the payment guidelines and manuals. Therefore, both physical therapy services and sleep clinic services should be examined by providers to ensure that they comply with the Medicare billing rules and that the documentation in the medical record accurately and completely supports the claims that are submitted to Medicare for payment.

It is important for the compliance committee of each healthcare provider to examine the Work Plan and identify what vulnerabilities may apply to its organization. The compliance committee should identify several audits to be conducted during this fiscal year. The audit results should be reported to the Board compliance committee. The Board should evaluate the audits, endorse or modify them, as needed, receive the audit results and take proactive remedial measures to ensure that the organization is engaging in proper and compliant conduct. In the event improper conduct is discovered through this audit process, it is important for the Board to take remedial action and reassess the remedial action through subsequent audits. The compliance committee is the foundation for proactively ensuring that each individual employee, board member and vendor involved in the organization are dedicated to performing the proper activities to support high quality care in compliance with the complex and ever changing regulations.

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