Recently, the Office of Inspector General (OIG) of the United States Department of Health and Human Services (HHS) issued its Work Plan for Fiscal Year 2010 (“2010 Work Plan”).1 The 2010 Work Plan outlines the areas of special concern to the OIG and describes those enforcement initiatives the OIG will pursue in FY 2010 in connection with its oversight of the Centers for Medicare & Medicaid Services (CMS) and other agencies of HHS. Accordingly, health care suppliers and providers should be aware of these areas and initiatives in planning their business strategies and compliance efforts for the year.
The 2010 Work Plan includes several new themes in addition to the areas that historically have been of concern to the OIG. In particular, the 2010 Work Plan includes planned reviews relating to the American Recovery and Reinvestment Act of 2009 (ARRA). Under the Recovery Act Work Plan, the OIG’s reviews will include, among other things, the following:
- Breach Notification and Medical Identity Theft Relating to Medicare Beneficiaries. The OIG will review CMS’ compliance with the new breach notification requirements set forth in ARRA, as well as CMS’ oversight measures in medical identity theft cases.
- Medicare and Medicaid Incentive Payments for Electronic Health Records. The OIG plans to review incentive payments to eligible health care professionals and hospitals for the adoption of electronic health records, as well as CMS’ actions to identify and remedy payments made in error. ARRA provides incentive payments to physicians and hospitals demonstrating meaningful use of electronic health record technology.
- Medicaid Disproportionate Share Payments. ARRA provides additional disproportionate share hospital (DSH) allotments for fiscal years 2009 and 2010. The OIG will review these payments to states in order to determine expenditures claimed in accordance with Medicaid requirements.
- State Use of Increased ARRA Funding. The OIG will review how states use their increased federal medical assistance percentages funding as provided for under section 5001(f)(3) of ARRA.
- Medicaid High-Risk Providers. The OIG will review claims from certain provider types that demonstrate a high risk of improper Medicaid payment claims.
The OIG will continue to monitor significant improper payments and problems in specific parts of the Medicare program. The OIG has indicated that it will pursue audits and evaluations focusing on a number of areas, including conditions present on patient admissions, adverse events, payments for nonphysician outpatient services, quality of care provided in skilled nursing facilities, home health payments, incentive payments for e-prescribing, disproportionate share hospital payments, and physician referrals to DME suppliers and other providers.
Major Issues Covered in the 2010 Work Plan
The 2010 Work Plan covers a broad array of projects related to CMS programs, organized by type of provider and by federal reimbursement scheme. Further highlights of the 2010 Work Plan include the following:
- Provider-Based Status for Inpatient and Outpatient Facilities. The OIG will review cost reports of hospitals claiming provider-based status to determine the appropriateness of the designation and the potential impact on the Medicare program and its beneficiaries when hospitals improperly claim the status for inpatient or outpatient facilities.
- Hospital Payments for Nonphysician Outpatient Services Under the Inpatient Prospective Payment System. The OIG will review the appropriateness of payments for nonphysician outpatient services provided shortly before or during a beneficiary’s Medicare Part A-covered stay at acute care hospitals. The OIG had previously identified significant numbers of improper claims for these services.
- Critical Access Hospitals. The OIG will continue to review payments made to critical access hospitals to determine whether those receiving payments meet the critical access hospital designation set forth in the Social Security Act and Medicare conditions of participation.
- Medicare Disproportionate Share (DSH) Payments. The OIG will review Medicare DSH payments made to hospitals to evaluate whether payments are made in accordance with Medicare methodology. A review will also be conducted to review the total amounts of uncompensated care costs incurred by hospitals.
- Medicare Secondary Payer. The OIG will review Medicare payments made to beneficiaries who have other insurance in order to ensure compliance with the Medicare Secondary Payer Rule.
- Hospital Admissions With Conditions Coded Present-on-Admission. The OIG will review Medicare claims to determine the number of inpatient admissions for which certain diagnoses were coded as being present on admission (POA) and which types of diagnoses were more frequently coded as POA. The OIG will also evaluate claims to determine which types of facilities frequently transfer patients with a POA diagnosis and whether specific providers transfer a high number of POA-diagnosed patients to other facilities.
