OIG Releases 2017 Work Plan

Parker Poe Adams & Bernstein LLP

Parker Poe Adams & Bernstein LLP

On November 10, 2016, the Office of Inspector General (“the OIG”) of the U.S. Department of Health and Human Services (“DHHS”) is charged with ensuring the integrity of more than 100 programs administered by DHHS, including those within the Centers for Medicare and Medicaid Services, Center for Disease Control and Prevention, the Food and Drug Administration, and the National Institute of Health. The OIG Work Plan summarizes the OIG’s current activities – comprised of both new and revised activities — along with information regarding previously identified activities that have been completed, postponed, or cancelled.

The Work Plan highlights new and continuing priorities applicable to various provider types, including hospitals, nursing homes, hospices, home health, clinical laboratories, physicians and other health professionals, medical equipment suppliers and manufacturers, pharmaceutical manufacturers and other providers and suppliers.

The 2017 Work Plan is available here.

The following is a sampling of some of the new and ongoing efforts highlighted in the Work Plan:


  • Hyperbaric Oxygen Therapy Services – Reimbursement for noncovered conditions, medical documentation and receipt of more treatments than medically necessary (New)
  • Incorrect Medical Assistance Days – Appropriate reconciliation of Disproportionate Share Hospital Payments for Medicaid days reported on Medicare cost reports (New)
  • Inpatient Psychiatric Facility Outlier Payments – Compliance with Medicare documentation, coverage and coding requirements for stays (in either freestanding hospitals or hospital based psychiatric units) resulting in outlier payments (New)
  • Case Review of Inpatient Rehabilitation Hospital Patients Not Suited for Intensive Therapy – Sampling of rehab hospital admissions to determine whether intensive therapy achieved benefits (New)
  • Comparison of Provider-Based and Freestanding Clinics (Ongoing)
  • Reconciliations of Outlier Payments – Review of Medicare outlier payments to determine whether the Centers for Medicare & Medicaid Services (“CMS”) performed reconciliations in a timely manner to allow final settlements (Ongoing)
  • Use of Outpatient and Inpatient Stays Under the Two-Midnight Rule – Comparison of hospitals’ use of inpatient and outpatient stays prior to and after implementation of the Two-Midnight Rule and variance among hospitals (Ongoing)
  • Medicare Costs Associated with Defective Medical Devices (Ongoing)
  • Payment Credits for Replaced Medical Devices That Were Implanted (Ongoing)
  • Duplicate Graduate Medical Education Payments (Ongoing)
  • CMS Validation of Hospital-Submitted Quality Reporting Data (Ongoing)
  • Long-Term Care Hospitals – Adverse Events in Postacute Care for Medicate Beneficiaries (Ongoing)

Nursing Homes

  • Nursing Home Complaint Investigation Data Brief – Determination of the extent to which state agencies investigate immediate jeopardy and actual harm complaints within required timeframes (New)
  • Skilled Nursing Facilities (“SNFs”) – Unreported Incidents of Potential Abuse and Neglect – Assessment of the incidence of abuse and neglect of Medicare beneficiaries in SNFs, determination of whether incidents were properly reported and investigated, including follow-up with state officials to determine whether investigation and prosecution occurred, if appropriate (New)
  • SNF Reimbursement – Review of documentation at selected SNFs to confirm that services meet the requirements for the applicable resource utilization group (Ongoing)
  • SNF Prospective Payment System Requirements – Review of compliance with the SNF prospective payment requirement of a 3-day inpatient hospital stay within 30 days of a SNF admission (Ongoing)
  • Potentially Avoidable Hospitalizations of Medicare- and Medicaid-Eligible Nursing Facility Residents – Review of nursing homes with high rates of patient transfers to hospitals for potentially preventable conditions (such as urinary tract infections) to determine whether nursing homes provided services to residents in accordance with care plans (Ongoing)


  • Medicare Hospice Benefit Vulnerabilities and Recommendations for Improvement: A Portfolio – Summaries of OIG evaluations, audits and investigations of Medicare hospices and highlighting of key recommendations related to payment, compliance, oversight and quality of care concerns (New)
  • Review of Hospices’ Compliance with Medicare Requirements – Review of hospice medical records and billing documentation to determine compliance with Medicare payment requirements (New)
  • Hospice Home Care – Frequency of Nurse On-Site Visits to Assess Quality of Care and Services – Determination of whether required periodic registered nurse visits were made to Medicare beneficiaries receiving hospice care in their homes (New)

Home Health

  • Comparing Home Health Agency (“HHA”) Survey Documents to Medicare Claims Data – Determine whether HHAs accurately provide patient information to state agencies for recertification surveys (New)
  • Home Health Compliance with Medicare Requirements – Review of compliance with home health prospective payment system requirements, including medical review of documentation, to determine compliance with federal requirements for payment (Ongoing)

Clinical Laboratories

  • Monitoring Medicare Payments for Clinical Diagnostic Laboratory Tests – Analysis of Medicare payments for clinical diagnostic laboratory tests performed in 2016 and monitoring of CMS’ implementation of the new Medicare payment system required by the Protecting Access to Medicare Act of 2014 (New)
  • Selected Independent Clinical Laboratory Billing Requirements – Review of Medicare payments to independent clinical labs to determine compliance with billing requirements, identification of labs that routinely submit improper claims and recovery of overpayments (Ongoing)


