On Jan. 31, 2014, the Office of Inspector General (“OIG”) of the United States Department of Health and Human Services (“HHS”) released its Fiscal Year 2014 Work Plan (the “2014 Work Plan”). The 2014 Work Plan highlights areas that are the current focus of enforcement initiatives to prevent fraud, waste and abuse of HHS programs.  Set forth below are the “NEW” areas identified by OIG that we find noteworthy:

HOSPITALS 

  • NEW INPATIENT ADMISSION CRITERIA. OIG announced that it intends to study the impact of its two (2)–nights inpatient admission criteria on billing, Medicare payments and beneficiary payments.  
  • SALARY ANALYSIS. A new area of focus is the impact of salaries included in operating costs and the possible effect of the imposition of limits on the amount included in cost reports. A similar study is also taking place with respect to compensation for various Medicare contractors. OIG may determine to set limits on compensation permitted in cost reports in lieu of the current practice where providers are instructed not to include anything more than what is a reasonable amount of remuneration in such reports.
  • COMPENSATION OF PROVIDER-BASED AND FREE-STANDING CLINICS. OIG is evaluating the differences in payments for physician office visits between provider-based clinics and free-standing clinics for similar procedures. The focus is on the propriety of hospitals claiming provider-based status for these free-standing clinics and receiving higher reimbursement for certain of these services.  
  • BILLING OF OUTPATIENT EVALUATION AND MANAGEMENT SERVICES. OIG announced that it intends to review the characterization of patients receiving evaluation and management services in an outpatient setting as “new” patients instead of “established” patients. Billing these patients as new is not proper, per the 2014 Work Plan, if the patient has been seen as a registered inpatient or outpatient of the hospital within the past three (3) years.  
  • REVIEW OF CARDIAC CATHETERIZATION AND HEART BIOPSIES. OIG will review all Medicare payments for right heart catheterizations (RHC) and heart biopsies that were billed during the same operative sessions. OIG identifies the payment for RHC procedures when payments for heart biopsies were already made as an improper practice.
  • KWASHIORKOR DIAGNOSIS. OIG will review whether the diagnosis of a patient with Kwashiorkor is adequately supported by documentation. This form of malnutrition is rare in the United States and has been identified as an area of abuse deserving of heightened review.  
  • PAYMENTS FOR BONE MARROW OR STEM CELL TRANSPLANTS. OIG will review Medicare payments for these transplantations, as coverage is limited to specific diagnoses. To support claims for these transplantations, the procedure codes must be accompanied by diagnosis codes that meet the specified coverage criteria.  
  • INDIRECT MEDICAL EDUCATION (IME) PAYMENTS. In order to curb excess reimbursement for IME costs, OIG has announced it will review teaching hospitals calculation of IME adjustments to confirm such calculation uses the hospital’s ratio of resident full time equivalents to available beds.  
  • QUALITY OF PATIENT CARE AND SAFETY. Two new areas of emphasis announced by OIG are: (a) pharmaceutical compounding by hospitals and (b) hospital privileging, including assessment of the process of verification of credentials and review of National Practice Databanks.  
  • PAYMENTS UNDER 340B PROGRAM. OIG announced its intention to assess the possibility of reducing Medicare Part B spending by defining a way for Medicare to share in the savings for 340B purchased drugs (i.e., the increment between the average sales price-based payments made to covered entities by CMS and the 340B prices paid by covered entities). Shared benefit methodologies may be forthcoming from this assessment.  
  • NETWORKED MEDICAL DEVICES - INFORMATION TECHNOLOGY SECURITY. OIG announced its concern that hospitals do not have sufficient controls over the protection of electronically protected health information (ePHI) in relation to various networked medical devices (such as dialysis machines, radiology systems and medication dispensing systems that are integrated with electronic medical records and the larger health network). Hospitals need to review the Manufacturer Disclosure Statement for Medical Device Security (MDS2) forms to access any vulnerabilities and risks associated with ePHI that is transmitted or maintained by a medical device and take proactive steps to secure any such ePHI.

NURSING HOMES

  • BILLING FOR MEDICARE PART A STAYS. OIG has found inappropriate billing for therapy at the highest levels notwithstanding largely unchanged beneficiary characteristics. OIB also found improper billing of approximately one-quarter of all 2009 Claims for Part A Services. OIG intends to look for compliance with CMS’s substantial changes in how SNFs bill for services for Medicare Part A stays.

HOSPICES

  • SERVICES TO ALF RESIDENTS. OIG announced its intent to review the extent to which hospices serve Medicare beneficiaries who reside in assisted living facilities. The concern noted is that the longest lengths of stay in hospices are associated with assisted living residents.

AMBULANCE SERVICES

  • PORTFOLIO REPORT ON MEDICARE PART B PAYMENTS. OIG intends to issue a portfolio that analyzes and synthesizes the OIG evaluations, audits, investigations and compliance guidance for ground ambulance/transport services. The portfolio will identify vulnerabilities, inefficiencies and fraud trends detected and make recommendations for improvement.

CAUTIONARY NOTE

  • IDLE MEDICARE PROVIDERS. Any Medicare providers who have not submitted claims in the past 12 months run the risk that their billing privileges with Medicare will be deactivated. Providers enrolled solely to refer items or services for beneficiaries are exempted from the deactivation process.