November 2007 Newsletter

Sneak Preview for 2008

By:  Corporate Compliance Officer

The Department of Health and Human Services Office of Inspector General (OIG) has published its 2008 Work Plan which sets forth the audits, evaluations, and inspections to be performed by the Office of Audit Services, Office of Evaluation and Inspections, Office of Investigations, and the Office of Counsel to the Inspector General for the upcoming fiscal year. The Plan identifies areas of concern that the OIG perceives as critical to its mission to improve the Department of Health and Human Services' programs and operations by protecting against fraud, waste, and abuse.

Medicare Hospitals

• Critical Access Hospitals (CAH). The OIG will determine if CAHs have met the CAH classification criteria set forth in the Social Security Act and conditions of participation set forth at 42 CFR 485 subpart F and if payments made to CAHs were made in accordance with Medicare requirements. CAHs are generally paid at 101 percent of the reasonable cost of providing CAH services.
• Provider Bad Debts. They will review Medicare bad debts claimed by acute care inpatient hospitals, long term care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, and skilled nursing facilities to determine whether they were reimbursable. Uncollectible debts related to unpaid deductible and coinsurance amounts may be claimed as Medicare bad debt if specific criteria are met.
• Medicare Secondary Payer. The agency will review Medicare payments for beneficiaries who have other insurance. Medicare payments for such beneficiaries are required to be secondary to certain types of insurance coverage. They will assess the effectiveness of current procedures in preventing inappropriate Medicare payments for beneficiaries with other insurance coverage. For example, the OIG will evaluate procedures for identifying and resolving credit balance situations, which occur when payments from Medicare and other insurers exceed the providers’ charges or the allowed amount.

Medicare Physicians and Other Health Professionals

• Place of Service Errors. The OIG will review physician coding of place of service on claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments. Federal regulations provide for different levels of payments to physicians depending on where the services are performed. 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 ASC.

Other Medicare Services

• Ambulance Services Used To Transport End Stage Renal Disease (ESRD) Beneficiaries. The agency will review the extent to which ambulance services are used to transport ESRD beneficiaries to and from dialysis facilities. Furthermore, the Medicare Modernization Act (MMA) requires the Secretary of Department of Health and Human Services (HHS) to develop a report on a bundled Prospective Payment System (PPS) for ESRD services. The bundled PPS for ESRD services generally does not provide for ambulance services. They will examine factors such as the percent of the population using ambulance services, the feasibility of freestanding facilities to contract with ambulance suppliers, and the coverage policies of other health insurance programs.
• Pricing of Clinical Laboratory Tests. They will review Medicare payment rates for certain laboratory tests and compare them with the rates of other Federal, State, and private plan payers. The Social Security Act requires the establishment of a payment fee schedule for physician services, including clinical diagnostic laboratory tests. The OIG will also determine the extent of variation in payment rates among contractors. Prior OIG work found that Medicare paid significantly higher prices than other payers for certain laboratory tests.
• Ambulatory Surgical Center Payment System. The OIG will review the appropriateness of the methodology for setting the ASC payment rates under the revised ASC payment system. The MMA requires the Secretary of HHS to implement a revised payment system for payment of surgical services furnished in ASCs, which the Secretary is required to revise no later than January 1, 2008. They will examine changes to the new ASC payment system and the rate-setting methodology used to calculate the ASC payment rates.

See the 2008 Work Plan for more information.