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2014 Office of Inspector General Work Plan

March 11th, 2014

The Health and Human Services (HHS) Office of the Inspector General (OIG) is responsible for policing all HHS agencies, such as the Centers for Medicare and Medicaid Services.  Its main focus is to detect and/or eliminate fraud and abuse. The OIG conducts investigations in conjunction with other law enforcement agencies such as the Federal Bureau of Investigations (FBI), U.S. Postal Inspection Service and various state Medicaid Fraud Control units. Responsibilities include auditing, investigating and inspecting HHS programs and operations, identifying program weaknesses; leading activities to prevent fraud and abuse from occurring; finding wrongdoers and abusers of HHS programs and applying sanctions when necessary. The OIG may investigate individuals, facilities and entities for services claimed but not rendered or not medically necessary, claims that manipulate codes in an effort to inflate reimbursement amounts and other false claims submitted to obtain program funds.

In January, the OIG released its work plan for the 2014 fiscal year.  Below are direct excerpts from the 2014 OIG Work Plan that may potentially relate to an OMS office or an individual oral and maxillofacial surgeon.   This area of focus may later result in policy or reimbursement changes.  Being familiar with these areas in which the OIG is monitoring improper payments or abuse may help in understanding why Medicare requests overpayments to be refunded or claim audits may be performed.    Being familiar of these issues also serves as a reminder to be sure that claims are coded appropriately.

Hospitals- New Inpatient Admission Criteria (New)

Policies and Practices. The OIG will determine the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary payments. This review will also determine how billing varied among hospitals in FY 2014. Context—Previous OIG work found overpayments for short inpatient stays, inconsistent billing practices among hospitals, and financial incentives for billing Medicare inappropriately. Beginning in FY 2014, new criteria state that physicians should admit for inpatient care those beneficiaries who are expected to need at least 2 nights of hospital care. Beneficiaries whose care is expected to last less than 2 nights should be treated as outpatients. The criteria represent a substantial change in the way hospitals bill for inpatient and outpatient stays. (OEI; 00-00-00000; expected issue date: FY 2015; new start)

Hospitals- Impact of Provider-Based Status on Medicare Billing

Policies and Practices. The OIG will determine the impact of subordinate facilities in hospitals billing Medicare as being hospital based (provider based) and the extent to which such facilities meet CMS’s criteria. Context—Provider-based status allows a subordinate facility to bill as part of the main provider. Provider-based status can result in additional Medicare payments for services furnished at provider-based facilities and may increase beneficiaries’ coinsurance liabilities. In 2011, the Medicare Payment Advisory Commission (MedPAC) expressed concerns about the financial incentives presented by provider-based status and stated that Medicare should seek to pay similar amounts for similar services. (OEI; 04-12-00380; 04-12-00381; expected issue date: FY 2014; work in progress)

Hospitals- Outpatient Dental Claims

Billing and Payments. The OIG will review Medicare hospital outpatient payments for dental services to determine whether such payments were made in accordance with Medicare requirements. Context— Current OIG audits have indicated that hospitals received Medicare reimbursement for noncovered dental services, resulting in significant overpayments. Dental services are generally excluded from Medicare coverage, with a few exceptions. (Social Security Act, § 1862(a)(12).) For example, Medicare reimbursement is allowed for the extraction of teeth to prepare the jaw for radiation treatment (CMS’s Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 15, § 150). (OAS; W-00-13-35603; W-00-14-35432; various reviews; expected issue date: FY 2014; work in progress)

Hospitals- Outpatient Evaluation and Management Services Billed at the New-Patient Rate (new)

Billing and Payments. The OIG will review 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 recommend recovery of overpayments. Context—Preliminary work identified overpayments that occurred because hospitals used new-patient codes when billing for services to established patients. The rate at which Medicare pays for evaluation and management services requires hospitals to identify patients as either new or established, depending on previous encounters with the hospital. According to Federal regulations, the meaning of “new” and “established’ pertains to whether the patient has been seen as a registered inpatient or outpatient of the hospital within the past 3 years. (73 Fed. Reg. 68679 (November 18, 2008).) (OAS; W-00-12-35627; W-00-14-35627; expected issue date: FY 2014; work in progress)

Reasonableness of Medicare’s Fee Schedule Amounts for Selected Medical Equipment Items Compared to Amounts Paid by Other Payers (New)

