OIG Work Plan Darci Friedman, Director of Regulatory Products Lynne Rinehimer, Sr. Healthcare Solutions Consultant

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1 OIG Work Plan 2014 Darci Friedman, Director of Regulatory Products Lynne Rinehimer, Sr. Healthcare Solutions Consultant

2 Agenda Introduction to, and how to interpret, the OIG Work Plan Review of Hospital project areas Review of Non-Hospital project areas Other Providers and Suppliers Nursing Homes Home Health Hospice Question and Answer

3 The OIG Work Plan The Office of Inspector General (OIG) is responsible for protecting the integrity of Department of Health and Human Services (HHS) programs through audits, investigations and evaluations OIG is the enforcement agency under HHS OIG issues several types of documents, pursuant to its oversight authority, including reports based upon the audits and inspections conducted Work Plan provides a description of areas of focus ( project areas ) for the OIG in the coming year to combat fraud and abuse in HHS programs

4 Interpreting the Work Plan Describes the primary objectives for each project area in a short paragraph Indicates the year in which the OIG expects one or more reports to be issued based upon the work identified in the project area

5 Hospital Project Areas

6 Carry Over Project Areas - Hospitals Reconciliations of Outlier Payments Impact of Provider-Based Status on Medicare Billing* Critical Access Hospitals Payment Policy for Swing-Bed Services Critical Access Hospitals Beneficiary Costs for Outpatient Services Long Term Care Hospitals Billing Patterns Associated with Interrupted Stays* Inpatient Claims for Mechanical Ventilation* Selected Inpatient and Outpatient Billing Requirements Duplicate Graduate Medical Education Payments* Outpatient Dental Claims* Participation in Projects with Quality Improvement Organizations Inpatient Rehabilitation Facilities Adverse Events in Post-Acute Care for Medicare Beneficiaries* * - has a question set

7 New Project Areas - Hospitals New Inpatient Admission Criteria* Medicare Costs Associated with Defective Medical Devices Analysis of Salaries Included in Hospital Cost Reports* Comparison of Provider-Based and Free-Standing Clinics Outpatient Evaluation and Management Services Billed at the New-Patient Rate* Nationwide Review of Cardiac Catheterization and Heart Biopsies* Payments for Patients Diagnosed with Kwashiorkor* Bone Marrow or Stem Cell Transplants* Indirect Medical Education Payments* Oversight of Pharmaceutical Compounding* Hurricane Sandy Case Study of Hospitals Emergency Preparedness and Response* Oversight of Hospital Privileging* * - has a question set

8 Analysis of Salaries Included in Hospital Cost Reports Certain compensation is allowable in provider costs: managerial, administrative, professional, and other services related to the operation of the facility that is furnished in connection with patient care Executive pay is now under the microscope U.S. Nonprofit Hospital CEO Annual Pay Averages $600,000 (see Should quality be a factor? Current standard for owner compensation: Compensation should be reasonable, i.e., such an amount as would ordinarily be paid for comparable services by comparable institutions depending upon the facts and circumstances of each case

9 Outpatient E&M Services Billed at the New-Patient Rate A new patient is one who has not registered as an inpatient or outpatient of the hospital within the three years prior to a visit An established patient is one who has registered as an inpatient or outpatient of the hospital within the three years prior to a visit Hospitals should operationalize the three year criterion for clinic visit billing purposes Evaluation and Management codes through (the new patient codes) should be monitored to ensure that established patients are not billed as new patients CWF edit implemented on October 7, 2013 to validate that there are not two new patient CPT s being paid within a three year period of time RAC Issue: Performant (A ); Connolly (C ); DCS (A ); HDI (D )

10 Indirect Medical Education Payments Hospitals that have residents in an approved graduate medical education (GME) program receive an additional payment for a Medicare discharge to reflect the higher patient care costs of teaching hospitals relative to non-teaching hospitals This is known as the indirect medical education (IME) adjustment Formula involves the ratio of residents to beds Count the number of available bed days during the cost reporting period and divide that number by the number of days in the cost reporting period Certain bed days/beds are excluded: non-ipps beds, those used for outpatient observation, nursery beds, custodial care beds, etc. No resident may count as more than one full time employee (FTE) Certain resident work is excluded: research or working in non-ipps areas

