November 2004 Newsletter

OIG Work Plan

What to Expect in 2005

By: Catherine Sicker, Compliance Officer, Partner

The Office of Inspector General (OIG) has issued its Work Plan for the upcoming Federal fiscal year. This Plan includes various projects that the OIG hopes to address in 2005. Medicare Drug Reimbursement has been added to the Centers for Medicare & Medicaid Services portion of the Plan. The Plan focuses on audits and evaluations since the OIG's mission is to protect Health and Human Services programs from fraud, waste, and abuse. Here are some excerpts from the CMS portion of the Plan:

Hospitals

• Postacute Care Transfers. The OIG will assess the ability of Medicare contractors to limit payments to acute care hospitals for patients who are discharged from a prospective payment system inpatient hospital and admitted to one of several postacute-care settings. Their prior reviews indicated that a lack of controls had resulted in significant overpayments.
• Consecutive Inpatient Stays. The agency will examine the extent to which Medicare beneficiaries received acute and postacute care through sequential stays at different hospitals.
• Outpatient Cardiac Rehabilitation Services. At the request of CMS, they will attempt to determine whether cardiac rehabilitation services provided by hospital outpatient departments met Medicare coverage requirements.

Medicare Physicians and Other Health Professionals

• Ordering Physicians Excluded from Medicare. This review will quantify the extent of services, if any, ordered by physicians excluded from Federal health care programs and the amount paid by Medicare Part B. During a current review, the OIG identified a significant number of services that had been ordered by excluded physicians.
• Physician Pathology Services. The OIG review will focus on pathology services performed in physicians' offices. They will identify and review the relationships between physicians who furnish pathology services in their offices and outside pathology companies.
• Provider Based Entities. The agency will determine the extent to which health care entities that have been designated as "provider based" are in compliance with requirements for receiving this designation. In prior work, they have found that hospital ownership of physician practices is widespread and that fiscal intermediaries are frequently unaware whether these hospitals are being treated as provider based or freestanding. They will also determine the impact on Medicare reimbursements of entities billing as provider based instead of freestanding.

Other Medicare Services

• Laboratory Services Rendered During an Inpatient Stay. The study will determine the extent to which laboratory services rendered during an inpatient stay are unallowable. The CMS reimbursement for laboratory services is based on two components- physician and technical. The technical component is unallowable under Medicare. The OIG review will determine what percentage of these costs is unallowable.
• Independent Diagnostic Testing Facilities. The agency will review the medical necessity of Medicare services provided to beneficiaries by independent diagnostic testing facilities. Medicare covers diagnostic tests performed by such facilities when the services are medically necessary and satisfy certain criteria. They will determine whether (1) individual facilities provided services for which they had prior approval, (2) the designated level of physician supervision was provided, and (3) the nonphysician personnel who performed the diagnostic tests were properly licensed.
• Emergency Health Services for Undocumented Aliens. The OIG will determine whether the $250 million appropriation enacted by the MMA for emergency health services furnished to undocumented aliens is appropriately distributed to each State and provider and is used for its intended purpose.

More information about the complete Work Plan is available on their web site .