Policies and Practices. The review will determine the reasonableness of the Medicare fee schedule amount for various medical equipment items, including commode chairs, folding walkers, and transcutaneous electrical nerve stimulators. We will compare Medicare payments made for various medical equipment items to the amounts paid by non-Medicare payers, such as private insurance companies and the Department of Veterans Affairs (VA), to identify potentially wasteful spending. We will estimate the financial impact on the Medicare program and on beneficiaries of aligning the fee schedule payments for the various Items with those of non-Medicare payers. Context—Prior OIG work found that Medicare overpays for various types of medical equipment. Federal statutes and regulations authorize CMS to determine whether the standard methods of determining the fee schedule amounts have resulted in unreasonably high or low payment amounts for particular items or services. If CMS determines that the standard methods of determining fee schedule amounts for certain categories of items or services will result in "grossly deficient or excess amounts," CMS may replace the current fee schedule amounts with special payment limits that are reasonable and equitable. (42 CFR § 405.502(g)(1)(ii) - (iii).) (OAS; W-00-14-35462; expected issue date: FY 2015; new start)

Ambulatory Surgical Centers—Payment System

Policies and Practices-The OIG will review the appropriateness of Medicare’s methodology for setting ambulatory surgical center (ASC) payment rates under the revised payment system.  They will also determine whether a payment disparity exists between the ASC and hospital outpatient department payment rates for similar surgical procedures provided in both settings. Context—A change in Federal law required the Secretary to implement a revised payment system for payment of surgical services furnished in ASCs beginning January 1, 2008. Accordingly, CMS implemented a revised ASC payment system modeled on the Outpatient Prospective Payment System. (Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), § 626.) (See also 42 CFR § 416.171.) (OAS; W-00-10-35423; W-00-11-35423; W-00-12-35423; various reviews; expected issue date: FY 2014; work in progress)

Anesthesia Services—Payments for Personally Performed Services

Billing and Payments. The OIG will review Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements. We will also determine whether Medicare payments for anesthesiologist services reported on a claim with the “AA” service code modifier met Medicare requirements. Context—Physicians report the appropriate anesthesia modifier code to denote whether the service was personally performed or medically directed. (CMS, Medicare Claims Processing Manual, Pub. No. 100-04, ch.12, § 50) Reporting an incorrect modifier on the claim as if services were personally performed when they were not will result in Medicare’s paying a higher amount. The service code “AA” modifier is used for anesthesia services personally performed by an anesthesiologist, whereas the QK modifier limits payment to 50 percent of the Medicare-allowed amount for personally performed services claimed with the AA modifier. Payments to any service provider are precluded unless the provider has furnished the information necessary to determine the amounts due. (Social Security Act, §1833(e).) (OAS; W-00-13-35706; various reviews; expected issue date: FY 2014; new start)

Diagnostic Radiology—Medical Necessity of High-Cost Tests

Billing and Payments. The OIG will review Medicare payments for high-cost diagnostic radiology tests to determine whether they were medically necessary and the extent to which utilization has increased for these tests. Medicare will not pay for items or services that are not “reasonable and necessary.” (Social Security Act, § 1862 (a)(1)(A).) (OAS; W-00-12-35454; W-00-13-35454; various reviews; expected issue date: FY 2015; work in progress)

Evaluation and Management Services—Inappropriate Payments

Billing and Payments. The OIG will determine the extent to which selected payments for evaluation and management (E/M) services were inappropriate. We will also review multiple E/M services associated with the same providers and beneficiaries to determine the extent to which electronic or paper medical records had documentation vulnerabilities. Context—Medicare contractors have noted an increased frequency of medical records with identical documentation across services. Medicare requires providers to select the billing code for the service on the basis of the content of the service and to have documentation to support the level of service reported. (CMS’s Medicare Claims Processing Manual, Pub. No. 100-04, ch. 12, § 30.6.1.) (OEI; 04-10-00181; 04-10-00182; expected issue date: FY 2014; work in progress)

Physicians and Suppliers—Noncompliance with Assignment Rules and Excessive Billing of Beneficiaries

Billing and Payments. The OIG will review the extent to which physicians and suppliers participated in Medicare and accepted claim assignment during 2012. We will also assess the effects of their participation and claim assignments on the Medicare program (such as noncompliance with assignment rules) and on beneficiaries (such as excessive billing of beneficiaries’ share of charges). Context—Physicians participating in Medicare agree to accept payment on “assignment” for all items and services furnished to individuals enrolled in Medicare. (Social Security Act, § 1842(h)(1).) CMS defines “assignment” as a written agreement between beneficiaries, their physicians or other suppliers, and Medicare. The beneficiary agrees to allow the physician or other supplier to request direct payment from Medicare for covered Part B services, equipment, and supplies by assigning the claim to the physician or other supplier. The physician or other supplier in return agrees to accept the Medicare-allowed amount indicated by the carrier as the full charge for the items or services provided. (OEI; 07-12-00570; expected issue date: FY 2014; work in progress)

