OIG 2008 Work Plan Released

Each year the Department of Health and Human Services ("HHS"), Office of Inspector General ("OIG") publishes its "Work Plan" for the upcoming fiscal year. The Work Plan is part of the agency's comprehensive planning process to identify areas most worthy of attention for purposes of conducting audits and investigations, coordinating and recommending policies and preventing/detecting fraud and abuse.

The Work Plan focuses on a number of sectors covered by the Medicare program, including, but not limited to hospital issues, home health, nursing home, hospice care, physician and other health professionals, DME and supplies, prescription drugs, Medicare Advantage and a variety of Medicaid oriented areas. Providers should be acutely aware of these issues, as we have had any number of clients that have received inquiries from CMS and the OIG with respect to many of these issues.

The following is a sampling of the areas identified in the OIG's Work Plan for fiscal year 2008 which we believe are worth noting.

"Incident To" Services.

For a number of years now, the annual Work Plans have focused on various aspects of the "incident to" provisions. The OIG has once again made clear its intention to review claims for services furnished "incident to" the services of various physician specialties. In particular and in the 2008 Work Plan, the OIG indicated that it will examine the qualifications and appropriateness of the staff that performs such services, as well as the medical necessity, documentation and quality of care for such services.

Surgeons and ASCs.

The Work Plan contains a number of physician-focused projects, two of which involve surgeons. Medicare pays physicians a higher amount for non-facility based services, such as those performed in the office or (with certain exceptions) in Ambulatory Surgery Centers. The OIG has indicated that it will review physician coding for the place of service for ASC and hospital outpatient surgery procedures to determine whether physicians properly identified the location of service. We have already had several clients receive information requests from the OIG as it relates to this particular issue.

The OIG will also review industry practices in the number of E&M services provided as part of global surgery fees. Ordinarily, global surgery billing requires that the physician bill a single fee for all services associated with a particular procedure and related E&M services. Since the global surgery fee concept was developed in 1992, the OIG believes it is appropriate to determine whether industry practices have changed over time. The OIG will also review the methodology for setting ASC payments. Under the Medicare Modernization Act, HHS is required to implement a revised payment system for ASCs by January 1, 2008. As such, OIG will examine changes to the ASC payment system and the rate-setting method to calculate rates.

NOTE: Physicians are well advised to pay close attention to the place of service codes used in connection with the billing of operative procedures to ensure the place of service is properly identified.

IDFTs, Ultraound and Relationships with MRI Providers.

The OIG is particularly interested in financial relationships among parties that provide MRI services and whether such relationships are associated with high use of services. Review will include the arrangements under which MRI services are provided and the various relationships which affect utilization levels. The OIG is also interested in reviewing the services and billing patterns for IDTFs in areas where IDTFs are in high concentration. A 2006 OIG review which found numerous problems with IDTFs (including improper payments of over $71 million) has already led to rulemaking that would address a number of areas of non-compliance. The OIG also will review services and billing patterns in geographic areas with high utilization of ultrasound services paid under the Medicare Physician Fee Schedule. The focus will be on disproportionately high charges and services per beneficiary, including the examination of provider and beneficiary profiles in high utilization areas.

Interventional Pain Care.

The Work Plan states that Medicare paid nearly $2 billion for pain management procedures in 2005. The OIG will determine the appropriateness of Medicare payments for interventional pain management procedures and will assess the oversight of these procedures.

DME.

The OIG reiterated its intentions to focus on Medicare claims for DME items and supplies submitted by providers in South Florida. This is a continuation of ongoing review and enforcement of non-complying DME suppliers which resulted in hundreds of South Florida DME suppliers having their enrollment status revoked in late 2005 and early 2006. The OIG found that 31% of suppliers in 3 South Florida counties did not meet the standards for operation. Further, the OIG will determine whether claims by South Florida DME suppliers were allowable. Similarly, the OIG will review DME claims nationwide for items and supplies furnished to Medicare beneficiaries receiving home health services. The OIG has determined that there are indications of unnecessary DME being ordered, thus, it will examine whether claims were allowable.

