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From Health Law Daily, February 4, 2014

OIG releases FY 2014 Work Plan; strong ACA focus

By Trin Legaspi, JD, LLM

The Office of Inspector General (OIG) released its Fiscal Year (FY) 2014 Work Plan that contains descriptions of activities that OIG intends to initiate or continue with respect to HHS programs and operations. The OIG conducts audits, evaluations, and investigations; provides guidance to industry; and, if necessary imposes civil monetary penalties, assessments, and administrative sanctions. The Work Plan outlines the OIG’s current focus areas and states the primary objectives of each project. For the first time the OIG released the Work Plan in the first quarter of the year, rather than the third (OIG Work Plan, January 31, 2014).

Affordable Care Act. The OIG Work Plan includes work-in-progress and planned reviews of programs and projects implemented as part of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The Work Plan will focus on the progress of the Health Insurance Marketplaces with four key focus areas: (1) payment accuracy; (2) eligibility systems; (3) contracts; and (4) security of data and consumer information. The Work Plan also describes the range of FY 2014 reviews to promote the effectiveness and efficiency of the Medicaid expansion. Areas of focus include prescription drugs; billing, payment and reimbursement; quality and safety of home health services; and Medicaid managed care. Finally, the Work Plan will track changes implemented by the ACA to the Medicare program that were designed to improve efficiency and quality of care, and promote program integrity and transparency. Much of the OIG’s work will provide data and information on cost, quality, and the delivery of Medicare services that help CMS as it develops new, value-driven payment and delivery models for the Medicare program.

CMS-related legal and investigation activities. OIG continues its war on fraud and abuse through its resolution of civil and administrative health care fraud cases and its use of enforcement powers by excluding individuals from program participation, imposing civil money penalties, prosecuting False Claims Act (FCA) cases, and the implementation of corporate integrity agreements. The OIG will continue to devote significant effort to its Medicaid Fraud Control Units and continue cooperating with other federal agencies such as the Federal Bureau of Investigation, the Internal Revenue Service, and the U.S. Postal Service in their joint efforts to stop the abuse of federal healthcare programs.

Medicare Part A and Part B. The OIG plans to audit and review numerous areas under Medicare Part A and Part B: hospitals, nursing homes, hospices, home health services, medical equipment and supplies, prescription drugs, information technology, security, protected health information (PHI), and data accuracy. With regard to hospitals the OIG will focus on a variety of topics including reconciliation of outlier payments to determine whether CMS performed the reconciliations in a timely manner to allow Medicare contractors to perform final settlement of hospital associated cost reports; and the impact of new inpatient admission criteria on hospital billing. The OIG also plans on focusing on new areas in regard to hospitals, including a review of Medicare payments for right heart catheterizations and heart biopsies billed during the same operative session in order to determine whether hospitals properly billed Medicare. Another new focus will be on provider data in order to ensure whether hospitals’ indirect medical education payments were made properly, as historically hospitals have received excess reimbursement.

For nursing homes the OIG plans on examining the following areas: questionable billing patterns for Part B services during nursing home stays; the verification of deficiency corrections for deficiencies identified during reconciliation surveys; the national background check program for prospective long term care employees; and the hospitalization of nursing home residents for manageable and preventable conditions. A new area of focus related to nursing homes is Medicare Part A billing, as prior OIG reports found skilled nursing facilities increasing billed for highest levels of therapy despite beneficiary characteristics remaining mostly unchanged. Skilled nursing facilities resulted in $1.5 billion in incorrect Medicare payments in 2009.

In addition, in the area of prescription drugs the OIG will gather data and information related to the requirement that manufacturers submit average sales prices for Part B drugs to CMS; and outpatient payments to providers for items such as chemotherapy drugs and the costs associated with the administration of the drugs to determine whether Medicare overpaid providers based on billing errors and the overbilling of units.

Further, the OIG plans to assess a variety of issues related to information technology, security, and personal health information (PHI). For the first time the OIG will be studying controls over networked medical devices at hospitals, such as dialysis machines, radiology systems and medication dispensing systems that are integrated with electronic medical records. The OIG believes these systems pose a growing threat to the security and privacy of PHI.

Medicare Part C and Part D. Under Medicare Part C and Part D the OIG will review the areas related to Medicare Advantage (MA) organizations and Prescription Drug Plans (PDPs). Reviews of MA organizations will look for compliance data that reflects items and services provided to MA beneficiaries is complete, consistent, and accurate when the data is submitted to CMS; and whether documentation is sufficient to support the diagnosis that was submitted by the MA to CMS. For PDPs the OIG will review numerous areas including savings potential for adjusting risk corridors and potential savings for retail pharmacy discount generic drug programs.

Medicaid Programs. The OIG will conduct Medicaid prescription drug reviews including state and manufacturer compliance with Medicaid requirements; and state claims for federal reimbursement. Billing issues will be examined with relation to home health services and adult day health care services; and continuing day treatment for mental health services. State claims will be reviewed for federal reimbursement in relation to the home and community-based services waiver program payments. In addition, the OIG will review Medicaid managed care in order to maximize efficiencies through the negotiation of rates, coordination of care, and management services.

Other. For the first time the OIG will review the extent to which the FDA conducts inspections of generic drug manufacturers, including the results of the inspections and the enforcement actions taken by the agency in response to shortcomings of manufacturers. Another new area of focus will be the OIG’s review of Indian Health Service hospitals’ efforts to ensure quality inpatient care and compliance with Medicare conditions of participation.

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