• Office of the Inspector General Releases its Work Plan for FY 2008
  • October 19, 2007 | Author: James B. Riley
  • Law Firm: McGuireWoods LLP - Chicago Office
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    The Department of Health and Human Services Office of the Inspector General (OIG) recently released its Work Plan for FY 2008, which describes the activities that the OIG will continue and initiate in 2008 regarding the programs and operations of the Department of Health and Human Services (HHS). For those in the health care industry, the Work Plan provides some insight into areas of concern which may potentially lead to future investigations by the OIG. Some of the areas of the Work Plan that McGuireWoods has identified should be of particular interest to hospitals, physicians, and renal dialysis facilities are summarized below.

    Medicare Hospitals. The OIG stated that it will review Medicare inpatient capital payments and whether these payments, which are used by hospitals to pay for assets, such as equipment and facilities, are being calculated appropriately by hospitals. Also, the OIG will analyze whether reimbursements under Medicare paid to organ procurement organizations, which retrieve, preserve, and transport transplant organs, are being properly paid under the Medicare regulations. Further, according to the Work Plan, the OIG will evaluate Medicare reimbursement of hospitals for bad debts under 42 CFR § 413.89 to assess specifically whether these payments were appropriate under Medicare regulations and whether the prior year’s write-offs were properly used to reduce the cost of beneficiary service when they were made. Finally, the OIG will examine patient safety in physician-owned specialty hospitals, which have been a concern of Congress in recent years due to the proliferation of specialty hospitals in the United States.

    Medicare Physicians and Other Health Professionals. First, the OIG will consider whether payment for certain evaluation and management services provided by surgeons, which are now reimbursed by Medicare as part of a global surgery fee, should be altered from the original model developed in 1992 and be paid separately from the global surgery fee. Also, the OIG stated that it will review whether Medicare Part B payments are appropriate for certain physician services, such as surgery, consultation, and home, office or institutional calls, specifically determining if payments for services are made according to Medicare requirements. Next, the OIG will investigate whether Medicare providers are “balance billing” beneficiaries, that is, charging them in excess of Medicare allowed amounts, and whether beneficiaries are aware of this practice. The Work Plan also describes a focus on business arrangements related to magnetic resonance imaging (MRI) services to evaluate if certain business arrangements affect the levels of physicians’ utilization of MRI services. Finally, the OIG will investigate a national sample of physicians to learn if physicians are reassigning their benefits to other entities without complying with the safeguards required by Medicare regulations.

    Medicare Part B Drug Reimbursement. The OIG has stated it will analyze drug manufacturers’ methodologies for calculating average sale price, which is used to determine Medicare Part B reimbursement for classes of drugs. The OIG believes this assessment will provide government officials with information about whether manufacturers’ calculations complied with the requirements of the Medicare Modernization Act. Next, the OIG, using renal dialysis facilities’ patient records, which the facilities are required to update by law, will examine whether the claims submitted for Epogen administration were supported by the patient treatment records and whether they were billed properly. Epogen is an engineered protein used in dialysis facilities to treat anemia, which is common in patients with chronic renal failure. Finally, the OIG has discovered that Medicare payments for chemotherapy drug administration services had risen 217 percent between 2003 and 2004, while payments for the chemotherapy drugs themselves only rose 4 percent. Thus, the OIG will investigate a sample of claims to assess whether providers are billing only for the chemotherapy administration services and not the drugs.

    Medicare Part D Administration. First, the OIG will review duplicate payments under Part B and Part D for prescription drugs. The OIG will inspect CMS’s procedures for preventing these duplicate payments. Next, the OIG will identify aberrant claims, those that deviate from usual claims, and assess how they relate to pharmacies, physicians, and/or beneficiaries. HHS has the authority to audit prescription drug plans’ records about payments to the plans, and the OIG will use that authority to determine the source of aberrant claims. Regarding prescription drug pricing, OIG will compare prices of a sample of drugs to determine the amount paid for the drugs under Medicare Part D to the amount paid for the same drugs under Medicaid, as many beneficiaries of Medicare Part D at one time received coverage under the Medicaid program. OIG is concerned about consistency between the programs. Finally, according to federal Regulations, prescription drug plans have a duty to institute a system to detect, correct, and prevent Part D fraud and abuse. The OIG will review the compliance plans to determine how much fraud has been detected by the plans in order to alleviate future fraud and abuse.

    Renal Dialysis Related Services. CMS’s policy manual states that renal dialysis treatments are usually covered under Medicare as outpatient services, but may be covered as inpatient services under certain circumstances. OIG will compare Medicare payments to hospitals for admission of dialysis patients under observation status, under which the patient is typically treated as an outpatient and payments for dialysis treatment as an inpatient. This comparison is crucial because inpatient care services are paid at a higher rate, and observation status is only covered when it is appropriately ordered by a physician or other properly licensed individual. Next, the OIG will review payment policies for automated multichannel chemistry (AMCC) tests given to end stage renal disease (ESRD) patients. Certain AMCC tests are currently included in the composite rate, or bundled rate paid to providers. The OIG, in past reviews, has concluded that providers are being paid separately for AMCC tests that are includable in the composite rate, and it wants to assure that procedures are in place to prevent this. Finally, the OIG will assess the extent to which ambulance services are used to transport ESRD patients to renal dialysis centers in order to determine whether ambulance services should be part of a bundled prospective payment system for ESRD patients. In making this determination, the OIG will also consider the population using the ambulance services, the feasibility of dialysis facilities to contract with ambulance service providers, and the coverage policies of other health insurance programs.

    Again, understanding the OIG’s Work Plan is critical for those in the health care industry because it details potential areas of concern of government regulators.