Office of Inspector General Releases the 2014 Work Plan

The Department of Health and Human Services (HHS), Office of Inspector General (OIG), released their Work Plan for Fiscal Year 2014. The Work Plan provides brief descriptions of activities that OIG plans to initiate or continue with respect to HHS programs and operations in fiscal year 2014. Some selected topics described in the 2014 OIG Work Plan that may be of interest to ISIS members are highlighted below. Members are strongly encouraged to review the full report by clicking here.

·      Oversight of pharmaceutical compounding

Medicare oversees the safety of pharmaceuticals compounded at Medicare participating hospitals through the accreditation and certification process. The report will describe Medicare’s oversight of pharmaceutical compounding in Medicare-participating acute care hospitals and how State agencies and hospital accreditors assess such pharmacy services in hospitals.  OIG states that this work is particularly important in view of a recent meningitis outbreak resulting from contaminated injections of compounded drugs.

(Expected issue date: FY 2014; work in progress)

·      Payment for compounded drugs under Medicare Part B

An investigation will examine MACs’ policies and procedures for reviewing and processing Part B claims for compounded drugs and assess the appropriateness of such claims.  Compounded drugs may be eligible for coverage under Medicare Part B. However, for Medicare to pay for these drugs, they must be produced in accordance with the Federal Food, Drug, and Cosmetic Act.  CMS notifies the MACs when FDA has determined that compounded drugs are being produced in violation of the Act.

(Expected issue date: FY 2014; work in progress)

·      Evaluation and management services—Inappropriate payments

Medicare contractors have noted an increased frequency of medical records with identical documentation across services. Medicare requires providers to select the billing code for the service on the basis of the content of the service and to have documentation to support the level of service reported.  The investigation will determine the extent to which selected payments for evaluation and management (E/M) services were inappropriatethrough the review ofmultiple E/M services associated with the same providers and beneficiaries to determine the extent to which electronic or paper medical records had documentation vulnerabilities. 

·      Diagnostic radiology—Medical necessity of high-cost tests

The OIG intends to review Medicare payments for high-cost diagnostic radiology tests to determine whether they were medically necessary and the extent to which utilization has increased for these tests. Medicare will not pay for items or services that are not "reasonable and necessary.”

(Expected issue date: FY 2015; work in progress)

·      Electrodiagnostic testing—Questionable billing

A review of Medicare claims data will be undertaken to identify questionable billing for electrodiagnostic testing and determine the extent to which Medicare utilization rates differ by provider specialty, diagnosis, and geographic area for these services.  The use of electrodiagnostic testing for inappropriate financial gain could pose a growing vulnerability to Medicare.

(Expected issue date: FY 2013; work in progress)

·      Imaging services—Payments for practice expenses

A review of Medicare Part B payments for imaging services will aim to determine whether they reflect the expenses incurred and whether the utilization rates reflect industry practices. For selected imaging services, the OIG will focus on the practice expense components, including the equipment utilization rate.

(Expected issue date: FY 2014; work in progress)

·      Physicians—Place-of-service coding errors

The OIG will review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. Prior OIG reviews determined that physicians did not always correctly code non-facility places of service on Part B claims submitted to and paid by Medicare contractors. Federal regulations provide for different levels of payments to physicians depending on where services are performed. Medicare pays a physician a higher amount when a service is performed in a non-facility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ambulatory surgical center.

(Expected issue date: FY 2014; work in progress)

·      Physical therapists—High utilization of outpatient physical therapy services

OIG will review outpatient physical therapy services provided by independent therapists to determine whether they were in compliance with Medicare reimbursement regulations. Prior OIG work found that claims for therapy services provided by independent physical therapists were not reasonable or medically necessary or were not properly documented. OIG focus is on independent therapists who have a high utilization rate for outpatient physical therapy services. Medicare will not pay for items or services that are not "reasonable and necessary.”

(Expected issue date: FY 2014; work in progress and new start)

·      Reasonableness of Medicare’s fee schedule amounts for selected medical equipment items compared to amounts paid by other payers

A review will determine the reasonableness of the Medicare fee schedule amount for various medical equipment items, including commode chairs, folding walkers, and transcutaneous electrical nerve stimulators. Medicare payments made for various medical equipment items will be compared to the amounts paid by non-Medicare payers, such as private insurance companies and the Department of Veterans Affairs (VA), to identify potentially wasteful spending.

(Expected issue date: FY 2015; new start)

·      Ambulatory surgical centers—Payment system

A review will determine the appropriateness of Medicare’s methodology for setting ambulatory surgical center (ASC) payment rates under the revised payment system to determine whether a payment disparity exists between the ASC and hospital outpatient department payment rates for similar surgical procedures provided in both settings.

(Expected issue date: FY 2014; work in progress)