OIG Sets Enforcement Priorities for 2014

Mar 10, 2014 at 02:32 pm by steve

On January 31, the Office of Inspector General (“OIG”) for the Department of Health and Human Services released its Work Plan for Fiscal Year 2014. The Work Plan provides important insights into OIG’s audit and enforcement priorities for the coming year and, as such, is a must read for health care providers that want to avoid compliance issues.

The OIG’s emphasis on reducing healthcare fraud, waste and abuse cannot be understated. For FY 2013, OIG reported recoveries of more than $5.8 billion in audit and investigative receivables. OIG also reported exclusions of over 3,214 individuals and entities from participation in Federal health care programs; 960 criminal actions against individuals or entities; and 472 civil actions, which include false claims and unjust-enrichment lawsuits, civil monetary penalties settlements, and administrative recoveries related to provider self-disclosure. The recoveries and criminal and civil actions arose, in substantial part, from topics covered in the OIG’s FY 2013 Work Plan.

Several areas of review in the FY 2013 Work Plan will continue to be evaluated in FY 2014. Continuing topics for hospitals include: Medicare payments for inpatient hospital claims that require mechanical ventilation, outlier payments, hospital participation in quality improvement projects, and graduate medical education payments. Continuing topics for physicians include noncompliance with assignment rules and place of service coding errors. OIG will also continue to use computer matching and data mining techniques to select hospitals for focused review of claims that may be at higher risk for overpayments.

For FY 2014, the Work Plan includes several new areas of focus for Hospitals, which OIG will be examining for the first time:

Outpatient Evaluation and Management Services Billed at the New-Patient Rate: OIG will review Medicare outpatient hospital payments for evaluation and management services rendered for clinic visits and billed at the new rates for new and established patients to determine whether the payments were appropriate. According to Federal regulations, the meaning of “new” and “established’ pertains to whether the patient has been seen as a registered inpatient or outpatient of the hospital within the past 3 years.

New Inpatient Admission Criteria: Beginning in FY 2014, new regulations state that physicians should admit for inpatient care only those beneficiaries who are expected to need at least two nights of hospital care. OIG plans to study the impact of these new inpatient admission criteria on hospital billing and take audit action as necessary.

Oversight of Hospital Privileging: OIG will review hospital privileging programs to ensure medical staff candidates are properly evaluated prior to granting initial privileges. This includes hospitals’ verification of credentials and review of the National Practitioner Databank.

Executive Compensation Benchmark/Limits: OIG will review salaries charged to Medicare to determine whether the required senior executive compensation benchmark is applied. OIG will also determine whether applying said benchmark to all employees would result in additional savings to the Medicare program. Additionally, OIG plans to review data from Medicare cost reports to determine whether executive compensation that can be submitted to Medicare for reimbursement should be limited.

Nationwide Review of Cardiac Catheterization and Heart Biopsies: OIG will review whether hospitals complied with Medicare billing requirements when submitting reimbursement requests for right heart catheterizations and heart biopsies performed during the same operative session.

Indirect Medical Education Payments: OIG will review provider data to determine whether hospitals’ indirect medical education payments were made in accordance with Federal regulations and guidelines.

New focus areas for physicians set forth in the 2014 Work Plan include reviewing Medicare Part B payments and/or other billings for chiropractic services to determine whether payments were proper. With respect to durable medical equipment suppliers, the Work Plan states that OIG will be reviewing Medicare payments for the transportation and setup of portable x-ray equipment, power mobility devices, nebulizer machines, and lower leg prosthetics to determine whether regulatory requirements for payment are satisfied.

The 2014 Work Plan also contains several provisions relating to managed care organizations. Notably, the 2014 Work Plan calls for OIG to review states’ managed care plan reimbursements to determine whether managed care organizations are appropriately and correctly reimbursed for services provided. This includes verification that payments made under a risk-sharing mechanism and incentive payments made to MCOs are within the limits set forth in Federal regulations.

OIG will also be conducting several reviews relating to the Affordable Care Act Health Insurance Exchanges. OIG has prioritized four key areas for FY 2014: payment accuracy; eligibility systems; contracts; and security of data and consumer information. As part of this review, for example, OIG will be assessing the effectiveness of HHS’ internal controls to pay Advanced Premium Tax Credit and Cost Sharing Reduction subsidy amounts in accordance with federal requirements.

These topics are key areas on which OIG will be focusing its fraud and enforcement efforts in the coming year. The OIG Work Plan is a great tool for health care providers, compliance officers and administrators who want to avoid compliance issues. The FY 2014 Work Plan is available for download on the OIG website.

Dan M. Silverboard and Christopher L. Wansley are associates with Balch & Bingham.

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