- Observation Services During Outpatient Visits. The OIG will review payments made for observation services provided during outpatient visits to hospitals, to assess whether a hospital’s use of observation services affects the care received by Medicare beneficiaries and their ability to pay out-of-pocket health care expenses.
Home Health Agencies
- Part B Payments for Home Health Beneficiaries. The OIG will review and evaluate the appropriateness of Medicare Part B payments made for services and medical supplies provided to beneficiaries during home health episodes.
- Medicare Home Health Payments for Insulin Injections. The OIG will start to review home health outlier payments made for insulin injections administered as a skilled nursing service under the Medicare home health benefit. The OIG will also examine billing patterns to determine geographic areas with high rates of home health visits for insulin injections.
- Part B Services in Nursing Homes: Mental Health Needs and Psychotherapy Services. The OIG will evaluate Part B payments made for psychotherapy services provided to residents during noncovered Medicare Part A skilled nursing facility stays, to determine the medical necessity of the services, appropriateness of coding and adequacy of documentation.
- Medicare Requirements for Quality of Care in Skilled Nursing Facilities. The OIG will assess how skilled nursing facilities (SNFs) have addressed Federal quality of care requirements by evaluating whether SNFs have (1) developed plans of care based on assessments of beneficiaries, (2) provided services to beneficiaries in accordance with these plans of care and (3) planned for beneficiaries’ discharges. The OIG will evaluate SNF use of the standardized Resident Assessment Instrument (RAI) in developing residents’ plans of care.
- Criminal Background Checks for Nursing Facility Employees. The OIG will examine whether and to what extent nursing facilities have employed individuals with criminal convictions. Federal law prohibits long term care facilities from employing individuals found guilty of abusing, neglecting or mistreating residents.
- Part B Services in Nursing Homes. The OIG will review the scope of Part B services provided to residents whose stays are not paid for under Medicare’s Part A SNF benefit, to determine billing patterns among nursing homes and providers.
Other Part A and Part B Providers
- Medicare Incentive Payments for E-Prescribing. The OIG will review Medicare incentive payments made to eligible health care professionals in 2010 for their 2009 electronic prescribing activities. Incentive payments for e-prescribing begin in 2010 and will continue to 2013. During its review, the OIG will assess whether incentive payments for 2009 activities were made in error. According the OIG, this review will lay the foundation for future reviews of the integrity of payments authorized by ARRA, including incentive payments to providers for implementation of electronic health records.
- Ambulatory Surgical Center Payment System. The OIG will evaluate the appropriateness of ambulatory surgical center (ASC) payment rate methodology under the revised ASC payment system.
- Medicare Payments for Part B Imaging Services. The OIG will start a review of Medicare payments made for Part B imaging services to determine whether the payments reflect actual expenses incurred and whether utilization rates reflect current industry practices.
- Geographic Areas with a High Density of Independent Diagnostic Testing Facilities (IDTF). The OIG will evaluate services profiles, provider profiles and billing patterns in areas with high concentrations of IDTFs.
- Enrollment Standards for Independent Diagnostic Testing Facilities. The OIG also will start a review of Medicare enrolled IDTFs to determine whether they meet Medicare’s 14 IDTF enrollment standards.
- Physician Reassignment of Benefits. The OIG will continue to evaluate the reassignment of benefits by Medicare-enrolled physicians to other entities.
Durable Medical Equipment and Supplies
- Physician Self-Referral for Durable Medical Equipment Services. The OIG will begin review of Medicare payments for DME services to determine the permissibility of physician self-referrals to DME suppliers in which physicians held ownership interests.
Medicare Part A and Part B Contractor Operations
- Medicare Summary Notice. The OIG plans to begin a review of beneficiaries’ use and understanding of Medicare Summary Notices (MSN). MSNs are used to advise beneficiaries of paid claims for health care services and supplies.
- Quality Improvement Organizations’ Beneficiary Complaint Process. The OIG will start a review of the degree to which Quality Improvement Organizations (QIOs) notify Medicare beneficiaries of the final outcomes of their quality-of-care complaints.
