Last week, the Department of Health and Human Services, Office of Inspector General (OIG) released its Work Plan for Fiscal Year 2013 (Work Plan), detailing the areas OIG will be scrutinizing in 2013.  On the Medicare side, OIG will examine hospitals, other providers, medical equipment suppliers, and pharmaceutical manufacturers in many areas including new areas of inquiry for Medicare Advantage plans and Part D prescription plans.  On the Medicaid side, the Work Plan includes new areas of scrutiny for pharmaceutical manufacturers and Medicaid managed care plans.  Among the new areas of scrutiny, broken down by category, are:

Hospitals

• Compliance with Medicare requirements for inpatient billing, particularly in light of the substantial 2008 changes in the inpatient prospective payment system;
• Feasibility of reducing payments by bundling outpatient services delivered up to 14 days prior to an inpatient hospital admission into the diagnosis-related group (DRG) payment.  (Currently, Medicare bundles only outpatient services delivered 3 days before an inpatient hospital admission);
• Existence and impact of Medicare payments for services by non-hospital-owned physician practices that are unnecessarily higher because the practices can bill as the hospital;
• Existence of hospital bills for beneficiary discharges that should have been billed as transfers or as discharges to a swing bed in another hospital; and
• Potential reduction in costs for CMS if it were to preclude certain claims where surgical procedures are canceled.

Medical Equipment and Suppliers

• Adequacy of accreditation organization requirements for granting accreditation to medical equipment suppliers (and whether such requirements meet Medicare’s quality standards);
• Appropriateness of claims for payment submitted by medical equipment suppliers for lower limb prostheses; and
• Appropriateness of claims submitted by medical equipment suppliers for power mobility devices.

Other Providers and Suppliers

• Appropriateness of 2011 ophthalmological services billing;
• Adequacy of CMS oversight mechanisms related to the off-label and off-drug compendia use of Medicare Part B drugs;
• Adequacy of documentation submitted in support of claims for payment under Medicare Part B for immunosuppressive drugs; and
• Potential cost savings to Medicare had payments for Medicare Part B drugs infused through medical equipment been based on average sales price instead of average wholesale price.

Medicare Advantage Plans

• Adequacy of notices of denied requests for services or payments that are sent to beneficiaries with respect to how clearly the beneficiaries’ right to request reconsiderations and to appeal are explained; and
• Completeness, consistency and accuracy of encounter data reflecting the items and services provided to Medicare Advantage plans (particularly in light of new expanded reporting requirements).

Prescription Drug Program

• Sufficiency of pharmaceutical manufacturer safeguards in place to ensure that beneficiaries do not use copayment coupons to obtain prescription drugs paid for by Medicare Part D;
• Sufficiency of voluntary reports received by CMS since 2010 regarding anti-fraud activity data;
• Adequacy of Part D plan oversight of the ways in which pharmacy benefit managers are carrying out their responsibilities to administer the formularies and manage prescription drug use; and
• Negative impact of the differences in Part D plan specialty tier formularies and cost-sharing arrangements on beneficiary’s choices of plans, drug adherence, and choice of drugs.

Medicaid

• Pharmaceutical manufacturer compliance with average manufacturers price reporting requirements;
• Establishment and adequacy of State controls for collecting Medicaid rebates on physician-administered drugs; and
• Collection of the basic Federal minimum rebate amount required by the Patient Protection and Affordable Care Act of 2010 from pharmaceutical manufacturers.

Medicaid Managed Care

• Sufficiency of Medicaid managed care provider networks to provide adequate access to all Medicaid services;
• Adequacy of State monitoring of Medicaid managed care organizations’ (MCOs) grievances and appeals systems for compliance with federal requirements; and
• Adequacy of Medicaid MCOs fraud, waste, and abuse prevention and detection processes.

To view a copy of the Work Plan, please click here.  We would be pleased to answer any questions you may have regarding the Work Plan or the steps your organization should consider taking in anticipation of these inquiries.  

Reporter, John C. Richter, Washington, D.C., +1 202 626 5617, jrichter@kslaw.com.