Medicare Compliance & Reimbursement

Why hospitals, nursing homes, and DMEPOS suppliers are in the limelight.

On Nov. 2, the HHS Office of Inspector General (OIG) published its Fiscal Year (FY) 2016 Work Plan, and some providers are breathing a sigh of relief while others are wringing their hands in anticipation of new areas for concern. Here’s what you can expect from OIG reviews in the coming year.

Hospitals: Your Quality Reporting is Under the Microscope

The OIG has several new initiatives for hospitals in 2016, including studying whether the Centers for Medicare & Medicaid Services (CMS) correctly issued Medicare payments for replaced medical devices (due to defects, recalls, mechanical complications, etc.). Prior OIG reviews have found that Medicare Administrative Contractors (MACs) have made improper payments to hospitals for inpatient and outpatient claims for replaced medical devices.

Another new initiative that the OIG will undertake is reviewing Medicare payments to acute care hospitals to determine whether certain outpatient Part B claims for services provided during inpatient stays were allowable. Specifically, the OIG will look at the items, supplies, and services furnished to inpatients that Medicare covers under Part A and which hospitals should not bill separately to Part B.

Important: The OIG is also taking a fresh look at hospital-submitted quality reporting data, to determine whether CMS has sufficiently validated the hospital inpatient quality reporting data. The quality data in question are those that CMS uses for the hospital value-based purchasing program and the hospital acquired condition reduction program.

Nursing Homes: Watch Your Therapy Billing Practices

New for skilled nursing facilities (SNFs) in 2016 is the OIG’s review of compliance with various aspects of the SNF prospective payment system (PPS). Specifically, based on previous findings of noncompliance, the OIG will investigate SNFs’:

• Payments for therapy that exceed the facility’s cost for therapy;
• Claims for the highest level of therapy, especially when key beneficiary characteristics remained largely the same; and
• Documentation to ensure that claims for care are reasonable and necessary.

Insight: This new focus on nursing home compliance is due to a successful recovery of Medicare payments for therapy in nursing homes, according to attorney Lisa English Hinkle of McBrayer, McGinnis, Leslie & Kirkland PLLC. “Nursing home compliance staff should focus on reviewing documentation to ensure compliance.”

How Orthotic Braces are OIG’s ‘Prime Target’

One new OIG focus for medical equipment and supplies involves orthotic braces — specifically, whether the Medicare fee schedule amounts for orthotic braces are reasonable when compared with non-Medicare payer reimbursement. The Work Plan also includes a new investigation into osteogenesis stimulators, or “bone-growth stimulators,” to determine whether renting the devices instead of acquiring them through a lump-sum purchase could save money for Medicare and beneficiaries.

The OIG plans to crack down on Medicare Part B payments for orthotic braces to determine whether durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers’ claims were medically necessary. Prior reviews revealed that some DMEPOS suppliers billed for services that were medically unnecessary.

Watch Out: With two new major initiatives in the Work Plan, “orthotic braces seem to be a prime target for OIG in 2016,” Hinkle notes. And the new review of the Medicare fee schedule implies “that OIG believes Medicare is getting a raw deal.”

And finally, the OIG will launch a new investigation into billing trends for ventilators, respiratory assist devices (RAD), and continuous positive airway pressure (CPAP) devices from 2011 to 2014. The OIG’s investigation stems from a significant increase in billing for ventilators, especially for pressure support ventilators.

Prescription Drugs: Anticipate Scrutiny of 340B Program

Although not a new effort, the OIG is shifting its focus on prescription drugs under the 340B program, “looking to find ways to bring cost savings through 340B discounts back to Medicare,” Hinkle says. “Eligible healthcare providers are able to purchase prescription drugs at discounted prices under the 340B program, but those providers can then bill Medicare and other insurers for the full price of the drug.”

Additionally, the OIG will start to focus on inappropriate drug pairs under Medicare Part D. These are drugs that clinicians should not prescribe along with other drugs due to the potential for severe interactions and other negative effects.

Physicians & Other Providers: Prepare for a Variety of New Inquiries

The OIG wants to crack down on CMS’s oversight of ambulatory surgical centers (ASCs) as well. The OIG cited previous reviews that found poor CMS oversight and spans of five years or more between certification surveys for some ASCs.

The Work Plan also includes new reviews of Medicare services, supplies, and DME that physicians and non-physician practitioners (NPPs) refer or order for patients. The OIG wants to determine whether CMS made payments correctly for services, supplies and DME, specifically reviewing whether those physicians and NPPs are in fact Medicare-enrolled and legally eligible to refer/order.

Pay attention: And the OIG will review Medicare Part B claims for anesthesia services to find out whether the claims were valid and the beneficiary had a related Medicare service. The OIG will also investigate whether Medicare payments to physicians were appropriate for evaluation and management (E/M) home visits, as well as for prolonged E/M services. Another new OIG initiative for 2016 is a review of payments to histocompatibility laboratories.

The OIG will also take its first look at Accountable Care Organizations (ACOs) that participate in the Medicare Shared Savings Program (MSSP), studying their performance on quality measures and cost savings during the first three years of the program. The watchdog will study the characteristics of those ACOs that performed well on measures and achieved savings, and will identify related strategies and challenges.

The Work Plan includes a first look at CMS’s management of ICD-10 implementation as well. The OIG may review CMS’s and its contractors’ assistance and guidance to hospitals and physicians, as well as assess how the ICD-10 transition is affecting claims processing, including claims resubmissions, appeals, and medical reviews.

Finally, the OIG will conduct mandated reviews of Medicare payments for beneficiaries who are undocumented immigrants, or “unlawfully present beneficiaries,” and for incarcerated beneficiaries. The OIG must submit reports to Congress on both of these issues.

Bottom line: The OIG’s Work Plan gives you a good idea of what to expect in terms of targeted areas. “The OIG is continually investigating and has an arsenal of tools that includes access to Medicare and Medicaid payment data,” Hinkle warns. “Providers should be vigilant about not just fraud and abuse, but also waste and wary of how waste could easily become overpayments — and potential False Claims Act and Stark Law violations.”

Link: To view the entire FY 2016 OIG Work Plan, go to http://oig.hhs.gov/reports-and-publications/archives/workplan/2016/oig-work-plan-2016.pdf .