Healthcare News & Insights

2014 OIG work plan: Target list for hospitals

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After a delay because of the government shutdown, the Office of Inspector General (OIG) finally released its Work Plan for this year. It lays out the ongoing audit and enforcement priorities for 2014 — and hospital compliance officers should take notice. 

While some of the heavy hitters may be what you expect, there are a few changes this year, too.

Here’s a rundown of some of the new areas on the OIG’s target list that hospitals have to pay special attention to:

1. New inpatient admission criteria

The OIG will determine the impact of new inpatient admission criteria on hospital billing, Medicare payments and beneficiary payments. This review will also determine how billing varies among hospitals in fiscal year (FY) 2014.

Previously, the OIG found overpayments for short inpatient stays, inconsistent billing practices among hospitals and financial incentives for billing Medicare inappropriately. Due to those issues, new criteria state that physicians should only admit patients for inpatient care if they’re expected to need at least two nights of hospital care. Beneficiaries whose care is expected to last less than two nights should be treated as outpatients.

2. Medicare costs associated with defective medical devices

Medicare claims will be reviewed by the OIG to identify the costs resulting from additional use of medical services associated with defective medical devices and what its impact is on the Medicare Trust Fund.

In the past, the Centers for Medicare & Medicaid Services (CMS) has been concerns about the impact of the cost of replacement devices on Medicare payments for inpatient and outpatient services.

3. Comparison of provider-based & freestanding clinics

Medicare payments for physician office visits in provider-based and free-standing clinics will be reviewed and compared to determine the difference in payments made to the clinics for similar procedures. In addition, the potential impact on the Medicare program of hospitals claiming provider-based status for such facilities will be assessed.

Reason: Provider-based facilities often receive higher payments for some services than freestanding clinics do.

4. Outpatient E/M services billed at new-patient rate

Medicare will examine outpatient payments made to hospitals for E/M services billed at the new patient rate for clinic visits. The OIG will  determine whether the payments were appropriate and whether any recovery of overpayments is required.

This is on the OIG’s target list because preliminary work has found that hospitals used the higher-paying, new patient codes to bill for services to established patients.

Remember, a “new’ patient is one that has not been seen as a registered inpatient or outpatient of the hospital within the past three years.

5. Review of cardiac catheterization and heart biopsies

Previous OIG reviews have identified inappropriate payments when hospitals were paid for separate right heart catheterizations (RHC) procedures when the services were already included in payments for heart biopsies. Therefore, Medicare payments for RHC and heart biopsies billed during the same operative session will be closely scrutinized to determine whether hospitals complied with billing requirements.

6. Oversight of hospital privileging

The OIG will determine how hospitals assess medical staff candidates prior to granting initial privileges, including verification of credentials and review of the National Practitioner Databank. Hospitals that participate in Medicare must have an organized medical staff that periodically appraises its members. A hospital’s governing body must ensure that the members of the medical staff, including physicians and other licensed independent practitioners, are accountable for the quality of care provided to patients. And according to the OIG, robust hospital privileging programs contribute to patient safety.

For a complete copy of the Work Plan click here.

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