Executive Summary

The United States Health and Human Services Office of the Inspector General (“OIG”) published its Fiscal Year 2016 Work Plan (“2016 Plan”) on November 2, 2015.  The work plan is published annually by the OIG and identifies new and ongoing investigative, enforcement and compliance priorities for the OIG in the upcoming year.  Along with its advisory opinions, provider-specific compliance guidelines, fraud alerts and special bulletins, the OIG’s annual work plans are a valuable resource for compliance officers and counsel to use when identifying internal audit and review topics for the upcoming year.

For 2016, the OIG identified a number of new areas of focus that apply to different types of healthcare organizations, including hospitals, long-term care providers and pharmacies. Some of the key new and revised areas of focus are summarized below.  In addition, the OIG will continue to focus on a number of issues it has focused on in the past. A complete copy of the 2016 Plan may be accessed here.

A. Hospital Audit Activities

In 2016, the OIG will focus on four new compliance risk areas for hospital activities and has revised its focus on one risk area, including: 

  1. Medical Device Credits for Replaced Medical Devices (NEW). OIG intends to determine whether Medicare payments for replaced medical devices were made in accordance with Medicare requirements.
  2. Medicare Payments during MS-DRG Payment Window (NEW). OIG will focus on reviewing Medicare payments to acute care hospitals to determine whether certain outpatient claims billed to Medicare Part B services provided during inpatient stays were allowable and in accordance with inpatient prospective payment systems. Certain items, supplies, and services furnished to inpatients are covered under Part A and should not be billed separately to Part B.
  3. Centers for Medicare and Medicaid Services (“CMS”) Validation of Hospital Submitted Quality Reporting Data (NEW). OIG intends to determine the extent to which CMS validated hospital inpatient quality reporting data.
  4. Part A and Part B Program Management Issues (NEW). OIG will review ACOs that participate in the Medicare Shared Savings Program and describe their performance on quality measures and cost savings over the first three years of the program; additionally the OIG will identify ACOs’ strategies for, and challenges to, achieving quality and cost savings.
  5. Medicare Oversight of Provider-Based Status (REVISED). OIG will focus on reviewing the number of provider-based facilities that hospitals own and the extent to which CMS has methods to oversee provided-based billing. OIG will also review the challenges associated with the provided-based attestation review process.

B. Nursing Home Audit Activities

In 2016, the OIG will focus on two new compliance risk areas for nursing home activities and has revised its focus on one risk area, including: 

  1. Skilled Nursing Facility Prospective Payment Systems Requirements (NEW). OIG will review compliance with various aspects of the skilled nursing facility (SNF) prospective payment system including the documentation requirements in support of the claims paid by Medicare. OIG will focus its review on therapy billing, and those situations where Medicare was billed at the highest level of billing.
  2. State Agency Verification of Deficiency Corrections (NEW). OIG intends to determine whether State survey agencies verified correction plans for deficiencies identified during nursing home recertification surveys.
  3. Hospice General Inpatient (REVISED). OIG will review the use of general inpatient care level for the Medicare hospice benefit. OIG intends to focus on reviewing content of election statements for hospice beneficiaries who received general inpatient care and the medical necessity of services of general inpatient care claims.

C. Prescription Drugs Audit Activities

In 2016, the OIG will focus on five new compliance risk areas for prescription drug activities and has revised its focus on two risk areas, including: 

