The Office of Inspector General (“OIG”) has released its 2010 Work Plan, which identifies issues and projects the OIG intends to target in the 2010 fiscal year.

The Work Plan sets forth 21 initiatives specifically related to hospitals, and several other focus areas which may impact hospitals and systems, including ambulatory and physician services, nursing homes, home health, laboratory services, DME and prescription drugs.

Although many of the topics contained in the 2010 Work Plan have been the focus of OIG in previous years, several new areas of concern may directly impact hospitals, including the following:

Hospital Payments for Non-Physician Outpatient Services: The OIG will review the appropriateness of payments made for non-physician outpatient services that were provided shortly before or during a beneficiary’s hospital stay covered under Part A.

Present-on-Admission Conditions: The OIG will review claims to determine the number of hospital admissions for which certain diagnoses were coded as present on admission (POA), the types of facilities that most frequently transfer patients with a POA diagnosis to hospitals, and whether specific providers transferred a high number of patients with POA diagnoses to hospital.

Hospital Readmissions: Claims will be reviewed to determine trends in readmissions, and the effectiveness of the claims processing edit that denies payments for “same-day re-admission” related to prior symptoms or prior medical conditions.

Adverse Events: The OIG will conduct reviews related to adverse events, including estimating the national incidence of such events and examining identification methods. The OIG will also evaluate processes for identifying hospital-acquired conditions and study policies and procedures for disclosing adverse event information to the public.

Compliance with Assignment Rules: The OIG will examine provider compliance with assignment rules and determine whether beneficiaries are inappropriately billed in excess of Medicare-allowed amounts.

Services Ordered or Referred by Excluded Providers: The OIG will review payments made for services ordered or referred by excluded providers and evaluate methods of detecting gaps in monitoring “secondary” providers. Secondary providers are not required to enroll with Medicare and currently no system exists to monitor their exclusion.

Skilled Nursing Quality and Employment: The OIG will examine the extent to which nursing facilities conduct background checks for employment. It will also review quality compliance with plans of care and hospital admissions due to substandard quality.

Physician Self-Referral for DME Services: The OIG will review DME service payments to determine whether such payments are allowed when physicians refer to DME suppliers in which the physician holds an ownership interest.

Health Information Data Privacy: The OIG will review whether HIPAA “covered entities” are in compliance with the requirements and standards of the Privacy Rule which protects individually identifiable health information.

Recovery Act Work Plan: The OIG simultaneously issued a separate Work Plan for issues related to the American Recovery and Reinvestment Act of 2009. The scope of the Recovery Act Work Plan includes: (i) identifying providers that have a high-risk of claiming improper Medicaid payments, and (ii) reviewing allegations of retaliation against whistleblowers by entities receiving Recovery Act funds.

Recommended Compliance Actions

The 2010 Work Plan provides an opportunity to update your hospital’s compliance program to address new issues of focus of the OIG. Therefore, we recommend that hospitals consider the following actions:

Compliance Committee. Organize a meeting of your hospital’s compliance committee to discuss the 2010 Work Plan with emphasis on new areas of OIG concern that your hospital has not yet reviewed. Document these efforts by keeping written minutes of the meeting.

Audits. Initiate internal and/or external audits to evaluate your hospital’s compliance with certain OIG focus areas (especially those areas that your hospital has not recently audited). Document these efforts thoroughly by preparing a written summary of the methodology and results of such audits, including any corrective actions taken.

Risk Areas. If your compliance program identifies risk or audit areas, amend it to add new risk areas reflected in the 2010 Work Plan.

Disseminate to Management. Send copies of the 2010 Work Plan to all members of your hospital’s management and board, along with a memo explaining its significance, or send selected segments of the Work Plan to hospital managers based on each manager’s job duties and responsibilities. Maintain a copy of all materials distributed.

In-Service Hospital Personnel. Conduct seminars for hospital personnel regarding focus areas in the Work Plan that are applicable to their departments and services. Document all such efforts.

Educate Physicians. Distribute copies of the 2010 Work Plan, or those portions relevant to physicians, to all medical staff physicians along with a memo explaining its significance; or offer a seminar for physicians focusing on those areas of the Work Plan that concern physicians and their practices. Document all such efforts and retain copies of all communications.

Compliance Training. Amend your hospital’s annual compliance training to include references to the 2010 Work Plan. Highlight those OIG focus areas that are of particular importance to your hospital, and document all such changes.