The HHS Office of Inspector General (OIG) recently released its March 2015 edition of the OIG Compendium of Unimplemented Recommendations (Compendium).  The Compendium identifies the 25 highest-priority OIG recommendations that have not yet been implemented by HHS.  According to the OIG, HHS should prioritize the implementation of these recommendations because of the significant cost savings and/or quality improvement that would result. 

The recommendations identified were contained in previous OIG reports but have not yet been implemented due to various reasons.  For several of the recommendations, HHS disagreed with the recommendation when issued.  Additionally, as the OIG recognizes, HHS lacks the authority to pursue several of the recommendations because the implementation would require legislative action.  However, in those cases, the OIG notes that HHS can make recommendations to Congress, and Congress has previously incorporated such recommendations into legislative actions. 

The top 25 recommendations identified in the Compendium include, among others:

  • Reducing hospital outpatient department payment rates for procedures approved for ambulatory surgical centers (ASCs) – The OIG notes that Medicare pays more for certain procedures performed in hospital outpatient departments that could have been safely performed in an ASC setting.  Accordingly, the OIG urges HHS to seek legislation that would reduce the payment rates to hospitals for certain procedures performed in an outpatient department when the procedure could have been safely performed in an ASC.   The OIG estimates the savings from implementing this recommendation to be approximately $15 billion.  The OIG initially issued this recommendation in April 2014, but CMS disagreed with the recommendation noting that the recommendation may raise “circularity concerns” because most ASC payment rates are based on the outpatient hospital payment rates.  Additionally, CMS stated the change would require legislative changes that are not currently included in the President’s budget.
  • Expanding the Diagnosis Related Group (DRG) window – The DRG window determines when outpatient services related to inpatient admissions are included in the DRG lump-sum payment.  Under the current DRG window, Medicare does not separately reimburse related outpatient services delivered within three days of an inpatient admission in a setting owned by the admitting hospital.  The OIG recommends expanding this window beyond three days and also including services provided at hospitals sharing a common owner, such as affiliated hospitals.  The OIG estimates savings of approximately $308 million if this recommendation is implemented.
  • Establishing a transfer payment policy for early discharges to hospice care –  In May 2013, the OIG recommended that CMS establish a transfer payment policy for early discharges to hospice care.  The OIG notes that, while hospital payments are reduced for early discharges where the patient is transferred to another hospital or to a post-acute care facility, there is currently no such policy for early discharges to hospice settings.  Accordingly, the OIG recommends that CMS treat early discharges to hospice like early discharges to other care settings.  The OIG estimates this measure would save approximately $602.5 million.

To view the Compendium, click here