OIG Identified Enforcement Priorities for 2011

The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) issued its annual Work Plan on October 1, 2010. The 2011 Work Plan, which describes new and ongoing audit and enforcement priorities for the OIG, is useful in identifying corporate compliance risk areas and focusing providers’ compliance efforts. Hospital executives and compliance officers should carefully review the plan to ensure their hospital’s compliance efforts for the upcoming year address the OIG’s identified enforcement priorities.

I. New Hospital Audit Activities for 2011:
In addition to the ongoing audit activities identified by the OIG in prior work plans and summarized below, the OIG also identified the following new hospital risk areas for 2011.

Medicare Outlier Payments: Outlier payments are supplemental payments to compensate for beneficiaries who incur unusually high costs. These payments are based upon the most recent cost-to-charge ratio, as determined from the hospital’s cost report. The OIG will examine trends of outlier payments nationally and identify characteristics of hospitals with high or increasing rates of outlier payments and evaluate whether Medicare properly calculated the payments.

Hospital Reporting for Restraint and Seclusion-Related Deaths: Hospitals are required to report deaths to CMS that occur while a patient is in restraint or seclusion, or within 24 hours after a patient was removed from restraint or seclusion. CMS subsequently determines whether an investigation of the patient’s death is appropriate. The OIG will review the volume of reports of hospital-reported restraint and seclusion-related deaths and the outcomes from such reports. It will also look into the result of state investigations and action taken by states against hospitals.

Hospitals’ Compliance with Medicare Conditions of Participation for Intensity-Modulated (IMRT) and Image- Guided (IGRT) Radiation Therapy Services: The OIG will evaluate hospitals’ compliance with the Medicare Conditions of Participation relating to safety, personnel qualifications and quality standards in the provision of therapeutic radiological services, such as IMRT and IGRT services.

Medicare Brachytherapy Reimbursement: The OIG will review Medicare payments for brachytherapy to determine if such payments meet Medicare requirements. Brachytherapy is a form of radiotherapy where a radiation source is placed inside or next to the area requiring treatment. Medicare pays for radioactive source devices used in treatment of certain forms of cancer.

Accuracy of Hospital Occupational Mix Data: The OIG will evaluate and determine if hospitals accurately reported occupational-mix data used to calculate inpatient wage indexes in compliance with Medicare regulations. Hospitals must accurately report such data every three years. CMS uses this data to calculate adjustments to its hospital wage indexes, which are an important component of the Medicare prospective payment system (PPS) for hospitals.

Medicare Incentive Payments for Electronic Health Records (EHRs): The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided for Medicare incentive payments from 2011 – 2016 to physicians and hospitals that demonstrated meaningful use of certified EHR technology. An EHR is an electronic record that is created by healthcare providers to store an individual’s health related information. The OIG will review incentive payments from 2011 to ensure that the requirements for receiving the payments were met, and will also assess CMS’ safeguards to prevent inappropriate payments.

Services Performed by Clinical Social Workers: Medicare regulations prohibit inpatient services provided by clinical social workers (CSW) from being billed as CSW services under Part B. The OIG will look at overlapping dates of service for Part A and Part B and review whether services by CSWs to inpatients of Medicare participating hospitals or SNFs were separately billed to Part B.

Partial Hospitalization Program Services: A Partial Hospitalization Program (PHP) is an outpatient program for psychiatric services that hospitals provide to individuals instead of inpatient treatment. OIG will evaluate whether Medicare payments for PHP psychiatric services meet Medicare requirements based on a review of documentation supporting psychiatric services, including plans of care, and physician supervision and certification requirements.

Outpatient Physical Therapy Services Provided by Independent Therapists: Medicare reimbursement regulations require that services must be reasonable and necessary for the diagnosis and treatment of illness or injury or to improve functioning of a malformed body member. The OIG will look at independent physical therapists with a high utilization rate for outpatient therapy services, and will evaluate whether such therapists’ accurately billed for their services. The OIG will conduct a parallel review of Medicaid payments for physical, occupational and speech therapy services.

Appropriateness of Medicare Payments for Polysomnography: Medicare reimburses for sleep testing, provided that patients have symptoms such as sleep apnea, narcolepsy, impotence, or parasomnia. OIG will evaluate whether claims for Medicare payments for sleep studies were made in accordance with Medicare regulations. Further, the OIG will review the factors that account for the increase in claims for sleep study reimbursement and evaluate provider compliance.

Excessive Payments for Diagnostic Testing: OIG will evaluate Medicare reimbursements for high-cost diagnostic tests and assess the medical necessity of such payments. Moreover, the OIG will review whether primary care physicians and physician specialists are ordering the same diagnostic tests for beneficiaries in the same contexts.

Medicaid Disproportionate Share Hospital Payments: The Recovery Act provides for supplemental payments to states in addition to regular Medicaid disproportionate share hospital (DSH) payments, which help to cover the higher cost of providing care to uninsured and low-income patients. OIG will evaluate whether DSH payments were in accordance with expenditure requirements under Medicaid.

II. Continuing OIG enforcement initiatives:
In addition to the new enforcement initiatives identified by the OIG in the 2011 Work Plan, the OIG indicated that prior hospital enforcement activities would continue in the following areas: (1) Part A Hospital Capital payments; (2) Provider based status for inpatient and outpatient facilities; (3) Critical Access Hospital payments; (4) Medicare DSH payments; (5) Medicare Secondary Payor/other insurance coverage; (6) Hospital Readmissions; (7) Adverse Events and responses; (8) Payments for diagnostic radiology services in hospital ER departments; and (9) Observation services during outpatient visits.

It is important to keep in mind that the above summary is merely a highlight of the various enforcement initiatives and auditing activities in which the OIG will be engaged during 2011. With the increase in the OIG’s budget and anticipated enforcement actions, it is imperative that every hospital work with experienced health law counsel to develop a clear and pro-active plan to assess its compliance with federal and state conditions of participation, billing rules and fraud and abuse laws.