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Key Takeaways from OIG’s 2015 Work Plan

Written by: Laurence J. Freedman, Theresa Carnegie, and Kimberly Gold

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its Fiscal Year 2015 Work Plan on October 31. The Work Plan provides the OIG’s planned reviews and activities with respect to HHS programs and operations during the current fiscal year and beyond.

In the introduction to the Work Plan, OIG stated that, in the coming year, it plans to continue to focus on issues such as emerging payment, eligibility, management, IT security vulnerabilities, care quality and access in Medicare and Medicaid, public health and human services programs, and appropriateness of Medicare and Medicaid payments.

OIG’s course remains relatively steady, with a wide range of reviews under Part A and Part B, and additional close scrutiny of certain Medicare Advantage and prescription drug plan issues.  OIG has added substantial areas of review under the Affordable Care Act of 2010, now that enrollment and exchanges are in the implementation stage.

Our review of the Work Plan provides several important insights about the OIG’s objectives for 2015:

  • Hospitals:  Hospitals continue to be a major focus of OIG oversight, with 22 substantive areas under review.  OIG is deeply engaged with hospital reviews both on the billing and payment side, and quality of care issues, which are a particular priority for current Department of Justice (DOJ) and OIG enforcement efforts. OIG continues to scrutinize CMS contractors’ implementation of outlier reconciliation, which OIG has been critical of for many years.  OIG remains intensely interested in inpatient versus outpatient payments, the “two midnight” rule for inpatient admissions, and cardiac catheterizations.
  • Hospice:  Hospice billings for general inpatient care, a focus of relators and the DOJ, is under close review by the OIG.
  • Freestanding Clinic Providers:  OIG continues to examine certain payment systems, e.g., provider based services and freestanding clinic payments, with an eye toward reducing disparity of payments based on site of service.
  • Laboratories:  OIG added a review of independent clinical laboratory billing requirements, without further specifying the billing requirements at issue.  This may coincide with increased local coverage determinations by contactors, OIG enforcement against clinical laboratories under its Civil Monetary Penalties Law authority, and OIG’s general heightened scrutiny of technical billing and payment compliance by clinical laboratories, especially specialty laboratories.
  • EHR Incentive Payments:  OIG will review Medicare incentive payments for adopting EHRs and receiving incentive payments based on meeting meaningful use criteria.
  • Medicare Advantage:  OIG continues to scrutinize the accuracy of risk adjustment data, and the sufficiency of documentation to support the diagnoses codes used for risk adjustment.
  • Medicare Part D:  OIG will continue to scrutinize the quality of Medicare Part D data submitted to CMS through review of: (i) the sufficiency of documentation supporting Part D sponsors’ administrative costs included in annual bids, (ii) Part D sponsors’ compliance with DIR reporting requirements, (iii) Medicare Part D PDE records submitted by selected pharmacies with questionable Part D billing, and (iv) data used to calculate the coverage gap discount.  OIG also plans to follow-up on the steps CMS has taken to improve its oversight of Part D sponsors’ P&T committee conflict-of-interest procedures following OIG’s critical 2013 Report.
  • Medicaid Managed Care:  OIG added a review of state collection of rebates for drugs dispensed to Medicaid managed care enrollees.  OIG plans to determine whether Medicaid MCOs are reporting required drug utilization to the states and whether the states are collecting the rebates from manufacturers.
  • 340B Drug Discount Program:  OIG will continue to analyze how much Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs.  OIG plans to assess the risk of duplicate discounts for 340B-purchased drugs paid through Medicaid MCOs and to describe states’ efforts to prevent them.
  • Accountable Care Organizations:  OIG intends to conduct a risk assessment of CMS’ administration of the Pioneer ACO Model.

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Kimberly Gold