OIG Releases 2014 Work Plan

by Benesch

The OIG recently made available its 2014 Work Plan. The Plan identifies OIG focus areas and priority projects for the coming year. This post provides a brief summary of many of the new OIG projects for fiscal year 2014 to assist providers in keeping abreast of the latest developments in health care fraud and abuse, compliance, reimbursement, and enforcement activities. Only a small part of the Plan is summarized here. For the entire document, please follow the link below.


-New Inpatient Admission Criteria. The new 2-night requirement for Medicare hospital inpatient admissions was implemented to address overpayments for short inpatient stays, inconsistent billing practices between hospitals, and financial incentives for improper billing. The OIG will monitor the effect of this new admission criteria on billing, Medicare payments, and beneficiary payments. It will also examine how billing varies between hospitals.

-Analysis of Salaries Included in Hospital Cost Reports. Employee compensation may be included with allowable provider cost reimbursement only to the extent that it represents reasonable remuneration for managerial, administrative, professional, and other services related to the operations of the facility and is furnished in connection with patient care. While currently  there are no limits to the allowable amount, the OIG will review data from Medicare cost reports and hospitals to identify salary amounts included in operating costs reimbursed by Medicare and determine the potential financial effect if the allowable amount of employee compensation is capped.

-Comparison of Provider-Based and Freestanding Clinics. The financial effect on Medicare of hospitals’ claiming provider-based status for their clinics will be evaluated in light of the fact that provider-based clinics receive higher reimbursement rates for certain similar procedures than do freestanding clinics.

-Outpatient Evaluation and Management Services Billed at the New-Patient Rate. The OIG will review Medicare outpatient payments to hospitals for evaluation and management services for visits billed at the new-patient rate to determine whether they were appropriate and recommend recovery of overpayments.

-Review of Cardiac Catheterization and Heart Biopsies. The OIG will review Medicare payments for right heart catheterizations and heart biopsies billed during the same operative session to determine whether hospitals complied with Medicare billing requirements.

-Payments for Patients Diagnosed with Kwashiorkor. The OIG will review Medicare payments to hospitals for claims with a diagnosis of kwashiorkor (protein deficiency related to severe malnutrition) to determine whether the diagnosis is adequately supported in the medical record.

-Bone Marrow or Stem Cell Transplants. The OIG will review Medicare payments to hospitals for bone marrow or stem cell transplants to determine whether Medicare payments were made in accordance with Federal rules and regulations, including efforts to detect double-billing for treatment already included in a claim for the transplantation, billing for diagnoses not covered by Medicare, and any absence of both procedure and diagnosis codes that meet coverage criteria.

-Indirect Medical Education Payment. The OIG will review provider data to determine whether hospitals’ indirect medical education payments were calculated correctly and made in accordance with Federal regulations and guidelines.

-Oversight of Hospital Privileging. The OIG will determine how hospitals assess medical staff candidates prior to granting initial privileges, including verification of credentials and reviews of the National Practitioner Databank.


-Hospice in Assisted Living Facilities. Assisted living residents have the most lengthy hospice stays and as a part of the Affordable Care Act, CMS must redesign the hospice reimbursement system, collect data relevant to hospice payments, and develop hospice quality measures. The OIG will review the extent to which hospices serve Medicare beneficiaries residing in assisted living facilities, including characteristics such as length of stay, levels of care, and common terminal illnesses of beneficiaries.

Medical Equipment

-Reasonableness of Medicare’s Fee Schedule Amounts for Selected Medical Equipment Items. The OIG will compare Medicare payments made for various medical equipment items to the amounts paid by non-Medicare payers (such as private insurance and the VA) to identify wasteful spending. Equipment to be examined includes commode chairs, folding walkers, and transcutaneous electrical nerve stimulators.

-Power Mobility Devices, Lump-Sum Purchase Versus Rental. The OIG will determine whether savings can be achieved by Medicare if certain power mobility devices are rented over a 13-month period rather than acquired through a lump-sum purchase.

-Power Mobility Devices, Add-On Payment for Face-to-Face Examination. Device claims have been shown to be more likely unallowable when a prescribing physician fails to bill for the Medicare add-on payment available for documenting need for the device (this add-on is in addition to the claim for evaluation and management service in connection with the device prescription). The OIG will review Medicare Part B payments for suppliers of power mobility devices to determine whether Medicare requirements for a face-to-face examination were met.

The entire OIG Plan is available here: http://oig.hhs.gov/reports-and-publications/archives/workplan/2014/Work-Plan-2014.pdf.

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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