  1. Medicare Part D Beneficiaries’ Exposures to Inappropriate Drug Pairs (NEW).  OIG will focus on determining whether Medicare Part D beneficiaries are being prescribed drugs that should not be prescribed in combination with other drugs.
  2. Medicare Part D Eligibility Verification Transactions (NEW). OIG intends to review Medicare’s eligibility verification transactions to assess the validity of the data allowing determination of beneficiary’s eligibility to the Part D program and access to Part D insurance coverage information.
  3. Part D Pharmacy Enrollment (NEW). OIG intends to review CMS’s ability to oversee Part D pharmacies and will review which pharmacies that bill for Part D drugs are enrolled in Medicare.
  4. Increase in Prices for Brand-Named Drugs under Part D (NEW). OIG will seek to evaluate the extent to which pharmacy reimbursement for brand-name drugs under Medicare Part D changed between 2010 and 2014 and compare the rate of change to the rate of inflation for the same period. 
  5. Specialty Drug Pricing and Reimbursement in Medicaid (NEW). OIG will determine how State Medicaid agencies define specialty drugs, how much States paid for specialty drugs, how States determine payment methodologies for specialty drugs, and differences in reimbursement amounts for these drugs among states. 
  6. Part B Payments for Drugs Purchased Under 340B Program (REVISED). OIG will focus on determining the financial impact on 340B covered entities, Medicare program, and Medicaid beneficiaries of three shared savings arrangements. OIG noted that policymakers have questioned whether the mandated savings from the 340B programs should be passed on to Medicare and its beneficiaries.
  7. Covered Uses for Medicare Part B Drugs (REVISED). OIG intends to review the oversight actions that CMS and its claims processing contracts take to ensure payments for Part B drugs meet the appropriate coverage criteria; and identify challenges contractors face when making drug coverage decisions.

D. Medical Equipment and Supplies Audit Activities

In 2016, the OIG will focus on four new compliance risk areas for medical equipment and supplies activities including: 

  1. Orthotic Braces-Reasonableness of Medicare Payments Compared to Amounts Paid by Other Payers (NEW). OIG will seek to determine the reasonableness of the Medicare fee schedule amounts for orthotic braces and compare the Medicare payments for orthotic braces to amounts paid by non-Medicare payers.
  2. Orthotic Braces-Supplier Compliance with Payment Requirements (NEW). OIG intends to review Medicare Part B payments for orthotic braces to determine whether durable medical equipment, prosthetics, orthotics, and supplies suppliers’ claims were medically necessary and were supported in accordance with Medicare requirements.
  3. Osteogenesis Stimulators-Lump-Sum Purchase Versus Rental (NEW). OIG seeks to determine whether potential savings can be achieved by Medicare and its beneficiaries if osteogenesis stimulators are rented over a 13 month period rather than acquired through a lump-sum purchase.
  4. Increased Billing for Ventilators (NEW). OIG will describe billing trends for ventilators, respiratory assist devices and continuous position airway pressure devices from 2011-2014 as well as examine factors associated with the increase in ventilator claims.

E. Other Provider and Suppliers Audit Activities

In 2016, the OIG will focus on six new compliance risk areas for other providers and suppliers activities including: 

  1. Ambulatory Surgical Centers- Quality Oversight (NEW). OIG intends to review Medicare’s quality oversight of ASCs.
  2. Physicians-Referring/Ordering Medicare Services and Supplies (NEW). OIG intends to focus on select Medicare services, supplies and durable medical requirements referred/ordered by physicians and non-physician practitioners to determine whether the payments were made in accordance with Medicare requirements. 
  3. Anesthesia Services-Non-Covered Services (NEW). OIG intends to review Medicare Part B claims for anesthesia services to determine whether they were supported in accordance with Medicare requirements.
  4. Physician Home Visits-Reasonableness of Services (NEW). OIG will seek to determine whether Medicare payments to physicians for evaluation and management home visits were reasonable and made in accordance with Medicare requirements.
  5. Prolonged Service-Reasonableness of Service (NEW). OIG will seek to determine whether Medicare payments to physicians for prolonged evaluation and management services were reasonable and made in accordance with Medicare requirements.
  6. Histocompatibility Laboratories-Supplier Compliance with Payment Requirements (NEW). OIG will seek to determine whether payments to histocompatibility laboratories were made in accordance with Medicare requirements.

Conclusion

As the healthcare industry continues to modify its care delivery and payment models, the 2016 Plan is a useful tool for compliance officers and legal counsel to use when deciding where to focus its internal compliance efforts for the upcoming year.