A Health Care Regulatory & Compliance E-Alert

On October 7, 2010 the Department of Health and Human Services, Office of Inspector General (OIG) posted its 2011 Work Plan. The OIG’s Work Plan sets forth the initiatives and priorities of the OIG for the 2011 federal fiscal year, which the OIG will pursue through audits, investigations, inspections, industry guidance (including advisory opinions), and enforcement actions (including actions to impose civil monetary penalties, assessments, and administrative sanctions, such as exclusions). Some of the key OIG audits and inspections scheduled to begin in 2011 that will affect hospitals, physicians and other healthcare practitioners, nursing homes and Medicaid managed care organizations include:

Key Hospital Initiatives

Payments for Nonphysician Outpatient Services Review the appropriateness of payments for nonphysician outpatient services that were provided to beneficiaries shortly before Medicare Part A-covered stays at non-IPPS hospitals.

Medicare Outlier Payments. Review Medicare outlier payments to determine whether the Centers for Medicare and Medicaid Services (CMS) appropriately reconciled the payments.

Hospital Occupational Mix Data Used to Calculate Inpatient Hospital Wage Indexes. Determine whether hospitals reported occupational-mix data used to calculate inpatient wage indexes in compliance with Medicare regulations and what effect inaccurate reporting of occupational-mix data has on the wage index.

Medicare Secondary Payer/Other Insurance Coverage Review Medicare payments for beneficiaries who have other insurance to assess the effectiveness of procedures in preventing inappropriate Medicare payments for beneficiaries with other insurance coverage.

Hospital Reporting for Restraint- and Seclusion-Related Deaths Review hospital-reported restraint- and seclusion-related deaths to determine the volume of reports and their outcome. The OIG will also determine the outcome of State investigations of restraint and seclusion deaths and the action the State agencies took against the hospitals.

Hospitals’ Compliance With Medical Conditions of Participation for IMRT and IGRT Services. Review hospitals’ compliance with Medicare requirements concerning the safety and quality of intensity-modulated radiation therapy (IMRT) and image-guided radiation therapy (IGRT) services. The OIG will also assess CMS’s oversight of IMRT and IGRT services provided in hospitals.

Reliability of Hospital-Reported Quality Data. Review hospitals’ control for ensuring the accuracy of data related to quality of care they submit to CMS.

Observation Services During Outpatient Visits. Review Medicare payments for observation services provided during outpatient visits and asses whether and to what extent hospitals’ use of observation services affects the care the beneficiaries receive and their ability to pay out of pocket expenses.

Key Initiatives for Physicians and Other Health Care Practitioners

Partial Hospitalization Program Services. Review the appropriateness of Medicare payments for partial hospitalization program (PHP) psychiatric services. The OIG will determine whether Medicare payments for PHP psychiatric services in hospital outpatient departments and freestanding community mental health centers met Medicare requirements based on documentation supporting psychiatric services, including patient plans of care, and physician supervision and certification requirements.

Excessive Payments for Diagnostic Tests. Review Medicare payments for high-cost diagnostic tests to determine whether they were medically necessary. The OIG will also determine the extent to which the same diagnostic tests are ordered for a beneficiary by primary care physicians and physician specialists for the same treatment.

Laboratory Test Unbundling by Clinical Laboratories. Review the extent to which clinical laboratories have inappropriately unbundled laboratory profile or panel tests to maximize Medicare payments. The OIG will determine whether clinical laboratories have unbundled profile or panel tests by submitting claims for multiple dates of service or by drawing specimens on sequential days. The OIG will also determine the extent to which the Medicare carriers have controls in place to detect and prevent inappropriate payments for laboratory tests.

Medicare Part B Payments for Glycated Hemoglobin A1C Tests. Review Medicare contractors’ procedures for screening the frequency of clinical laboratory claims for glycated hemoglobin A1C tests since Medicare policy states that it is generally not reasonable and necessary to perform such tests more often than once every three months on a controlled diabetes.

Trends in Laboratory Utilization. Review trends in laboratory utilization under the Medicare program by examining the types of laboratory tests and the number of laboratory tests ordered. The OIG will also examine how physician specialty, diagnosis, and geographic difference in the practice of medicine affect laboratory test ordering.

Lab Test Payments: Comparison of Medicare with Other Public Payers. Review the extent to which Medicare payment rates for laboratory tests vary from other public payors. The OIG will compare Medicare laboratory payment rates for the 10 most utilized lab tests with those of other public payors, including the Department of Veterans Affairs and State Medicaid programs.

Medicare Billings with Modifier GY. Review the appropriateness of providers’ use of modifier GY on claims for services that are not covered by Medicare. The OIG will also examine patterns and trends for physicians’ and suppliers’ use of modifier GY.

Payments for ESRD Beneficiaries Entitled to Medicare Under Special Provisions. Review claims for end state renal disease (ESRD) beneficiaries entitled to Medicare coverage only because of special circumstances. The OIG will determine the extent to which beneficiaries who are eligible for Medicare benefits because of special provisions continue to obtain Medicare benefits after their coverage should have ended.

Error-Prone Providers: Medicare Part A and Part B. Review Medicare Part A and Part B claims submitted by error-prone providers. The OIG will select the top error-prone providers based on expected dollar error amounts and match selected providers against the National Claims History file to determine the total dollar amount of claims paid. The OIG will then conduct a medical review on a sample of claims to determine their validity, project their results to each provider’s population of claims, and request refunds on projected overpayments.