NOTE: We have had clients see their enrollments revoked, in some cases for inappropriate reasons. DME suppliers who have their enrollments revoked are well advised to carefully scrutinize the basis for CMS's revocation.

Patient Care in Physician-Owned Hospitals.

Concerns over the growth of physician-owned specialty hospitals previously led Congress (as part of the Medicare Modernization Act) to place an 18-month moratorium on referrals to such facilities. When that moratorium ended, CMS suspended the processing of enrollment applications for such facilities. The Work Plan indicates that physician-owned specialty hospitals are under ongoing review, including patient care and safety indicators and policies relating to staffing requirements.

Sleep Disorder Labs.

Medicare payments for polysomnography (sleep disorder diagnostics and services) increased almost threefold between 2001 and 2004 to $170 million. Sleep disorders are reimbursable for patients with symptoms consistent with sleep apnea, narcolepsy, and other disorders. The OIG will examine the appropriateness of payments for these services, which typically occur in specialized sleep clinics or "labs" and which involve testing of various physical parameters during sleep. The OIG will also examine the factors contributing to the rise in Medicare payments for polysomnography.

Dialysis and Renal Care.

The OIG will review a number of areas related to dialysis and end stage renal disease ("ESRD"). The OIG indicates that Medicare patients who require dialysis services are sometimes "admitted" for observation, which is payable on an hourly rate, rather than as an in-patient, which is reimbursed based on a DRG. When a hospital places a patient under observation, but has not formally admitted the patient, the services are "outpatient." Since observation services are paid on an hourly basis and can last up to 48 hours, the OIG will review these services to determine whether payment to a hospital for renal dialysis are appropriate.

Diagnostic X-Rays in Hospital ED.

The Work Plan indicates that between 2001 and 2004 there was a 10% rise in diagnostic x-ray use in Medicare-certified hospital emergency departments, amounting to $48.3 million in reimbursement for 2004. Based on concerns regarding overuse and the increased cost of such imaging services, the OIG will investigate the appropriateness of payments for diagnostic x-rays and interpretations.

Home Health Claims.

The OIG will review Medicare claims submitted by home health agencies to determine whether "home health resource groups" (HHRG) are being used correctly and are supported by appropriate medical record documentation. HHRGs involve categorization of beneficiaries into groups under a prospective payment system which uses case-mix adjustments. Each HHRG has an assigned weight that affects the payment rate. The OIG will assess claims for accuracy of HHRG assignment to identify patterns of upcoding. The OIG will also review payments for therapy services for home health beneficiaries. Therapy services are payable under the home health agency ("HHA") prospective payment system and may be provided through "under arrangement" relationships with outside suppliers. The OIG will review whether payments made to a HHA are correct and supported for the level of service claimed. Further, the OIG will identify Part B payments made to outside therapy suppliers and examine the adequacy of controls established to prevent inappropriate payments.

Hospice and Mental Health Services for Nursing Home Residents.

Hospice services are often provided to Medicare beneficiaries who reside in nursing homes. Medicare hospice spending doubled between 2001 and 2004 to $7 billion, with most of the growth associated with nursing home residents. The OIG will review the nature and extent of hospice services rendered at nursing home facilities to determine if services are appropriate and consistent with patient plans of care. The OIG will also review Medicare Part B payments for psychotherapy services provided to nursing home patients during non-covered Part A stays. A prior OIG audit found that 31% of outpatient claims for mental health services did not meet coverage guidelines, resulting in $185 million in inappropriate payments. The Work Plan indicates that the OIG will determine medical necessity of mental health services for nursing home residents, and will review coding and adequacy of documentation.

This is just a small sampling of the many dozens of projects that the OIG reports are part of its 2008 Work Plan. The complete Work Plan for 2008, containing a complete list of the projects and more detailed information can be downloaded from the OIG's website at: http://oig.hhs.gov/publications/docs/workplan/2008/Work_Plan_FY_2008.pdf.