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OIG Releases Fiscal Year 2013 Work Plan – Immediate Impact

The United States Department of Health and Human Services, Office of Inspector General (“OIG”), has published its Fiscal Year 2013 Work Plan. The Work Plan details the OIG’s compliance and enforcement goals for the coming year.

This Client Alert highlights key target areas for compliance enforcement in 2013 in order to help you focus your compliance efforts for the coming year. This Alert intentionally does not describe every project contained in the OIG’s 128 page Work Plan. Click here for the complete Work Plan. A second Alert will address data gathering and analysis activities that may shape future policies.

Immediate Impact – Current Audit and Enforcement Initiatives

Hospitals – Non-Hospital-Owned Physician Practices Using Provider-Based Status. Many physician practices have selected provider-based status in order to increase reimbursement. CMS plans to examine non-hospital-owned physician practices using provider-based status to determine if they meet all CMS billing requirements. The Medicare Payment Advisory Commission has recommended that Medicare seek to pay identical amounts for identical services regardless of provider-based status. Clients should first ensure that any providers using provider-based status meet the CMS billing requirements and, secondly, evaluate whether future plans to transfer providers to provider-based status continue to make sense given the possibility that financial benefits arising from the distinction may go away.

Hospitals – Compliance with Medicare’s Transfer Policy. This is a new initiative by Medicare in a series of initiatives that focus on discharges. Specifically, Medicare will evaluate whether payments made to hospitals for discharges should have been coded as transfers. In making this evaluation, Medicare will determine whether Medicare administrative contractors have been effective at identifying claims subject to the transfer policy. If a hospital discharges a beneficiary, it is paid the full DRG amount; whereas if a hospital transfers a beneficiary, it is paid at a graduated per diem rate. Miscoding could potentially result in recoupment of overpayments. In response, hospitals should perform an internal audit to make sure they are properly coding transfers and discharges.

Hospitals – Payments for Mechanical Ventilation. Certain DRG payments qualify under Medicare for mechanical ventilation coverage only if the beneficiary has received at least 96 hours of mechanical ventilation support. The OIG plans to evaluate whether Medicare payments were made for beneficiaries who did not receive 96 or more hours of ventilation. Based on this information, payments for mechanical ventilation may become an audit target. Facilities should perform an internal audit to make sure that they are correctly coding for mechanical ventilation to avoid or lessen the impact of an audit and a potential recoupment.

Hospitals – Inpatient/Outpatient Hospital Claims for Replacement of Medical Devices. The OIG plans to focus on inpatient and outpatient claims that include procedures to replace medical devices. Medicare is not responsible for the full cost of a replacement medical device if the facility receives a partial or full credit from the manufacturer as a result of a recall or a warranty claim. Medicare requires the use of a modifier on claims for replacement medical devices when the facility receives credit of at least 50% from the manufacturer for the replacement device. Hospitals should evaluate and analyze their coding practices for replacement medical devices.

Home Health Agencies – Home Health Face-to-Face Requirement. The OIG plans to evaluate whether home health agencies are complying with a statutory requirement that physicians (or certain practitioners working with physicians) who certify that beneficiaries are eligible for Medicare home health services have face-to-face encounters with the beneficiaries. The face-to-face encounter must be performed within 90 days prior to the start of home health care services, or within 30 days after the services began. In a previous study, the OIG determined that only 30% of beneficiaries received the required face-to-face visit. A facility that manages or provides home health agency services should be aware of this face-to-face requirement, have appropriate policies in place to meet that requirement, and ensure that the policies are implemented to assure compliance with this requirement.

Program Integrity – Medical Review of Part A and Part B Claims Submitted by Top Error-Prone Providers. Medicare has identified providers it considers error-prone in their claims submissions through its error rate testing (CERT program). The OIG intends to identify the error-prone providers with a history of high-dollar-amount errors and conduct a medical review on a sample of claims for each one of those providers. This program highlights the need for providers to perform self-audits to determine whether they are submitting error-free claims and take appropriate corrective action to avoid OIG review.

Program Integrity – Payment to Providers Subject to Debt Collection. In a new initiative, the OIG intends to determine whether providers and suppliers continue to receive Medicare payments after CMS has referred those providers and suppliers to the Department of Treasury for failure to refund previous overpayments. The OIG will focus on whether a provider or supplier stopped billing under the Medicare provider number through which it received the overpayment and began billing Medicare under a different number after it had been referred to the Department of Treasury. CMS may use such information to deny a provider’s enrollment application. This initiative highlights the need for facilities and other providers to conduct thorough due diligence when integrating with another provider which may be under OIG review for overbilling.

Anesthesia Services – Payments for Personally Performed Services. The OIG plans to review anesthesia services personally performed by a physician. If an anesthesia service is personally provided by an anesthesiologist, the service should be billed with the AA service code modifier. If the services are provided only at the medical direction of the anesthesiologist, the QK modifier must be used. This QK modifier limits payment to 50% of the Medicare allowed amount for personally performed services. Providers should assure that the appropriate modifier is being entered to lessen or avoid a possible future recoupment.

Rural Health Clinics – Compliance With Location Requirements. Under this initiative, the OIG plans to review rural health clinics to make sure they meet the basic location requirements. Rural health clinics should conduct an evaluation to determine whether they still meet the requirements for a rural health clinic in order to avoid recoupment of any enhanced Medicare reimbursements received after the clinic no longer met eligibility requirements.

Diagnostic Radiology – Medical Necessity of High-Cost Tests. The OIG is planning to review what it considers high-cost diagnostic radiology tests to determine medical necessity. Facilities and providers should review their use of such tests to ensure they are adequately documenting that the tests were medically necessary.

Physicians – Error Rate for “Incident-To” Services Performed by Non-Physicians. The OIG plans to review physician billing for “incident-to” services to identify possible over-utilization. “Incident-to” services are those services billed by physicians for services performed by non-physicians incident to a physician office visit. The OIG believes that this is a vulnerable area for Medicare because such services cannot be found in the claims data and only after review of the medical record. As a result of this initiative, providers should analyze their policies and practices to determine whether they are potentially over-utilizing “incident-to” services.

Physicians – Place of Service Coding Errors. The OIG plans to review physicians’ coding on Part B claims for services performed in an ambulatory surgical center or hospital outpatient department. Physicians are reimbursed at a higher amount when they perform services in a non-facility setting such as their office. The OIG is seeking ways to identify overpayments for physician services provided in a facility rather than an office. Providers should take steps to ensure their offices are properly coding their claims based upon the location of the services provided.

Evaluation and Management Services – Potentially Inappropriate Payments in 2010. The OIG plans to closely analyze repeat E/M services rendered by providers for the same beneficiaries in order to identify electronic health record documentation practices associated with potentially improper payments. Medicare contractors have observed an increasingly prevalent use of identical documentation across services. Medicare requires that providers select an HCSPCS code for the service based upon the level of service, and have documentation to support the level of service provided. The adoption of electronic health record systems creates an opportunity for overpayment because the EHR systems permit easy duplication of entries. Providers should audit their EHR and billing systems to ensure that there is adequate documentation to support the level of service provided.

Home Health Services – Screenings of Health Care Workers. The OIG plans to review the records of Medicaid home health workers to make sure they were adequately screened in compliance with both federal and state requirements. Examples of screenings include certain vaccinations such as hepatitis and influenza. Home health agencies should review federal and state requirements to ensure that their screening policies and practices are compliant with those requirements.

The experienced health care attorneys of Spencer Fane Britt & Browne LLP are available to assist health care organizations in identifying and addressing risk areas highlighted by the Work Plan.