Comprehensive Error Rate Testing Program: FY 2010 Error Rate Oversight. Review review certain aspects of the Comprehensive Error Rate Testing (CERT) Program to evaluate CMS’s efforts to ensure the accuracy of the FY 2010 error rate and to reduce improper payments.

Home Health PPS Controls. Review compliance with home health agency PPS rules, including billing for the appropriate place of service and analyze trends in home health agency activities, including the number of claims submitted to Medicare, the number of visits provided to beneficiaries, arrangements with other facilities, and ownership information.

Medicare Payments for Part B Imaging Services. The OIG will focus on the “practice expense” component of the physician fee schedule to determine, for selected imaging services, whether Medicare payments reflect expenses incurred and whether utilization rates reflect industry practices.

Frequency of Replacement of Supplies for Durable Medical Equipment. Review the compliance of DMEPOS suppliers with Medicare requirements for frequently replaced supplies. Medicare rules require that the order or certificate of medical necessity must state the type of supplies needed and the frequency with which they must be replaced. Medicare rules also require that a beneficiary or beneficiary caregiver specifically request refills of repetitive services or supplies before a supplier dispenses them; a supplier may not initiate a refill or automatically dispense a quantity of supplies on a predetermined regular basis. The OIG’s preliminary work showed suppliers automatically shipped CPAP and respiratory-assist device supplies when no physician order was in effect. The OIG will select a sample of frequently replaced supplies to determine whether payments to DME suppliers met Medicare requirements.

Medicare Pricing for Parenteral Nutrition. Review of the Medicare fee schedule for parenteral nutrition compared with fees paid by other sources of reimbursement.

Rehabilitative Services . Review Medicaid claims for rehabilitative services to determine whether the services were provided in accordance with federal and State guidelines.

Medicaid Medical Equipment. Review Medicaid payments for medical supplies and equipment to determine whether they were properly authorized by physicians, the products were received by beneficiaries, and amounts paid were within Medicaid payment guidelines.

Medicaid Hospice Services. Review Medicaid payments for hospice services to determine whether the services were provided in accordance with federal and State reimbursement requirements and were reasonable and necessary.

Medicaid Adult Day Care Services. Review Medicaid payments to providers of adult day care services to determine whether the payments were in compliance with federal and State requirements.

Key Nursing Home Initiatives

Oversight of Poorly Performing Nursing Homes. Review of CMS’s and States’ use of enforcement measures to determine the effect on the quality of care beneficiaries receive in poorly performing nursing homes.

Hospitalization of Nursing Home Residents. Review the extent of hospitalizations of Medicare beneficiaries residing in nursing homes. The OIG will also assess CMS’s oversight of nursing homes whose residents have high rates of hospitalization.

CMS Oversight of Accuracy of Nursing Home Minimum Data. Review CMS’s oversight of Minimum Data Set (MDS) data submitted by nursing homes certified to participate in Medicare or Medicaid. The OIG will also review CMS’s processes for ensuring that nursing homes submit accurate and complete MDS data.

Transparency Within Nursing Facility Ownership. Review ownership structures at investor-owned nursing homes. The OIG will determine which investor-owned entities are benefiting from Medicaid reimbursement and study the effects of ownership changes in the care received by beneficiaries.

States’ Administration and Use of Civil Monetary Penalty Funds in Medicaid Nursing Homes. Examine how States administer and use civil monetary penalties (CMP) imposed on nursing homes that fail to meet Medicare and Medicaid health and safety requirements.

Key Medicaid Managed Care Initiatives

State Agency Oversight of Medicaid Managed Care Entities’ Marketing Practices. Review State Medicaid agency oversight policies, procedures and activities to determine the extent to which States monitor Medicaid managed care entities’ marketing practices and compliance with State and federal contractual marketing requirements.

Use of Prepayment Review to Detect and Deter Fraud and Abuse in Medicaid Managed Care . Review the extent to which Medicaid Managed Care Organizations (MCOs) use prepayment reviews to detect and deter fraud and abuse. The OIG will also examine the results of prepayment reviews, challenges the MCOs addressed in developing and implementing such programs, and lessons learned by MCOs about them.

State Agency Oversight of Medical Loss Ratio Experience Adjustment. Review the accuracy of experience adjustment reports provided by managed care plans to State agencies under Title XIX and Title XXI. The OIG will review State Agencies’ oversight and validation of experience adjustment reports and assess whether managed care plans accurately reported medical costs and properly adjusted when the medical loss ratio thresholds were not met.

Medicaid Managed Care Payments for Deceased Beneficiaries. Review capitation payments that States make to MCOs for deceased beneficiaries. The OIG will also review States’ and CMS’s oversight of capitated payments to determine the accuracy of payments subsequent to enrollees’ deaths.

Key Recovery Act Initiatives

Medicaid Disproportionate Share Hospital Payments. New DSH payments to determine whether the expenditures claimed met Medicaid requirements.

Medicare and Medicaid Incentive Payments for Electronic Health Records. Rreview of Medicare and Medicaid incentive payments to eligible health care professionals and hospitals for adopting electronic health records (EHRs) and CMS safeguards to prevent erroneous incentive payments (for example, for those not meeting “meaningful use” criteria).