Medicare Compliance & Reimbursement

OIG work plan targets inpatient dialysis admissions--and much more.

Now's the time to be certain you're billing correctly for dialysis services.

The HHS Office of Inspector General (OIG) has announced plans to determine whether payments were made for inpatient admissions for dialysis services when the physicians' orders stated the level of care as admission to observation status.

In conjunction with medical reviews conducted by fiscal intermediaries (FI), the OIG has found that some hospitals admitted patients for dialysis treatment, which lasted from 24 to 48 hours, but medical reviewers determined that the stays were for observation rather than treatment.

The physician's order must clearly state the level of care the patient requires, for example, "admission to inpatient status" or "admission to observation status," the OIG says.

Observation services are outpatient services that are paid on an hourly basis and can last up to 48 hours, but inpatient services are paid under a diagnosis-related group (DRG) at a much higher rate, according to the OIG's 2007 Work Plan. Other topics include:

· Inpatient Prospective Payment System Wage Indices. The OIG will determine whether hospital and Medicare controls are adequately ensuring the accuracy of hospital wage data used to calculate wage indices for the inpatient PPS.

Concern over potential inaccuracy stems from the fact that the data used to calculate the indices for many metropolitan statistical areas (MSA) can be significantly influenced by a single hospital. If a significant hospital reports incorrect wage data through its Medicare cost report, that facility could receive incorrect DRG reimbursement and could also lead to incorrect wage indices throughout the MSA, the OIG says.

· Inpatient Hospital Payments for New Technologies. Payments made to hospitals for new services and technologies will come under review this year. The OIG will take a closer look at associated costs and payments for new medical services and technologies meeting the clinical definition of "new." Those services and technologies that are inadequately paid otherwise under the DRG system will be examined to determine whether the reimbursement is appropriate.

· Outpatient Department Payments. Expect a report on whether payments to hospital outpatient departments under the outpatient hospital PPS were made in accordance with Medicare laws and regulations. The OIG plans to study the appropriateness of payments made for multiple procedures, repeat procedures, and global surgeries.

· Outpatient outlier and other charge-related issues. Prepare for the OIG to take a close look at outlier payments to hospital outpatient departments and community mental-health centers. The OIG will be checking to see if these payments were made in accordance with Medicare laws and regulations.

· Unbundling of hospital outpatient services. The OIG suspects hospitals and other providers have been submitting claims for services that should be bundled into outpatient services. The unbundling of services could lead to inappropriate Medicare expenditures.

· "Inpatient only" services performed in an outpatient setting. Denials for "inpatient only" and related services performed in an outpatient setting are another focus of this year's work plan. The OIG will also assess the extent to which Medicare beneficiaries are held liable for denied inpatient claims for these services. Also under scrutiny will be CMS claims processing edits and whether they are effective in ensuring that appropriate payments are made.

· Inappropriate payments for diagnostic x-rays in hospital emergency departments. In 2004, providers performed more than 2.5 million diagnostic x-rays in Medicare-certified hospitals with emergency departments, the work plan says.

And interpretations by emergency department physicians of diagnostic x-rays should not be billed separately, the OIG warns. The OIG plans to determine the extent to which Medicare is inappropriately paying for diagnostic x-rays interpreted by emergency department physicians.

· Oversight of specialty hospitals. CMS also plans to scrutinize patient safety and quality of care at physician-owned specialty hospitals. As part of this review, the OIG will also examine policies related to staffing requirements at these hospitals.

Visit http://oig.hhs.gov/publications/docs/workplan/2007/Work%20Plan%202007.pdf to see the full OIG work plan for 2007.