Office of Inspector General Releases 1999 Work Plan

(1) Hospital-Owned Physician Practices. The OIG is going to identify "potential vulnerabilities to Medicare arising from the proliferation of provider-based physician practices." The OIG is concerned because hospitals that meet certain criteria receive higher reimbursement by having the physician practice deemed to be "provider-based," rather than freestanding. The OIG will be reviewing the process for approving "provider-based" status and monitoring hospitals that received this benefit. Additionally, the OIG will be reviewing the "financial impact of trends in hospital-physician integration." The OIG is concerned that such integration could increase Medicare's costs and also result in "questionable patient referral practices."

(2) Prospective Payment System Transfers. The OIG will continue to assist the Department of Justice in its review of hospital transfer practices, believing that transfers are sometimes incorrectly reported, allowing both the transferring and receiving hospitals to receive full payment, which would normally not be allowed.

(3) Outpatient Psychiatric Services. The OIG will conduct a review to "determine whether psychiatric services rendered on an outpatient basis are billed and reimbursed in accordance with Medicare regulations." The OIG is particularly concerned about whether these services were documented, ordered, and covered.

1. Physician Case Management Billings. The OIG will review "the reasonableness of physician claims

2. for home health care." The OIG plans to determine whether, after a home health intermediary denies a home health claim, the Part B carrier also denies any related physician payments for care plan oversight. The OIG believes that such payments should be recovered.

3. Access to Home Health Services. The OIG plans to "assess the effect of the Medicare home health

4. interim payment system on beneficiary access to home health services." The OIG wants to see how home health agencies have responded to the new payment system and what effect this has had on beneficiary access.

5. Home Health Aides. The OIG plans to examine "claims for home health aide services provided to

Medicare beneficiaries in residential care facilities in one [unidentified] State." The OIG is concerned that the home health aides are providing services that the facilities are required to provide. It would not be surprising if this review were expanded to more that one state.

1. Ancillary Medical Supplies. The OIG plans to review whether skilled nursing facilities have claimed allowable costs for ancillary medical supplies.
   
   
2. Therapy in Nursing Homes. The OIG is going to conduct a series of reviews that "will evaluate the

3. reasonableness of and costs associated with therapy services provided in skilled nursing facilities." The OIG plans to look at rehabilitation services reimbursed by both Part A and Part B.

4. Mental Health Services. The OIG began to review mental health services provided in nursing facilities in 1996 and it plans to continue to review whether such services were in appropriately billed.

1. Physician Coding. The OIG plans to assess whether physicians are correctly coding evaluation and management services, and whether Medicare carriers are adequately monitoring physician coding. The OIG states that previous studies have shown that physicians do not accurately or uniformly use these codes.
   
   
2. Physicians with Excessive Nursing Home Visits. The OIG plans to "identify and audit billings of physicians with excessive visits to Medicare patients in skilled nursing facilities." They plan to focus on excessive visits in a given day, or excessive visits to the same beneficiaries.
   
   
3. Podiatry. The OIG plans to "assess whether podiatry services paid by Medicare were medically necessary and met HCFA coverage policy." The OIG points out that during the period of 1992 through 1995, Medicare expenditures for nail debridement increased 46%, while other Part B services increased only 18%.
   
   
4. Billing Service Companies. The OIG plans to conduct a review to determine whether claims prepared and submitted by billing companies are properly coded and whether the agreements between providers and billing companies meet Medicare criteria.
   
   
5. Reassignment of Physician Benefits. The OIG is concerned that reassignment of benefits by physicians to a clinic shifts accountability and liability for billing away from the physicians and to the clinics and plans to examine reassignment abuses to determine specific vulnerabilities.
   
   
6. Improper Billing of Psychiatric Services. The OIG plans to review whether providers are properly billing Medicare in the following three areas: (i) billing for individual psychotherapy, rather that inpatient hospital care; (ii) providers' billing Medicare for psychological testing on a protest basis, rather that on a per-hour basis; or (iii) providers billing Medicare for group psychotherapy in cases that do not qualify for payment. The OIG plans to assess overpayment against those physicians whose billing practices are improper.
   
   
7. Durable Medical Equipment. The OIG plans to assess whether both DME suppliers and home health agencies are billing for the same equipment and supplies for the same beneficiaries.
   
   

Clinical Laboratory Tests. The OIG plans to identify inappropriate payments for clinical laboratory tests for ESRD patients, as well as the medical appropriateness of laboratory tests and other services ordered for those patients.

1. Partial Hospitalization Services. The OIG plans to continue its review of partial hospitalization services rendered in community mental health centers. The OIG will focus on whether services were covered and whether patients met eligibility criteria.
   
   
2. Outpatient Psychotherapy. The OIG plans to conduct a study with regard to the medical necessity of outpatient psychotherapy.
   
   

1. Physician Incentive Plans in Managed Care Contracts. The OIG plans to review compliance with the physician incentive plan regulations and to look at contracts that physicians enter into with managed care plans, both for this issue as well as any other issues that may affect the quality of care provided.
   
   
2. Medicare Contract Review. The OIG plans to conduct a number of studies to ensure that Medicare intermediaries and carriers are properly performing their functions, including identifying fraudulent providers. The OIG is particularly concerned in this regard to ensure that carriers and intermediaries prevent payment for mutually exclusive medical procedures, that they are properly suspending payments to Medicare providers, and identifying and collecting overpayments.
   
   
3. Management Services Organizations. The OIG is concerned with the proliferation of management services organizations and the vulnerabilities that these may create for Medicare. The OIG believes that the increasing use of these organizations may necessitate program safeguards, such as in-house protection of health insurance claim numbers and monitoring of billing patterns and practices.
   
   

One interesting point that is somewhat buried in the Work Plan is that the OIG plans to analyze HCFA's enforcement of the Stark law, although the Work Plan only specifically references clinical laboratory services. The OIG states that it plans to determine whether HCFA has adequate information to enforce the law and to document the actions taken to date. This could indicate the beginning of enforcement activity in this area.

This is only a brief summary of the very extensive and ambitious Work Plan. The Work Plan does provide evidence that the enforcement agenda is not going to ease during this fiscal year and that providers must be consistently diligent in their efforts to comply with Medicare statutes, regulations and policies.