Physicians: Place-of-Service Errors

Billing and Payments. The OIG will review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. Context— Prior OIG reviews determined that physicians did not always correctly code non-facility places of service on Part B claims submitted to and paid by Medicare contractors. Federal regulations provide for different levels of payments to physicians depending on where services are performed. (42 CFR § 414.32.) Medicare pays a physician a higher amount when a service is performed in a non-facility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ambulatory surgical center. (OAS; W-00-11-35113; various reviews; expected issue date: FY 2014; work in progress)

Covered Uses for Medicare Part B Drugs (new)

Quality of Care and Safety. We will review the oversight actions CMS and its claims processing contractors take to ensure that payments for Part B drugs meet the appropriate coverage criteria. We will also identify challenges contractors face when making coverage decisions for drugs. Context—If Part B MACs do not have effective oversight mechanisms, Medicare and its beneficiaries may pay for drugs with little clinical evidence of the drugs’ safety and effectiveness. Medicare Part B generally covers drugs when they are used to treat conditions approved by the Food and Drug Administration, referred to as “on-label” uses. Part B may also cover drugs when an “off-label” use of the drug is supported in major drug compendia or when an off-label use is supported by clinical evidence in authoritative medical literature. (Social Security Act, § 1861(t).) (OEI; 03-13-00450; expected issue date: FY 2014; work in progress)

Enhanced Enrollment Screening Process for Medicare Providers

Provider Eligibility. We will determine the extent to which and the way in which CMS and its contractors have implemented enhanced screening procedures for Medicare providers pursuant to the Affordable Care Act, § 6401. We will also collect data on and report the number of initial enrollments and enrollment revalidations approved and denied by CMS before and after the implementation of the enhanced screening procedures. Context—As part of an effort to prevent fraud, waste, and abuse resulting from vulnerabilities in the Medicare enrollment process, CMS is implementing new authorities that include a site visit process, an automated provider screening process, fingerprinting, and background checks. (OEI; 03-13-00050; expected issue date: FY 2014; work in progress. Affordable Care Act.)

Medical Equipment and Supplies—Opportunities to Reduce Medicaid Payment Rates for Selected Items

Policies and Practices. We will determine whether opportunities exist for lowering Medicaid payments for selected items of medical equipment and supplies. We will also determine the amount of Medicaid savings that could be achieved for selected items through rebates, competitive bidding, or other means. Context—Prior work found that State Medicaid programs negotiated rebates with manufacturers that reduced net payments for home blood-glucose test strips. Similarly, CMS reduced Part B rates of payment in selected areas through competitive bidding. (OAS; W-00-13-31390; various reviews; expected issue date: FY 2014; new start)

Dental Services for Children—Inappropriate Billing

State Claims. We will review Medicaid payments by States for dental services to determine whether States have properly claimed Federal reimbursement. Context—Prior OIG work indicated that some dental providers may be inappropriately billing for services. Dental services are required for most Medicaid-eligible individuals under age 21 as a component of the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services benefit. (Social Security Act, §§ 1905(a)(4)(B) and 1905(r).) Federal regulations define “dental services” as diagnostic, preventative, or corrective procedures provided by or under the supervision of a dentist. (42 CFR § 440.100.) Services include the treatment of teeth and the associated structure of the oral cavity and disease, injury, or impairment that may affect the oral cavity or general health of the recipient. (OAS; W-00-11-31135; W-00-12-31135; various reviews; expected issue date: FY 2014; work in progress)

Access to Pediatric Dental Care for Children Enrolled in Medicaid

Quality of Care and Safety. We will review billing patterns of pediatric dentists and their associated clinics in selected States and describe the extent to which children enrolled in Medicaid received services from them. Context—Previous OIG investigations identified numerous vulnerabilities with pediatric dental care, particularly with the care provided by certain for-profit dental chains. OIG investigations have also identified significant problems with access to pediatric dental services. Medicaid covers comprehensive dental care for approximately 30 million low-income children through the EPSDT benefit. Under EPSDT, States must cover dental services and dental screening services for children. (OEI; 02-12-00330; 02-14-00120; various reviews; expected issue date: FY 2014; work in progress)

Utilization of Preventive Screening Services for Children Enrolled in Medicaid (new)

