Hospital
Policies and Practices
The
Work Plan includes several new areas of focus that hospitals should be mindful
of. These include the following:
·
New Inpatient
Admission Criteria: The OIG intends to analyze the impact of the
“Two-Midnight” rule. This is a
significant area for hospitals as it represents a substantial change in the way
hospitals have been accustomed to billing for both inpatient and outpatient
services. Although this Rule
has been delayed, Recovery Audit Contractors and Medicare Audit Contractors
will still carry out prepayment reviews of hospital admissions between March 31
and September 30 of 2014.
·
Medicare Costs
Associated with Defective Medical Devices:
The OIG intends to review claims to identify any costs resulting from
additional utilization of medical services associated with defective medical
devices. For example, a provider may
utilize a medical device but if such device becomes defective, there may be
additional ancillary costs associated with the replacement.
·
Analysis of Salaries
Included in Hospital Cost Reports: The
OIG will review data from cost reports to identify salary amounts included in
operating costs reported to and reimbursed by Medicare. Although Medicare does not provide any
specific limits, this appears to be addressing executive compensation
concerns. Hospitals should understand
that this represents a significant shift towards further scrutiny of executive
salaries.
·
Comparison of
Provider-Based and Free-Standing Clinics: As mentioned below, provider-based status
has been a significant issue for the OIG over the past few years. Provider-based facilities receive higher
payments for services when compared with freestanding facilities. Therefore, the OIG is reviewing the impact of
provider-based status as compared to freestanding facilities. This focus area could mean potential changes
to both provider-based status qualifications and reimbursement for services at
such facilities.
The
Work Plan includes several areas of focus which have been included in previous
years’ plans. These areas include the
following:
·
Reconciliation of
Outlier Payments:
Outliers are additional payments that Medicare provides to hospitals for
beneficiaries who incur unusually high costs.
Consistently, these payments have exceeded the amount intended to be
paid. As a result of reconciliations,
hospitals may see an increase in the number of Medicare contractors
investigating outlier payments.
·
Impact of Provider-Based Status: The OIG continues to review and determine the
impact of provider-based status. This is
important as many hospitals allow subordinate facilities to bill as part of the
main provider to increase Medicare reimbursement. Specific requirements must be met to qualify
for provider-based status; however the continued scrutiny by the OIG may
require hospitals to prepare for any changes to these provision.
·
Critical Access
Hospitals – Payment for Swing Bed Services:
The review and comparison of swing-bed services at critical access
hospitals to the care received at skilled nursing facilities will continue for
the purpose of determining whether Medicare could achieve cost savings.
·
Critical Access
Hospitals – Beneficiary Costs for Outpatient Services: The OIG continues to review and determine the
costs to Medicare beneficiaries for outpatient services received at critical
access hospitals. Currently,
beneficiaries who receive outpatient services pay coinsurance amounts that are
computed based upon the hospital’s submitted charge, rather than the costs of
the services.
·
Long Term Care
Hospitals –
Billing Patterns: The OIG intends to identify readmission
patterns in long term care hospitals.
The primary concern is that CMS may not have the ability to detect
readmissions and appropriately pay the readmissions as interrupted stays
instead of as higher paying new admissions.
Billing
and Payments
The
OIG has stepped up focus on billing requirements including specifically
mentioning the requirement of adequate and supporting documentation within the
medical record. New focus areas related
to billing and payment issues for hospitals are as follows:
·
Outpatient
Evaluation and Management Services: The
OIG intends to review Medicare outpatient payments made to hospitals for
evaluation and management services related to clinic visits billed at the
new-patient rate to determine whether they were appropriate. A “new” patient or “established” patient is
an individual who has been seen as a registered inpatient or outpatient of the
hospital within the past three (3) years.
Therefore, hospitals should ensure that their policies and billing
practices are in line with these requirements.
·
Nationwide Review of
Cardiac Catheterization and Heart Biopsies:
The OIG will review payments for right heart catheterizations and heart
biopsies during the same operative session to determine if billing requirements
have been met. At times these have been
billed separately even though the services would already be included in
payments for heart biopsies. The OIG
noted that a bill must be completed accurately, reflecting the necessity of
compliant documentation.
·
Payments for
Patients Diagnosed with Kwashiorkor: Kwashiorkor is a form of severe protein
malnutrition that affects children living in specific areas and is not typically
found in the United States.