11 Oversight of Hospital Privileging Privileging is the process whereby hospital management determines whether a practitioner is qualified to perform specific medical functions at its facility Credentialing is the process whereby hospital management evaluates and verifies the training and experience of practitioners to determine their current competence and skills Hospitals must have a privileging process and they must periodically appraise the credentials of all medical staff CMS recommends every 24 months, unless required more frequently by State law At a minimum, the hospital must confirm evidence of current licensure, evidence of training and professional education, documented experience, and supporting references of competence This includes checking the National Practitioner Databank

12 Hurricane Sandy Case Study of Hospitals Emergency Preparedness and Response OIG will be assessing the emergency preparedness and response by hospitals affected by Hurricane Sandy Broader applicability for hospitals across the country: Ensuring compliance with CMS Conditions of Participation that address emergency preparedness 42 CFR Physical Environment 42 CFR Emergency Services CMS Survey and Certification Emergency Preparedness Checklist

13 New Inpatient Admission Criteria Also known as the 2 midnight rule In August 2013, CMS issued a final rule for determining inpatient status in an acute care hospital Establishes that a physician should order an inpatient admission if they expect that the patient s stay will be at least 2 midnights Auditors will be looking to physician orders, certification, and medical record documentation in determining that the inpatient stay was reasonable and necessary Recently announced that implementation of the rule will be delayed until October 2014 CMS is instructing recovery auditors to wait until October 1 to begin looking at short inpatient stays

14 Bone Marrow or Stem Cell Transplants Prior OIG reviews identified hospitals that incorrectly billed for bone marrow or stem cell transplants Two types of stem cell transplants: Stem cells or bone marrow acquired from a donor (allogeneic) Stem cells or bone marrow restored from the patient s harvested cells (autologous) Transplantation is covered by Medicare only for specific diagnoses Hospitals may only bill acquisition charges for allogeneic transplants National Coverage Determination for Stem Cell Transplantation ( ) RAC Issue: DCS (A ); Connolly (C )

15 Oversight of Pharmaceutical Compounding Pharmaceutical compounding is the creation of a prescription drug tailored to meet the needs of an individual patient If appropriate precautions and practices are not implemented, there is a risk of contamination National meningitis outbreak in 2012 linked to compounding pharmacy more than 700 illnesses and 64 deaths in 20 states Most hospitals do at least some pharmaceutical compounding on site, while also maintaining outsourcing arrangements with outside pharmacies April 2013 OIG report found that hospitals that outsourced compounded sterile preparations (CSPs) took limited steps to ensure their quality (OEI )

16 Nationwide Review of Cardiac Catheterization and Heart Biopsies OIG reviews have uncovered billing issues when right heart catheterization (RHC) is conducted during the same operative session as heart biopsy (A ) Medicare will not pay for the RHC unless it is separate and distinct from the heart biopsy Emphasis on appropriate use of modifier -59 (distinct procedural service) Educate staff on appropriate usage Inclusion of supporting medical record documentation

17 Payment for Patients Diagnosed with Kwashiorkor Kwashiorkor is a form of severe protein malnutrition that generally affects children in developing countries during times of famine In 2009, a California hospital reported that 16.1% of its Medicare patients 65 or older suffered from kwashiorkor (state average was 0.2%) In calendar years 2010 and 2011, Medicare paid $711 million to hospitals for kwashiorkor claims, prompting OIG investigations Three 2014 OIG reports addressing compliance with kwashiorkor billing requirements (A , A , A ) combined overpayments of over $440,000 How hospitals can better ensure compliance: Develop documentation guidelines and clinical criteria addressing malnutrition Ensure appropriate documentation in medical record through education of physicians and coders, and monitoring of records Develop process for coders to query physicians Ensure coding software is updated and has appropriate controls for billing kwashiorkor

18 Non-Hospital Project Areas

19 Carry Over Project Areas - Other Providers/Suppliers Ambulatory Surgical Centers Payment System ESRD Facilities Payment System for Renal Dialysis Services and Drugs Rural Health Clinics Compliance with Location Requirements Ambulance Services Questionable Billing, Medical Necessity, and Level-of-Transport* Anesthesia Services Payments for Personally Performed Services* Chiropractic Services Part B Payments for Noncovered Services* Diagnostic Radiology Medical Necessity of High-Cost Tests* Electrodiagnostic Testing Questionable Billing* Evaluation and Management Services Inappropriate Payments* Imaging Services Payments for Practice Expenses Laboratory Tests Billing Characteristics and Questionable Billing Ophthalmologists Questionable Billing* Partial Hospitalization Programs Services in Hospital Outpatient Departments and CMHCs* Physicians and Suppliers Noncompliance with Assignment Rules and Excessive Billing of Beneficiaries* Physicians Place-of-Service Coding Errors* Physical Therapists High Utilization of Outpatient Physical Therapy Services* Sleep Disorder Clinics High Utilization of Sleep-Testing Procedures* * - has a question set

