Healthcare News & Insights

Mid-year OIG Work Plan update: Critical areas for hospitals

The Office of Inspector General (OIG) recently released the mid-year update to its annual Work Plan. And there are several areas the feds are reviewing right now that hospitals need to know about so they can avoid drawing negative attention for compliance issues. 

In the updated Work PlanThinkstockPhotos-467977083, one new area the OIG’s focusing on is outpatient outlier payments.

While the agency’s currently reviewing whether Medicare outlier payments were reconciled and settled correctly, it’s placing a new focus specifically on outpatient outlier payments for short-stay claims. The OIG’s looking at the potential cost savings for Medicare if hospital outpatient short stays were no longer eligible for outlier payments.

Per the OIG, past reviews have shown that hospital’s expensive charges may contribute to excessive inpatient outlier payments. Now the scrutiny’s shifting to outpatient stays.

This review could affect hospitals in several ways. Outlier payments, which are distributed to hospitals when their charges exceed a certain portion of normal Medicare payments, may end up being decreased or abolished entirely. Plus, hospitals can also expect more scrutiny about the costs they charge for services in general – including being pressured to release them publicly.

Another new area the OIG’s reviewing is payments for intensity-modulated radiation therapy, which is an advanced form of radiation that delivers more precise doses to malignant tumors.

Because past reviews found that hospitals weren’t billing for the services correctly, the agency’s looking to see whether payments were made correctly and met all federal requirements.

Ongoing issues

Most of the mid-year update discusses areas the OIG is continuing to review from last fall, including:

  • The “two-midnight rule.” Although the Centers for Medicare & Medicaid Services (CMS) has ditched the controversial pay cuts that originally came with this rule, the feds still plan to review how it’s affected the amount of inpatient and outpatient claims hospitals have submitted for reimbursement. The OIG is comparing claims from the year before the rule went into effect (2013) and the year following its effective date.
  • Inpatient claims for mechanical ventilation. The OIG is looking at claims for mechanical ventilation to make sure hospitals were assigning patients to the appropriate Diagnosis Related Group (DRG) and that the payments for these services were appropriate. Specifically, it’s looking to see that certain DRGs met the timing requirements for Medicare coverage of mechanical ventilation (i.e., patients received at least 96 hours of mechanical ventilation).
  • Contingency plans for electronic health record (EHR) services. In the light of several natural disasters, along with the rise in ransomware and other attacks on hospitals’ networks, the OIG is checking that hospitals are complying with HIPAA requirements for contingency planning if their EHR access is disrupted for any reason. Hospitals must have clear policies and procedures to handle this situation while keeping patients’ protected health information (PHI) secure.
  • Other selected inpatient and outpatient billing requirements. The agency is reviewing payments to hospitals for various services to see if facilities have received overpayments. It’s looking closely to make sure hospitals are meeting billing requirements – and it may require facilities to make paybacks if it determines certain services are routinely overpaid.

How to react

It’s important for hospitals to double-check these areas to make sure there aren’t any hidden problems jeopardizing their compliance. It’s especially crucial with billing and coding, as the OIG’s currently looking at claims of all types.

Regular self-audits of claims and reviews of internal policies can help facilities find and correct any weaknesses before the feds come knocking.

Once the OIG finalizes its new Work Plan in the fall, hospitals may have new compliance trouble spots to watch for. We’ll keep you posted on any changes.

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