On Oct. 2, 2012, the U.S. Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) released its Work Plan for fiscal year 2013. Each year, this is of keen interest to anyone who deals with the Medicare or Medicaid programs, as it provides a sneak peek of OIG’s enforcement priorities and key areas of concern. Many investors and lenders in the industry also look to the Work Plan for guidance in understanding whether certain widespread practices are being viewed negatively by OIG.

The Work Plan summarizes OIG’s upcoming audit and enforcement priorities with respect to HHS programs. The Work Plan contains summaries of more than 240 Medicare and Medicaid initiatives (more than 80 of which are new).

The following points highlight significant aspects of the Work Plan:

  1. Fraud and Abuse Prevention. The Work Plan emphasizes OIG’s commitment to preventing fraud and abuse. The OIG makes clear that it plans to continue devoting significant resources to investigating and prosecuting Medicare and Medicaid fraud and abuse.
  2. Hospital Billing Issues. The Work Plan features a noticeable focus on hospital billing issues and payments for certain hospital services. This includes payments made to hospitals for beneficiary discharges that should have been coded as transfers, payments for same-day readmissions, payments for canceled surgical procedures and payments for mechanical ventilations.
  3. Affordable Care Act. The Work Plan includes a review of the implementation of the Affordable Care Act’s programs and initiatives as they relate to responsibilities of HHS. The Work Plan also reviews OIG’s oversight of the funding that HHS received under the American Recovery and Reinvestment Act of 2009 relating to Medicare and Medicaid incentive payments for electronic health records and health information systems and data security programs.
  4. Post-Acute Care. The Work Plan features increased scrutiny of post-acute care providers. Specifically, the Work Plan highlights OIG’s interest in examining:
    1. The frequency with which home health agencies (HHA) are complying with face-to-face encounter requirements;
    2. The frequency with which both Medicare and Medicaid have paid for the same Medicare-covered HHA services;
    3. Whether HHAs are complying with state requirements to conduct criminal background checks for HHA applicants and employees;
    4. Whether inappropriate payments were made by Medicare for interrupted stays in long-term care hospitals; and
    5. Hospices’ marketing practices and financial relationships with nursing facilities.

       5. New Areas of Focus. The Work Plan features several areas that might be surprising to those who follow the industry and current trends. The areas in which OIG has expressed an interest include:

  1. Non-hospital-owned physician practices using provider-based status;
  2. Hospital acquisition of ambulatory surgery centers (ASCs) and converting them into hospital outpatient departments;
  3. Compliance of suppliers of power mobility devices with payment requirements;
  4. Continuiance positive airway pressure supplies and reasonableness of replacement supplies;
  5. Diabetes testing supplies (including both competitive bidding practices and non-mail-order claims compliance);
  6. Payments to providers subject to existing or prior debt collection actions;
  7. Payments for personally performed anesthesia services;
  8. Drug shortage issues;
  9. Assessment and monitoring of performance by Medicare Administrative Contractors;
  10. Part D specialty formulary payments; and
  11. Dental services for children under Medicaid, including inappropriate billing and for-profit dental chains.

Over the next few weeks, McGuireWoods will publish a series of articles on various focus areas and new initiatives identified in the Work Plan