Healthcare News & Insights

2017 OIG Work Plan: What’s critical for hospitals

The Office of Inspector General (OIG) has released its annual Work Plan. The updated Work Plan has several new areas of focus that hospitals must know for the new year to avoid federal scrutiny and stay in compliance. 

Make sure your facility’s compliance team is aware of the following changes in the 2017 Work Plan – along with some perennial areas of interest.

Hyperbaric oxygen therapy

If your hospital gives patients hyperbaric oxygen therapy, be warned: The OIG has its eyes on this procedure.

Hyperbaric oxygen therapy involves administering high concentrations of oxygen to patients in a pressurized chamber. Typically, it’s given to patients who have certain kinds of wounds that aren’t healing. Medicare will only reimburse facilities for this service if the patient meets one of 15 covered conditions.

According to information in the Work Plan, in previous years, the OIG reviewed claims for hyperbaric oxygen therapy and uncovered serious issues, such as:

  • beneficiaries receiving the treatment for conditions that aren’t covered
  • inadequate documentation to support the treatments, and
  • patients receiving more treatments than were medically necessary.

Now, the OIG’s taking another close look at claims for hyperbaric oxygen therapy to make sure they were reimbursed correctly according to federal law – and that providers who billed the treatment followed all documentation and medical necessity requirements.

Medicaid patient days

Another new area of focus involves Medicaid patient days and how they affect a disproportionate share of hospital payments. Medicare provides additional supplementary payments to hospitals that serve a disproportionate share of low-income patients. The amount facilities receive is based on the number of Medicaid patient days they report to Medicare, along with several other contributing factors.

Because distributing these payments correctly can be complicated, the OIG’s reviewing Medicare cost reports to make sure hospitals are receiving proper payments based on their reported Medicaid patient days. The agency is also double-checking that hospitals submitted this information properly.

The OIG’s also looking at payments for inpatient psychiatric therapy – specifically trying to find any claims with outlier payments, which are extra payments given for extremely costly patients in dire condition.

Here’s why: From fiscal year 2014 to fiscal year 2015, the number of inpatient psychiatric claims with outlier payments increased by 28%, and Medicare payments for these stays increased from $450.2 million to $534.6 million – a 19% difference.

Because that increase is unusual, the OIG is checking whether inpatient psychiatric facilities that billed claims with outlier payments followed all applicable Medicare documentation, coding and coverage requirements when reporting these services.

Intensive therapy at rehab hospitals

It’s crucial for your providers to take caution about recommending patients for intensive therapy at an inpatient rehabilitation facility, because this is another area the OIG’s scrutinizing in 2017.

While conducting an unrelated medical review, the OIG noticed that there were some instances where patients who were admitted to inpatient rehab hospitals for intensive therapy weren’t actually suited for the therapy at all.

Covering these hospital stays and associated treatments can be costly for Medicare and other payors, so the OIG plans to look at a sample of rehab hospital admissions and see whether patients actually participated in intensive therapy during their stay.

If they did, the agency will examine whether it improved their condition. If they didn’t, the OIG plans to find out why, in hopes that hospitals can take steps to recommend better alternatives for these patients.

Ongoing scrutiny

Along with these new areas, the OIG still plans to examine several past areas of focus, some of which were introduced in last year’s Work Plan.

For 2017, the agency’s revised its review of outpatient payments for intensity-modulated radiation therapy to see whether hospitals are billing correctly for the services included in this treatment.

Other areas that are still in the OIG’s crosshairs include:

  • outpatient outlier payments for short-stay claims
  • hospitals’ use of outpatient and inpatient stays under the “two-midnight” rule
  • reconciliations of outlier payments
  • payments given to provider-based facilities and free-standing clinics, and
  • costs associated with defective medical devices.

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