  • Medicare Payments for Transitional Care Management (“TCM”) and Chronic Care Management (“CCM”) – Determination of whether payments for TCM and CCM complied with Medicare requirements (New)
  • Anesthesia Services – Noncovered Services – Review of Part B claims for anesthesia to determine compliance with Medicare requirements (Ongoing)
  • Anesthesia Services – Payments for Personally Performed Services – Review of claims for personally performed services to determine compliance with Medicare requirements and to determine support for claims billed with the “AA” service code modifier (Ongoing)
  • Physician Home Visits – Reasonableness of Services – Determination of whether physician home visits for evaluation and management were appropriately documented for medical necessity and made in accordance with Medicare requirements (Ongoing)
  • Prolonged Services – Reasonableness of Services – Determination of compliance with Medicare requirements for prolonged evaluation and management services claims

Medical Equipment and Supplies / Manufacturers

  • Data Brief of Financial Interests Reported Under the Open Payments Program – Analysis of data disclosed by manufacturers and group purchasing organizations (“GPOs”) under the Physician Payments Sunshine Act (“Open Payments”) to determine the nature of physician financial interests, the amounts paid by Medicare for drugs and durable medical equipment, prosthetics, orthotics and supplies ordered by physicians with financial interests (New)
  • Review of Financial Interests Reported under the Open Payments Program – Review the extent to which data reported under the Open Payments program is missing or inaccurate and whether CMS appropriately oversees manufacturer and GPO compliance with reporting requirements (Ongoing)

Prescription Drugs

  • Drug Waste of Single-Use Vial Drugs – Using the “JW” modifier, determine the amount of waste for the 20 single-use-vial drugs with the highest amount of waste and provide examples of when a different size vial could significantly reduce waste (New)
  • Potential Savings from Inflation-Based Rebates in Medicare Part B – Examination of the amount the federal government could potentially collect from pharmaceutical manufacturers if inflation-indexed rebates were required under Medicare Part B (using a comparison of a scenario in which an inflation-based methodology were in place versus the existing rebate policy as of 2015) (New)
  • Comparison of Average Sale Prices to Average Manufacturer Prices – Mandatory Review – Comparison of average sale prices to average manufacturer prices to identify instances in which average drug prices exceed average manufacturer prices by more than a designated threshold
  • Payments for Immunosuppressive Drug Claims with “KX” Modifiers – Determine whether documentation requirements were satisfied for Part B payments for immunosuppressive drugs billed with the KX service code modifier


  • Accountable Care Organizations – Beneficiary Assignment and Shared Savings Payments (Ongoing)
  • Accountable Care Organizations – Savings, Quality, and Promising Practices (Ongoing)
  • Ambulance Suppliers – Supplier Compliance with Payment Requirements (Revised)
  • Ambulatory Surgical Centers – Quality Oversight (Ongoing)
  • Chiropractic Services – Part B Payments for Noncovered Services and Portfolio Report on Medicare Part B Payments (Ongoing)
  • Inpatient Rehabilitation Facilities – Facility Payment System Requirements (Revised)
  • Physical Therapists – High Use of Outpatient Physical Therapy Services (Ongoing)
  • Sleep Disorder Clinics – High Use of Sleep-Testing Procedures (Ongoing)

In addition to those listed above, the 2017 Work Plan includes numerous initiatives related to Part A and B contractors and management issues, Part C (Medicare Advantage), Part D (Prescription Drug Program), Medicaid (including prescription drugs, home health and other Medicaid services, state claims for federal reimbursement, delivery system reform, state management, oversight of state Medicaid Fraud Control Units, information and security and Medicaid managed care), health insurance marketplaces, electronic health records, the OIG’s own legal and investigative activities, and other programs within DHHS.

More about the OIG

The OIG is charged with protecting the integrity of DHHS programs and guarding beneficiaries’ well-being by combating fraud, waste and abuse.  In pursuing its mission, the OIG uses a number of tools that are both preventive (e.g., outreach, compliance and education) and reactive (e.g., audits, investigations and evaluations).

Because it underscores the OIG’s critical focus areas, the Work Plan can serve as a helpful resource to compliance personnel in prioritizing their own compliance and risk assessment efforts.

Will a change in the administration impact the Work Plan?

Like so many other agencies in the executive branch, many positions within DHHS are appointed by the President with advice and consent of the Senate. The Inspector General, the head of the OIG, is among these appointed positions.  The current Inspector General has a long resume as a federal employee, having held Presidentially-appointed positions in several agencies during both Democratic and Republican administrations.  There has been widespread media speculation about potential Cabinet, judicial, and other appointments by President-Elect Trump.  This conjecture has included names of potential candidates to serve as Secretary of HHS.  At this time, however, we are not aware of any potential appointees for the Inspector General position.  Whether or not the current Inspector General is re-appointed to his current post, it is reasonable to anticipate that a new administration and new Secretary will bring shifting priorities to HHS.  Accordingly, we recommend that those in the healthcare industry keep an eye out for interim updates to the Work Plan that may be implemented during 2017.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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