20 New Project Areas - Other Providers/Suppliers Ambulance Services Portfolio Report on Medicare Part B Payments Chiropractic Services Portfolio Report on Medicare Part B Payments Chiropractic Services Questionable Billing and Maintenance Therapy* Portable X-Ray Equipment Supplier Compliance with Transportation and Setup Fee Requirements* End Stage Renal Disease Dialysis Facility Survey Cycle Mental Health Providers Medicare Enrollment and Credentialing * - has a question set

21 Chiropractic Services Questionable Billing and Maintenance Therapy Chiropractic services-focused project areas have been in the Work Plan since 2012 (three are in the 2014 Work Plan) 2009 OIG report found Medicare inappropriately paid $178 million for chiropractic services that were medically unnecessary, incorrectly coded, or undocumented (OEI ) November 2013 OIG report found 93% claim error rate for one provider (A ) Claims may not be submitted for chiropractic maintenance therapy AT modifier must not be placed on claims when maintenance therapy has been provided Chiropractor must specify the precise level of subluxation to substantiate a claim for manipulation of the spine CPT code must be selected based on the number of regions of the spine that were treated

22 Portable X-Ray Equipment Supplier Compliance with Transportation and Setup Fee Requirements New project area, but similar in focus to 2011 Work Plan project area (Billing of Portable X-Ray Suppliers) 2011 OIG report found Medicare paid approximately $12.8 million for return trips to nursing facilities (OEI ) Supplier must ensure: If it makes repeat trips to the same location on the same date of service, it documents the medical necessity of the repeat trips Transportation component is billed only when the equipment used was actually transported to the location where the x-ray was taken If the equipment is used for more than one patient at the same location, it uses billing code R0075 for each patient with the appropriate modifier to specify the number of patients receiving the services Setup fee is billed under HCPCS code Q0092 for each radiological procedure performed, other than retakes, for both single and multiple patient trips

23 Project Areas Nursing Homes New: Medicare Part A Billing by Skilled Nursing Facilities* Carry Over: Questionable Billing Patterns for Part B Services During Nursing Home Stays* State Agency Verification of Deficiency Corrections Program for National Background Checks for Long-Term-Care Employees* Hospitalizations of Nursing Home Residents for Manageable and Preventable Conditions* * - has a question set

24 Medicare Part A Billing by Skilled Nursing Facilities Identified as New but appeared in 2011 and 2012 Work Plans as an area on which the OIG would focus Report issued OEI Focus on Therapy RUGs (resource utilization groups) because the payment is higher than non-therapy RUGs For concurrent and group therapy sessions, SNFs must allocate portion of the total therapy minutes to each beneficiary when determining the RUG Complete a COT (change of therapy) assessment when the amount of therapy no longer reflects the RUG Complete an EOT (end of therapy) assessment when therapy has been discontinued for 3 consecutive days RAC Issues: Several on MDS accuracy, documentation (Coding Validation)

25 Project Areas Home Health No new Home Health project areas in 2014 Work Plan Carry Over: Home Health Prospective Payment System Requirements* Employment of Individuals with Criminal Convictions* * - has a question set

26 Project Areas - Hospice New: Hospice in Assisted Living Facilities* Carry Over: Hospice General Inpatient Care* * - has a question set

27 Hospice in Assisted Living Facilities Prior focus on relationships between SNFs and Hospices 82% of claims for beneficiaries residing in nursing facilities did not meet coverage requirements OEI Beneficiary must be entitled to Part A benefits and certified as having a terminal illness with a life expectancy of 6 months or less if the disease runs its normal course (care is palliative not curative) Beneficiary must elect hospice care and waives right to payment for services related to illness Two 90-day periods and unlimited 60-day periods Best practice to monitor claims exceeding 180 days Consider analyzing whether you are a high-percentage hospice RAC Issue: Performant (A ); Connolly (C ) (NF)

28 Where to Access the Work Plan Plan-2014.pdf In the Compliance & Regulation Suite, OIG - FR, Reports, Advisory Opinions, CPGs, Fraud Alerts, Work Plans Library

29 Q & A Darci Friedman, JD, CHPC, CSPO Director of Regulatory Products darci.friedman@wolterskluwer.com Lynne Rinehimer, JD Sr. Healthcare Solutions Consultant lynne.rinehimer@wolterskluwer.com

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