Quality of Care and Safety. We will determine what steps CMS has taken to address OIG’s recommendations to improve the provision of Medicaid EPSDT services and what obstacles it faces in implementing these recommendations. We will also determine whether the underutilization of EPSDT services continues to be a challenge for children enrolled in Medicaid. Context—Previous OIG work found that, in nine States, three out of four children did not receive all required medical, vision, and hearing screenings. OIG made several recommendations to CMS to increase participation in EPSDT screenings and to increase the completeness of medical screenings. (OEI, 05-13-00690; expected issue date: FY 2014; work in progress)

Affordable Care Act- Review of Affordable Care Act Enrollment Safeguards (New)

Affordable Care Act, §1411. We will assess the effectiveness of internal controls in place to ensure that accurate information is used by a marketplace to determine consumer eligibility for enrollment and subsidy payments. The Continuing Appropriations Act (CAA) of 2014, Section 1001(c), requires OIG to submit to the Congress by July 1, 2014, a report regarding the effectiveness of the procedures and safeguards preventing the submission of inaccurate or fraudulent information by applicants for enrollment in a qualified health plan (QHP). Initially, we plan to select the FFM and two SBMs for internal control review. Using a statistically valid sample of applicants, we will review whether each Marketplace has performed all the required verifications to determine eligibility for enrollment in a QHP and for tax credits and cost sharing reductions, and has resolved any inconsistencies through manual verification in accordance with regulations. We plan to expand our reviews to additional SBMs in subsequent work. (OAS; W-00-14-42024; various reviews; expected issue date: FY 2014; work in progress)

Electronic Health Records- Medicare Incentive Payments for Adopting Electronic Health Records

Electronic Health Records. We will review Medicare incentive payments to eligible health care professionals and hospitals for adopting electronic health records (EHR) and the Centers for Medicare & Medicaid Services (CMS) safeguards to prevent erroneous incentive payments. We will review Medicare incentive payment data from 2011 to identify payments to providers that should not have received incentive payments (e.g., those not meeting selected meaningful use criteria). We will also assess CMS’s plans to oversee incentive payments for the duration of the program and actions taken to remedy erroneous incentive payments. Context—Medicare incentive payments are authorized over a 5-year period to physicians and hospitals that demonstrate meaningful use of certified EHR technology. (Recovery Act, §§ 4101 and 4102.) Incentive payments were scheduled to begin in 2011 and continue through 2016, with payment reductions to health care professionals who fail to become meaningful users of EHRs beginning in 2015. (§ 4101(b).) According to Congressional Budget Office (CBO) estimates, CMS’s net spending for incentives will total about $20 billion. (OAS; W-00-13-31352; expected issue date: FY 2014; work in progress; Recovery Act)

Security of Certified Electronic Health Record Technology under Meaningful Use (New)

Electronic Health Records. We will perform audits of various covered entities receiving EHR incentive payments from CMS and their business associates, such as EHR cloud service providers, to determine whether they adequately protect electronic health information created or maintained by certified EHR technology. Context—A core meaningful-use objective for eligible providers and hospitals is to protect electronic health information created or maintained by certified EHR technology through the implementation of appropriate technical capabilities. To meet and measure this objective, eligible hospitals, including critical access hospitals, must conduct a security risk analysis of certified EHR technology as defined in Federal regulations and use the capabilities and standards of Certified Electronic Health Record Technology (CEHRT). (45 CFR § 164.308(a)(1) and 45 CFR §§ 170.314(d)(1) – (d)(9).) Furthermore, business associates that transmit, process, and store EHRs for Medicare/Medicaid providers are playing a larger role in the protection of electronic health information. Therefore, audits of cloud service providers and other downstream service providers are necessary to assure compliance with regulatory requirements and contractual agreements. (OAS; W-04-14-42002; new start; various reviews; expected issue date: FY 2014; Recovery Act)

OCR Oversight of Covered Entities' Compliance with the HIPAA Privacy Rule

Protected Health Information. We will review Office for Civil Rights (OCR) oversight of covered entities’ compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule. We will assess OCR’s oversight of covered entities’ compliance with the Privacy Rule and determine the extent to which Medicare Part B covered entities are complying with selected privacy standards. Context—The Privacy Rule establishes Federal minimum standards for safeguarding individually identifiable protected health information (PHI). The Recovery Act requires that OCR investigate all privacy complaints filed against covered entities if a preliminary investigation indicates willful neglect of the Privacy Rule. Covered entities include health plans, health care clearinghouses, and health care providers that electronically transmit health information in connection with certain HIPAA transactions and technical standards. The Recovery Act also strengthened OCR’s enforcement of the Privacy Rule by increasing the civil monetary penalties for covered entities’ noncompliance. (74 Fed. Reg. 56123.) (OEI; 09-10-00510; expected issue date: FY 2014; work in progress; Recovery Act)