HHS’s Office of Inspector General (OIG) released on Friday its Work Plan for fiscal year (FY) 2015. The 94-page work plan summarizes the new and ongoing reviews and activities that OIG plans to pursue across the full spectrum of HHS programs and operations including all aspects of Medicare and Medicaid. This article summarizes the OIG’s planned activities relating to hospital services and will list some of notable new initiatives the OIG has announced in other areas.

The OIG announced two new initiatives affecting hospital services for 2015. First, the OIG will review “hospital controls over the reporting of wage data used to calculate wage indexes for Medicare payments.” The OIG explained that this review was a reaction to the fact that “[p]rior OIG wage index work identified hundreds of millions of dollars in incorrectly reported wage data.” Second, the OIG announced a new initiative focusing on “[h]ospitals’ electronic health record system contingency plans,” whereby the OIG “will determine the extent to which hospitals comply with contingency planning requirements of the Health Insurance Portability and Accountability Act (HIPAA).”

In addition to these two new initiatives pertaining to hospital services, the OIG announced the following ongoing projects:

• Determining the impact of the “new inpatient admission criteria,” known as the 2-midnight rule, “on hospital billing, Medicare payments, and beneficiary copayments.” This review is particularly significant in light of the ongoing litigation in D.C. district court expressly challenging the Secretary’s assumptions regarding the financial impact of her new policy on hospitals.
• Reviewing “Medicare outlier payments to hospitals to determine whether CMS performed necessary reconciliations in a timely manner to enable Medicare contractors to perform final settlement of the hospitals’ associated cost reports.”
• Reviewing Medicare claims to identify the costs resulting from additional use of medical services associated with defective medical devices.
• Reviewing data from Medicare cost reports and hospitals to identify salary amounts included in operating costs reimbursed by Medicare and determining the effect of limiting the amount of employee compensation that could be submitted on future cost reports.
• Reviewing “Medicare outpatient payments made to hospitals for evaluation and management (E/M) services for clinic visits billed at the new-patient rate to determine whether they were appropriate and will recommend recovery of overpayments.”
• Reviewing provider-based entities for compliance with Medicare’s provider-based requirements and scrutinizing differences in payments made to provider-based facilities and freestanding facilities.
• Comparing reimbursement for swing-bed services at critical access hospitals (CAHs) to the same level of care obtained at traditional SNFs to determine whether Medicare could achieve cost savings through a more cost effective payment methodology.
• Reviewing the national incidence of adverse and temporary harm events for Medicare beneficiaries receiving care in long-term-care hospitals (LTCHs), which is a new initiative.
• Reviewing the national incidence of adverse and temporary harm events for Medicare beneficiaries receiving post-acute care in inpatient rehabilitation facilities (IRF).

Beyond these OIG reviews affecting hospitals, several notable new initiatives affecting other healthcare providers or suppliers include the following:

• Reviewing Medicare payments to independent clinical laboratories to determine laboratories’ compliance with selected billing requirements with the goal of identifying clinical laboratories that routinely submit improper claims and recommend recovery of overpayments.
• Conducting a risk assessment of internal controls over administration of the Pioneer Accountable Care Organization (ACO) Model.
• Determining what steps CMS has taken to improve its oversight of Part D sponsors’ Pharmacy and Therapeutics (P&T) committee conflict-of-interest procedures.
• Reviewing the rate and reasons for Medicaid beneficiary transfers from group homes and nursing facilities to hospital emergency rooms since occurrences of emergency transfers could indicate poor quality.

These are only selected highlights of the OIG’s 2015 work plan and interested parties should review the entire plan, which is available here.

Reporter, Daniel J. Hettich, Washington D.C., +1 202 626 9128, dhettich@kslaw.com.