Nevertheless, the OIG intends to review Medicare payments made to
hospitals for claims that include this diagnosis. Above all, the OIG intends to scrutinize
whether such diagnosis is adequately supported by documentation in the medical
record.
·
Bone Marrow or Stem
Cell Transplants: Transplantations are covered under Medicare
only for specific diagnoses. The OIG
will evaluate whether procedures codes are accompanied with the diagnosis codes
to meet specific coverage criteria.
·
Indirect Medical
Education Payments: Teaching hospitals with residents receive
additional payments for each Medicare discharge to reflect the higher indirect
patient care costs; however such payments are calculated using the hospital’s
ratio of resident full-time equivalents to available beds. The OIG intends to determine if payments have
been made in accordance with Federal regulations and guidelines. Teaching hospitals must ensure that the
applicable requirements are being met, reducing the likelihood that the
hospital is receiving excess reimbursement.
The
Work Plan includes several areas of focus under billing and payments which have
been included in previous years’ plans.
These areas include the following:
·
Inpatient Claims for
Mechanical Ventilation: The OIG
continues to review Medicare payments for inpatient hospital claims with
certain Medicare Severity Diagnosis Related Group assignments that require
mechanical ventilation. A patient
though, is required to receive 96 hours or more of mechanical ventilation. The OIG will be reviewing this requirement to
see whether improper payments occurred.
·
Selected Inpatient
and Outpatient Billing Requirements:
Generally, the OIG will focus on billing requirements and recommended
recovery of overpayments to determine hospital compliance. This will include surveys or interviews with
hospital leadership and compliance officers to ensure compliance programs are
being enforced.
·
Duplicate Graduate
Medical Education Payments: No intern or
resident may be counted as more than one full time equivalent employee in the
methodology for receiving reimbursement of graduate medical education
costs. The OIG will continue to review
data to determine whether hospitals received duplicate or excessive graduate
medical education payments.
·
Outpatient Dental
Claims:
Dental services are generally excluded from Medicare coverage, however the OIG
will continue to review payments to hospitals to determine whether such
payments were made in accordance with Medicare requirements.
Quality
of Care and Safety
With
respect to quality of care and safety in hospitals, the OIG has issued new
focus areas related to oversight of pharmaceutical compounding and hospital
privileging. The following focus areas
should be on the radar of hospitals for this FY:
·
Oversight of
Pharmaceutical Compounding: Most hospitals
compound drugs on-site, or create a prescription drug tailored to the
individual patient. Medicare is
responsible for the safety of this process and the OIG intends to assess such
pharmacy services in hospitals for any potential oversight issues.
·
Oversight of
Hospital Privileging: The OIG intends to determine how hospitals
assess medical staff candidates prior to granting initial privileges. The OIG notes that the hospital’s governing
body must ensure that physicians and other licensed independent practitioners
are accountable. Their belief is that
strengthened privileging programs will yield significant contributions to patient
safety.
·
Hurricane Sandy
Emergency Preparedness Case Study: The
OIG intends to assess the hospital preparedness and response during Hurricane
Sandy. The OIG notes that CMS’s
Conditions of Participation require hospitals to develop and maintain an
environment that ensures the safety and well-being of patients during
disasters. Hospitals should note this
case study is limited to the counties affected, but the increased focus on
emergency preparedness may be a more widespread issue further into the future.
The
Work Plan includes areas of focus under quality of care and safety which have
been included in previous years’ plans.
These areas include the following:
·
Participation in
Projects with Quality Improvement Organizations: CMS is required to enter into contracts with
quality improvement organizations and the OIG intends to determine the extent
and nature of participation in the quality improvement projects.
·
Inpatient
Rehabilitation Adverse Events: The
OIG intends to continue focus on adverse and temporary harm events for Medicare
beneficiaries receiving post-acute care in inpatient rehabilitation
facilities. This review will also
include an analysis of prevention and the associated costs to Medicare.
By
reviewing the focus areas identified in the Work Plan, hospitals can determine
where to focus their compliance program efforts. If you have any questions regarding the Work
Plan or any issues that may impact your organization please contact Bob Wade at
bwade@kdlegal.com or Alex Krouse at akrouse@kdlegal.com.