Norton Rose Fulbright: OIG Releases FY 2014Work Plan Summary

By Frederick Robinson, Megan Fanale Engel, Cori Annapolen Goldberg and Selina Coleman

On January 31, 2014, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published its Work Plan for fiscal year 2014. The OIG announced that in the upcoming year, it will continue to investigate various Medicare and Medicaid claims made to nearly every type of provider group. Below is a brief survey of some of the OIG’s newly planned review and monitoring activities.

  • Comparison of provider-based and free-standing clinics – The OIG will review and compare Medicare payments for similar services to physician offices in provider-based facilities with free-standing clinics to assess the potential financial impact of hospitals claiming provider-based status for clinics on the Medicare program. Provider-based facilities often receive higher Medicare payments for some services than do free-standing clinics.
  • Duplicate graduate medical education payments – Prior OIG reviews found that hospitals have received duplicate reimbursement for graduate medical education (GME) costs. Medicare reimburses teaching hospitals for direct GME costs through the direct graduate medical education (DGME) payment, and for higher costs associated with services teaching hospitals provide through the indirect graduate medical education (IME) payment. The OIG will review provider data from CMS’s Intern and Resident Information System (IRIS) to determine whether hospitals received duplicate or excessive GME payments and to assess the effectiveness of IRIS to prevent duplicate payments.
  • Indirect medical education payments – Prior OIG reviews have determined that hospitals have received excess reimbursement for IME costs. The OIG will review provider data to determine whether hospitals’ IME payments were calculated properly and whether they were made in accordance with federal regulations and guidelines.
  • Outpatient evaluation and management services billed at the new-patient rate – The OIG has identified overpayments that occurred because hospitals used new-patient codes when billing for evaluation and management services to established patients.  As a result, the OIG plans to review Medicare outpatient payments made to hospitals for evaluation and management services for clinics billed at the new-patient rate to determine whether they were appropriate or whether they constitute overpayments that should be paid to the government.
  • Nationwide review of cardiac catheterization and heart biopsies – Previous OIG audits have identified inappropriate payments when hospitals were paid for separate right heart catheterization procedures when the services were already included in payments for heart biopsies.  The OIG will be assessing whether these claims have been billed appropriately. 
  • Bone marrow or stem cell transplants – Prior OIG reviews have identified hospitals that have billed incorrectly for bone marrow or stem cell transplants.  Transplantations are covered under Medicare only for specific diagnoses.  Procedure codes must be accompanied by the diagnosis codes that meet specified coverage criteria.  The OIG will review Medicare payments made to hospitals for bone marrow or stem cell transplants to determine whether Medicare payments were paid in accordance with federal rules and regulations.
  • Medicare costs associated with defective medical devices – CMS has previously expressed concerns about the impact of the cost for replacement devices, including ancillary costs, on Medicare payments for inpatient and outpatient services. The OIG will review Medicare claims to identify the costs resulting from additional utilization of medical services associated with defective medical devices and determine the impact of the cost on the Medicare Trust Fund.

The OIG will continue to also monitor the implementation of the Affordable Care Act (ACA) programs, focusing its oversight on the operation of the new Health Insurance Marketplaces and expanding the Medicaid program. The OIG has prioritized four key areas for reviews: payment accuracy; eligibility systems; contracts—planning, acquisition, contracting, management, and performance; and security of data and consumer information.

The full Work Plan is available here.

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