Member Login | About | Contact
American Association of Oral and Maxillofacial Surgeons

Practice Management & Allied Staff News & Materials

2014 Office of Inspector General Work Plan

February 16th, 2015

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 2015 fiscal year. Below are direct excerpts from the 2015 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

Policies and Practices. The OIG will determine the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary copayments. This review will also determine how billing varied among hospitals in FY 2014. Previous OIG work identified millions of dollars in overpayments to hospitals for short inpatient stays that should have been billed as outpatient stays. 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 (known as the "two midnight policy"). Beneficiaries whose care is expected to last fewer 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 2016)

Hospitals- Medicare oversight of provider-based status

Policies and Practices. The OIG will determine the extent to which provider-based facilities meet CMS’s criteria. Provider-based status allows facilities owned and operated by hospitals to bill as hospital outpatient departments. Provider-based status can result in higher 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; expected issue date: FY 2015)

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. 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‐00‐14‐35603; various reviews; expected issue date: FY 2015)

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

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 will recommend recovery of overpayments. 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 E/M 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-00-14-35627; expected issue date: FY 2015)

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. We 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. 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-00-13-35423; W-00-14-35423; various reviews; expected issue date: FY 2015)

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 anesthesia services reported on a claim with the "AA" service code modifier met Medicare requirements. 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 service code modifier on the claim as if services were personally performed by an anesthesiologist 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).)

Diagnostic Radiology—Medical Necessity of High-Cost Tests

Billing and Payments. The OIG We will review Medicare payments for high-cost diagnostic radiology tests to determine whether the tests were medically necessary and to determine the extent to which use 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-00-13-35454; W-00-14-35454; various reviews; expected issue date: FY 2015)

Imaging services—Payments for practice expenses

Billing and Payments. The OIG will review Medicare Part B payments for imaging services to determine whether they reflect the expenses incurred and whether the utilization rates reflect industry practices. For selected imaging services, we will focus on the practice expense components, including the equipment utilization rate. Practice expenses may include office rent, wages, and equipment. Physicians are paid for services pursuant to the Medicare physician fee schedule, which covers the major categories of costs, including the physician professional cost component, malpractice insurance costs, and practice expenses. (Social Security Act, § 1848(c)(1)(B).) (OAS; W-00-13-35219; W-00-14-35219; various reviews; expected issue date: FY 2015)

Physicians: Place-of-Service Errors

Billing and Payments. The OIG will review physicians’ coding on Medicare Part B claims for services performed in ASCs and hospital outpatient departments to determine whether they properly coded the places of service. Prior OIG reviews determined that physicians did not always correctly code nonfacility 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 nonfacility 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 ASC. (OAS; W-00-13-35113; W-00-14-35113; various reviews; expected issue date: FY 2015)

Covered Uses for Medicare Part B Drugs

Quality of Care and Safety. The OIG will review the oversight actions that 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. 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 FDA, 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. (Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 15, § 50.4.2.) (OEI; 03-13-00450; expected issue date: FY 2015)

Enhanced Enrollment Screening Process for Medicare Providers

Provider Eligibility. The OIG 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 ACA, § 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. 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 site visits, fingerprinting, and background checks, as well as an automated provider screening process. (OEI; 03-13-00050; expected issue date: FY 2015; ACA.)

Risk Assessment of CMS’ Administration of the Pioneer Accountable Care Organization Model (new)

New Models. The OIG will conduct a risk assessment of the Pioneer Accountable Care Organization (ACO) Model. An ACO is a group of providers and suppliers of services (e.g., hospitals and physicians and others involved in patient care) that will work together to coordinate care for the Medicare fee-for-service beneficiaries they serve. The Centers for Medicare & Medicaid Innovation was created to test innovative care and service delivery models and is administering the Pioneer ACO Model. (ACA, §3021.) We will conduct a risk assessment of internal controls over administration of the Pioneer ACO Model. (OAS; W-00-00-00000; expected issue date: FY 2015; ACA)

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

Policies and Practices. The OIG will determine whether opportunities exist for lowering Medicaid payments for some 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. 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; W-00-15-31390; various reviews; expected issue date: FY 2015)

Dental Services for Children—Inappropriate Billing

State Claims. The OIG will review Medicaid payments by States for dental services to determine whether States have properly claimed Federal reimbursement. 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-00-13-31135; various reviews; expected issue date: FY 2015)

Access to Pediatric Dental Care for Children Enrolled in Medicaid

Quality of Care and Safety. The OIG 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 dental services in these States. In recent years, a number of dental providers and chains have been prosecuted for providing unnecessary dental procedures and causing harm to Medicaid children. In addition, children’s access to dental services has been a longstanding Medicaid problem. Medicaid covers comprehensive dental care for approximately 37 million low-income children through the EPSDT benefit. Under EPSDT, States must cover dental services and dental screening services for children. (OEI; 02-14-00480; 02-14-00490; various reviews; expected issue date: FY 2015)

Utilization of Preventive Screening Services for Children Enrolled in Medicaid

Quality of Care and Safety. The OIG will determine what steps CMS has taken to address OIG’s recommendations to improve the provision of Medicaid EPSDT services. We will also determine whether the underuse of EPSDT services continues to be a challenge for children enrolled in Medicaid. 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 2015)

Review of Affordable Care Act enrollment safeguards at additional State marketplaces (new)

ACA, § 1411. In FY 2014, OIG issued two reports that identified vulnerabilities in eligibility and enrollment systems at the FFM and State-based marketplaces. Our new work will assess the effectiveness of internal controls in place at seven State-based marketplaces to ensure that accurate information is used to determine consumer eligibility for enrollment and financial assistance payments. We will determine whether internal controls implemented by the selected marketplaces were effective in ensuring that individuals were enrolled in a qualified health plan (QHP) according to Federal requirements. Using a statistically valid sample of applicants, we will review whether each marketplace has performed the required verifications to determine eligibility for enrollment in a QHP and has appropriately resolved inconsistencies between applicant information and data sources used for verification. (OAS; W-00-14-42024; various reviews; expected issue date: FY 2015)

Medicare incentive payments for adopting electronic health records

Adoption of Electronic Health Records. The OIG will review Medicare incentive payments to eligible health care professionals and hospitals for adopting EHRs 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 corrective actions taken regarding erroneous incentive payments. 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).) As of August 2014, Medicare EHR incentive payments totaled more than $16 billion. (OAS; W-00-14-31352; expected issue date: FY 2015; Recovery Act)

Security of Certified Electronic Health Record Technology under Meaningful Use

Systems and Information Security. The OIG 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. A core meaningful-use objective for eligible providers and hospitals is to protect electronic health information created or maintained by certified EHR technology by implementing 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. (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 and 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 ensure compliance with regulatory requirements and contractual agreements. (OAS; W-00-14-42020; W-00-15-42020; various reviews; expected issue date: FY 2015; Recovery Act)