What Health Care Providers Need to Know to Comply with the OIG’s Fiscal Year 2016 Work Plan

On November 2, 2015, the Office of the Inspector General (OIG) released its Fiscal Year 2016 Work Plan.  Set forth below is a summary of certain new and revised items on the OIG’s list that may be of interest to our health care clients.
Oversight of Provider-Based Status (Revised)The OIG will continue to determine the number of provider-based facilities owned by hospitals and whether these facilities meet the regulatory requirements in 42 C.F.R. § 413.65.  In addition, the OIG will review whether there were any challenges associated with the provider-based attestation review process.  The OIG is concerned about provider-based facilities that bill as hospital outpatient departments.  The OIG is likely to focus on hospital outpatient departments established prior to November 2, 2015 since payment changes will take effect for “new” hospital outpatient departments established after that date.  Under Section 603 of the Bipartisan Budget Act of 2015, any “new” off-campus hospital outpatient department established after November 2, 2015 (other than a dedicated emergency department) will be paid under either the Medicare payment system applicable to ambulatory surgical centers or the Medicare physician fee schedule.Medical Device Credits for Replaced Medical Devices (New)When a medical device implanted during an inpatient or outpatient procedure requires replacement due to defects, recalls, mechanical complications, etc., Medicare pays for the replacement at a reduced rate.  See 42 C.F.R. §§ 412.89 and 419.45.  The OIG will review whether Medicare payments for inpatient and outpatient claims for replaced medical devices were appropriate.  Prior OIG reviews revealed that Medicare Administrative Contractors made payments to hospitals for replaced medical devices at non-reduced rates.Medicare Payments to Acute Care Hospitals during MS-DRG Payment Window (New)

The OIG will review billing of outpatient claims under Medicare Part B for services provided during inpatient stays at acute care hospitals.  Medicare billing regulations provide that certain items, supplies, and services furnished to inpatients are covered under the Medicare Part A payment.  Therefore, they should not be billed separately to Medicare Part B.  See 42 C.F.R. §§ 409.10 and 410.3.  Prior OIG audits have identified that acute care hospitals are at risk for noncompliance with this requirement.

CMS Validation of Hospital-Submitted Quality Reporting Data (New)

Hospitals need to be sure that the quality data they report to the Centers for Medicare & Medicaid Services (CMS) under the hospital quality reporting program is accurate and complete.  The OIG will examine the extent to which CMS validates the accuracy and completeness of the quality data reported by hospitals under the hospital quality reporting program.  Hospitals are at risk of a 2 per cent reduction in their Medicare payments if their quality reporting data is not accurate and complete.

Controls over Networked Medical Devices at Hospitals (New)

The OIG intends to examine the Food and Drug Administration’s (FDA’s) oversight of hospitals’ networked medical devices to determine whether oversight is adequate to protect electronic protected health information (ePHI) and ensure patient safety. The OIG notes that computerized medical devices, such as dialysis machines, radiology systems, and medication dispensing systems that are integrated with electronic medical records and a hospital’s larger health network, present an increasing threat to the privacy and security of PHI.  Networked medical devices are also subject to oversight by the Office for Civil Rights (OCR), and the privacy and security of ePHI will also be a focus of HIPAA audits by the OCR in the upcoming calendar year.

Nursing Homes

Skilled Nursing Facility PPS Payments (New)

The OIG will assess compliance with the skilled nursing facility prospective payment system (SNF PPS), including whether SNF claims were paid in accordance with federal laws and regulations and documentation requirements.  The OIG is particularly concerned about SNF claims for therapy services since previous audits indicated that SNF payments for therapy services “greatly exceeded” SNF costs.

State Agency Verification of Deficiency Surveys (New)

The OIG will review whether State survey agencies conduct appropriate follow-ups to verify that nursing homes have corrected deficiencies identified during surveys.  The State survey agency is expected to verify the correction of deficiencies through onsite review or by obtaining other evidence that demonstrates the deficiencies have been corrected.


General Inpatient Hospice Care

Hospices will continue to be under scrutiny by the OIG.  The OIG intends to review the general inpatient hospice care benefit, including:

The appropriateness of general inpatient care claims;

The content of election statements of hospice beneficiaries who receive general inpatient care;

Hospice beneficiaries’ plans of care;

The medical records of hospices that billed for general inpatient hospice care to determine whether that level of care was medically necessary;

Whether payments for hospice benefits were made in accordance with governing regulations.

Ambulatory Surgical Centers

The OIG plans to examine Medicare’s oversight of the quality of care provided at Ambulatory Surgical Centers (ASCs).  Prior review by the OIG found issues with Medicare’s oversight, including five or more years between certification surveys for some ASCs, poor CMS oversight of ASCs by State survey agencies and ASC private accreditation organizations, and limited public information on the quality of ASCs.


Physicians-Referring/Ordering Medicare Services and Supplies

Physicians and non-physician practitioners are required to be enrolled in the Medicare program to refer/order certain services, supplies, and durable medical equipment.  If these requirements are not met, then payment of Medicare claims for these services should not be made.  The OIG will review certain Medicare services, supplies, and durable medical equipment referred/ordered by physicians and non-physician practitioners to determine whether orders met these requirements and whether payments were appropriate.

Anesthesia Services-Non-Covered Services

Medicare will only pay for anesthesia services under Medicare Part B if the services are “reasonable and necessary” and the beneficiary had a related Medicare service.  The OIG intends to review Medicare Part B claims for anesthesia services to determine whether they comply with these requirements.

Physician Home Visits – Reasonableness of Services

The OIG will determine whether Medicare payments to physicians for evaluation and management home visits were reasonable, including whether physicians documented the medical necessity of a home visit instead of an office visit or an outpatient visit.

Prolonged Evaluation and Management Services – Reasonableness of Services

The need for prolonged evaluation and management services (additional time beyond the time spent with a beneficiary for a usual companion evaluation and management service) is considered to be “rare and unusual.”  The OIG intends to evaluate whether Medicare payments to physicians for prolonged evaluation and management services were reasonable and made in accordance with Medicare requirements.


If you have questions about the OIG’s Fiscal Year 2016 Work Plan, or any concerns regarding your organization’s compliance with the items in the Plan, please contact Rochelle H. Zapol, a partner in Prince Lobel’s Health Care Practice Group and the author of this alert. You can reach Rochelle at 617 456 8036 or rzapol@PrinceLobel.com

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