- Accuracy and Completeness of National Provider Identifier (NPI). The OIG will review accuracy and completeness of the NPI registry and determine whether providers are including NPIs on their claims.
- Competitive Bidding Program: Supplier Influence on Physician Prescribing. The OIG will evaluate DME claims to assess whether suppliers participating in the competitive bidding program are soliciting physicians to prescribe certain brands or modes of delivery of covered items that are more profitable to suppliers.
Medicare Advantage (Medicare Part C)
- Enhanced Payments for Certain Beneficiary Types. The OIG will review the suitability of Medicare Part C reimbursement for beneficiaries classified as institutionalized, ESRD or Medicaid eligible. Under the Social Security Act, CMS adjusts payments to Medicare Advantage organizations for risk factors, including disability status, institutional status and other appropriate factors.
Medicare Part D Prescription Drug Program
- Duplicate Medicare Part A and Part B Claims Included With Part D Claims. The OIG will review submitted Medicare Part D claims to determine whether they were duplicated under Medicare Part A or Part B. Under federal law, a drug prescribed under Part D will not be considered for payment if the drug was prescribed, dispensed or administered under Part A or Part B.
- True Out-of-Pocket Costs for Part D. The OIG will review the tracking of beneficiaries’ true out-ofpocket (TrOOP) costs by Part D sponsors, to determine the appropriateness of adjustments to pharmacy Part D prescription claims.
- E-Prescribing in Part D. The OIG will evaluate whether Part D sponsors have adopted CMS’ e-prescribing standards. The technical standards for e-prescribing are found at 42 C.F.R. § 423.160.
- Part D Drug Claims with Inactive or Invalid Physician Identifier Numbers. The OIG will start reviewing Part D prescription records in order to identify claims being billed and paid using inactive or invalid unique physician identifier numbers, NPIs and provider identifiers.
- State Medicaid Agency Policies to Deny Payments for Hospital-Acquired Conditions. The OIG will begin a review of state Medicaid program policies relating to adverse events, including events designated in CMS’ list of hospital-acquired conditions, to determine potential impact on the Medicaid program and its beneficiaries. In 2008, CMS issued guidance encouraging state Medicaid programs to establish payment policies regarding adverse events.
- Transparency Within Nursing Facility Ownership. The OIG will evaluate the ownership structures of investor-owned nursing homes. Prior OIG studies have found that determining the entity legally liable for patient care is often difficult because of the ownership structure. The OIG will evaluate the effects of different types of ownership changes on the care received by nursing home beneficiaries.
- Medicaid Home Health Agency Claims. The OIG will review home health agency claims to find whether providers meet criteria to provide services and whether beneficiaries meet eligibility requirements as required under 42 C.F.R. § 440.70 and 42 C.F.R. Part 484.
- Calculation of Average Manufacturer Prices. The OIG will review selected drug manufacturers to evaluate whether the methodologies used to calculate their average manufacturer price, best prices for the Medicaid drug rebate program and Medicare drug reimbursement are consistent with applicable statutes, regulations, manufacturers’ rebate agreements and CMS’ Drug Manufacturer Releases.
- Medicaid Payments for Drugs Not Approved for Use by Children. The OIG will review paid Medicaid claims to determine if payments were made for drugs that are not approved for children by the FDA.
- Medical Services for Undocumented Aliens. The Social Security Act provides that states may claim federal funds for medical services provided to undocumented aliens necessary to treat an emergency condition. The OIG will review Medicaid payments to determine if states appropriately claimed federal funds for allowed medical services rendered to undocumented aliens.
The above represents just a sampling of major OIG initiatives for FY 2010 as found in the 2010 Work Plan. The 2010 Work Plan is extensive and touches on numerous issues of concern to the OIG. Health care providers and suppliers should pay close attention to those items outlined in the 2010 Work Plan, and seek to update their compliance programs to ensure that they address the issues of particular concern to the OIG. If gaps are detected in a provider’s compliance program, it may be necessary to develop additional training for personnel. A careful review of the 2010 Work Plan should be undertaken in conjunction with an annual monitoring of each provider’s compliance program.