Inspector General announces FY 2002 Work Plan - Surgical Business

Earlier this year, the Office of the Inspector General of the Department of Health and Human Services published its Work Plan for fiscal year 2002 (the "2002 Work Plan"). The agency publishes its Work Plan on an annual basis to provide a description of project areas it perceives as critical to its mission of improving federal healthcare programs and operations, and otherwise protecting against fraud and abuse.

In addition to establishing the investigative priorities for the upcoming year, the Work Plan also indicates that the OIG will be providing additional guidance to healthcare providers and practitioners in fiscal year 2002. The Work Plan states that the OIG anticipates publishing regulations for several new safe harbor exemptions from the anti-kickback statute, and issuing compliance program guidance for ambulance companies, pharmaceuticals companies, and mental health service providers.

Here is a summary of the OIG's investigatory priorities in the 2002 Work Plan that will affect Medicare hospitals:

Medicare Payment Error Prevention Program

The OIG will assess the progress of the Payment Error Prevention Program in reducing hospital payment errors. The program was started in August 1999 with a state-by-state surveillance system that included a sample of approximately 60,000 medical review cases. The OIG plans to use data collected under the program and interviews with beneficiaries and provider organizations related to such errors to identify the nature of payment errors, the actions taken by peer review organizations related to such errors, and the extent of recoupment by fiscal intermediaries.

Medical education payments

The OIG plans to conduct a series of reviews to evaluate the efficiency of control over Medicare payments for medical education. The OIG is concerned about this issue because it found problems in computing full-time equivalents for interns and residents during an initial pilot review at a large hospital.

One-day hospital stays

The OIG plans to study the reasonableness of Medicare inpatient hospital payments for beneficiaries who are discharged after spending only one day in a hospital. This review will focus on the adequacy of controls to detect inappropriate payments for one-day stays.

Hospital discharges and readmissions

The OIG will conduct a series of procedural reviews at selected hospitals, fiscal intermediaries and peer review organizations to examine Medicare claims for beneficiaries who are discharged and subsequently readmitted relatively soon to a PPS hospital. The OIG also will review claim processing procedures to determine whether the existing system of edits for identifying and reviewing diaguoses and/or time-related admissions is effective.

Consecutive inpatient stays

The OIG will examine the extent to which Medicare beneficiaries receive acute and post-acute care through consecutive inpatient stays with different healthcare providers. As part of the review, the OIG will assess CMS's instructions for identifying and evaluating appropriate consecutive beneficiary stays in skilled nursing facilities, long-term care hospitals and PPS-exempt units.

Payments to acute care PPS hospitals

The OIG plans to continue its examination of DRGs that have a history of abusive coding. This study will incorporate the results of the Payment Error Prevention Program's recent review regarding DRGs with significant patterns of coding errors.

Satellite hospitals

This review will determine the extent to which "hospitals-within-hospitals" provide long-term hospital care. The OIG also will examine the effectiveness of payment safeguards related to these entities.

DRG payment limits

The OIG will continue to assess the ability of fiscal intermediaries to limit payments to hospitals for discharged patients who are admitted to post-acute care settings. The OIG is concerned about these payments because prior reviews indicated that a lack of controls has resulted in significant overpayments to providers.

Uncollected beneficiary deductibles and coinsurance

The OIG has conducted a series of reviews regarding the reasonableness of Medicare payments to providers that fail to collect deductible and coinsurance amounts from beneficiaries. Currently, parts of uncollected patient deductible and coinsurance liabilities may be reimbursed by the Medicare program. The OIG plans to assess the impact of such payments and evaluate the effectiveness of existing controls to ensure that they are made only for valid uncollectible patient obligations.

DRG payment window

The OIG plans to conduct several studies regarding the DRG payment window. One study will review the extent of duplicate claims submitted by Part B providers for services that are provided to hospital inpatients. The OIG will conduct another study to determine the extent of preadmission services rendered outside of the 72-hour

DRG payment window, and whether any savings could be realized by expanding the payment window.

Hospital reporting of restraint-related deaths

On July 1, 1999, CMS issued requirements for hospitals to report all patient deaths that may have been caused by the use of restraints or seclusion. The OIG plans to examine hospital compliance with this requirement by reviewing Medicare claims and enrollment data related to such incidents.

Outpatient PPS

The OIG will continue its reviews related to the implementation of the PPS for care provided to Medicare beneficiaries by hospital outpatient departments. The OIG also will study the appropriateness of outlier payments under the outpatient PPS, and otherwise identify any erroneous payment practices.

Outpatient medical supplies at acute care hospitals

The OIG will review the effectiveness of controls to ensure that medical supply services rendered on an outpatient basis are billed and reimbursed in accordance with Medicare requirements. The Work Plan indicates that this review will focus on periods before the implementation of the outpatient PPS.

Procedure coding of outpatient and physician services

The OIG will review the procedure coding of outpatient services billed by a hospital and a physician for the same service. The OIG is concerned about this issue because a previous study indicated a 23 percent inconsistency rate between hospital outpatient departments and physicians in coding for the same service.

Peer review organization sanction authority

This study will determine the types of providers and violations over which the OIG believes PROs should have sanctioning responsibility and authority.

Editor's Note: This article was originally published in Health Law Alert, Fall 2001, a publication of Ober/Kaler, P.C., Baltimore, MD. Mr. Wells can be reached at 410-347-7350 or at rawells@ober.com.

COPYRIGHT 2002 Nelson Publishing
COPYRIGHT 2002 Gale Group