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Fresh Start Priorities

New Initiatives Targeted by the OIG's 2007 Work Plan

Client Advisory

By Sandi Toll
Jenner & Block

The Office of the Inspector General (OIG) for the United States Department of Health and Human Services (HHS) recently issued its Work Plan for the 2007 fiscal year. The Work Plan outlines the OIG's investigative and enforcement concerns in order to highlight vulnerabilities and promote improvement in various HHS programs. As the OIG will address these concerns through a variety of audits, inspections, investigations and litigation, the Work Plan provides a helpful guide for identifying possible compliance issues that will be subjected to increased scrutiny in 2007.

The following is a brief sample of the OIG's "new start" priorities for the 2007 fiscal year. These issues are particularly important to health care providers dealing with Medicare and Medicaid compliance issues. For more information, the Work Plan is available in its entirety here.

I. Priorities for Hospitals and Nursing Homes

•	The OIG will examine whether Medicare inpatient capital payments were used for their intended purposes.
•	The OIG will determine if Medicare payments are appropriately denied for "inpatient only and related services" performed in an outpatient setting, and also assess the extent to which Medicare beneficiaries are held liable for denied inpatient claims for these services.
•	The OIG will analyze hospital claims to identify health care providers exhibiting unusual Diagnosis Related Group services (DRGs) patterns, and then determine the medical necessity, appropriate coding levels, and reimbursement for services billed by these providers. The DRG system is subject to abuse by providers who inappropriately increase their reimbursement by "upcoding."
•	The OIG will determine the extent of inappropriate payments made for interpreting diagnostic x-rays performed in hospital emergency departments.
•	The OIG will examine State Medicaid claims data to determine whether Medicaid made duplicative payments to nursing facilities and hospitals for the same patients and whether these entities were also receiving payments for discharged patients.

II. Priorities for Health Care Professionals

•	The OIG will examine whether CMS's (Center for Medicare and Medicaid Services) systems are able to identify and prevent payment for potential duplicative claims for physical therapy reimbursement submitted by health care providers.
•	The OIG will examine the extent to which providers are billing beneficiaries in excess of amounts allowed by Medicare requirements. In conjunction with this evaluation, the OIG will also monitor beneficiary awareness of their rights and responsibilities regarding Medicare billing violations and coverage guidelines.
•	The OIG will determine whether providers are properly billing Medicare for inpatient psychiatric services. Some providers are more likely to bill a session as an "individual session" because they are reimbursed at a higher rate than group therapy sessions.
•	The OIG will study the factors contributing to the rise in Medicare reimbursement for polysomnography (a test for diagnosing sleep apnea), and whether it is appropriate to bill for this procedure.
•	The OIG will identify improper payments and potential cost savings for Medicaid outpatient mental health services. This determination is necessary because one-third of Medicare outpatient mental health services are improperly billed and/or documented.
•	The OIG will determine whether providers were improperly reimbursed for false claims for outpatient alcoholism and substance abuse services.
•	The OIG will determine if Medicare Part B long distance physician services are inappropriately billed for beneficiaries of home health and skilled nursing facility services.

III. Priorities for Drug Reimbursement and Administration

•	The OIG will determine whether independent dialysis facilities are improperly billing Medicare for administering drugs beyond what is medically necessary and ordered by providers.
•	As directed by the Medicare Prescription Drug Improvement and Modernization Act (MMA), the OIG will conduct studies to determine widely available market prices for Medicare Part B drugs. The market prices will then be compared to the average sale prices.
•	The OIG will determine if there are duplicative payments to providers for Medicare Part B drugs purchased from vendors selected through a competitive bidding process and those directly reimbursed under the average sales price system.
•	The OIG will review selected drug manufacturers to evaluate the methods that manufacturers use to calculate their average market prices for the Medicaid drug reimbursement program to determine if these methods are consistent with federal laws, rebate agreements and CMS Releases. The OIG will also review CMS's oversight of the Medicaid drug rebate program to determine whether average market price data is accurate and timely.
•	The OIG will review safeguards to make sure that Medicare Part D does not inappropriately pay for prescription drug claims for which a third party is liable, and to prevent duplicative Part D claims for the same beneficiary.
•	The OIG will review employer controls to make sure that only drugs covered under Medicare Part D and related allowable costs are included in an employer's interim drug cost submissions.
•	The OIG will assess the appropriateness of Medicare payments for Botox treatments provided to Medicare beneficiaries. Medicare coverage for Botox includes specific spastic conditions associated with certain diagnoses that are supported by medical necessity. Use of Botox for conditions other than what is covered by Medicare is unallowable.

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