Provider Services FY 2014 OIG Work Plan

The U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) recently released its Fiscal Year (FY) 2014 Work Plan.  The Work Plan summarizes the activities in which the OIG plans to focus its efforts during the applicable FY.  Many of the sections applicable to medical equipment, ASLs, chiropractors, and physicians are set forth below.Frequently Replaced Supplies - Supplier Compliance With Medical Necessity, Frequency, and Other Requirements

The OIG will review claims for frequently replaced medical equipment supplies to determine whether medical necessity, frequency, and other Medicare requirements are met.  Prior OIG work found that suppliers automatically shipped continuous positive airway pressure system and respiratory-assist device supplies when no physician orders for refills were in effect.  Such claims are deemed improper.  For supplies and accessories used periodically, orders or certificates of medical necessity must specify the type of supplies needed and the frequency with which they must be replaced, used, or consumed.
Beneficiaries or their caregivers must specifically request refills of repetitive services and/or supplies before suppliers dispense them.  Suppliers should not initiate refills of orders, and suppliers should not automatically dispense a quantity of supplies on a predetermined regular basis.  Medicare does not pay for items or services that are “not reasonable and necessary."Ambulatory Surgical Centers - Payment System
Beginning January 1, 2008, a change in Federal law required the Secretary to implement a revised payment system for payment of surgical services furnished in ASCs.  Accordingly, CMS implemented a revised ASC payment system modeled on the Outpatient Prospective Payment System. The OIG will review the appropriateness of Medicare’s methodology for setting ambulatory surgical center (ASC) payment rates under the revised payment system.  The OIG will also determine whether a payment disparity exists between the ASC and hospital outpatient department payment rates for similar surgical procedures provided in both settings.  Rural Health Clinics - Compliance With Location Requirements
The Balanced Budget Act of 1997 (BBA) authorized CMS to remove from the Rural Health Clinic (RHC) program clinics that do not meet location requirements.  In 2005, OIG recommended that CMS promulgate regulations to implement the BBA.  However, CMS has yet to promulgate the final regulations.  As a result, RHCs that no longer meet eligibility requirements continue to receive enhanced Medicare reimbursement.  The OIG will determine the extent to which RHCs do not meet basic location requirements and the extent to which Medicare reimbursements to such clinics are occurring.  Anesthesia Services - Payments For Personally Performed Services

The OIG will review Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements.  The OIG will also determine whether Medicare payments for anesthesiologist services reported on a claim with the “AA” service code modifier met Medicare requirements.  Physicians report the appropriate anesthesia modifier code to denote whether the service was personally performed or medically directed.  Reporting an incorrect modifier on the claim as if services were personally performed when they were not can result in Medicare’s paying a higher amount.  The service code “AA” modifier is used for anesthesia services personally performed by an anesthesiologist, whereas the QK modifier limits payment to 50 percent of the Medicare-allowed amount for personally performed services claimed with the AA modifier.  Payments to any service provider are precluded unless the provider has furnished the information necessary to determine the amounts due.
Chiropractic Services

The OIG will compile the results of prior OIG audits, evaluations, and investigations of chiropractic services paid by Medicare to identify trends in payment, compliance, and fraud vulnerabilities and offer recommendations to improve detected vulnerabilities.  Prior OIG work identified inappropriate payments for chiropractic services that were medically unnecessary, were not documented in accordance with Medicare requirements, or were fraudulent.  Medicare will not pay for items or services that are “not  reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member.”  Part B will pay only for a chiropractor’s manual manipulation of the spine to correct a subluxation if there is a neuro-musculoskeletal condition for which such manipulation is appropriate treatment.  Similarly, chiropractic maintenance therapy is also not considered to be medically reasonable or necessary and is therefore not payable.  This planned portfolio document will offer new recommendations to improve Medicare chiropractic vulnerabilities detected in prior OIG work.
Diagnostic Radiology - Medical Necessity Of High-Cost Tests

The OIG will 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.”
Electrodiagnostic Testing - Questionable Billing

The OIG will review Medicare claims data 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.  Electrodiagnostic testing, which assists in the diagnosis and treatment of nerve or muscle damage, includes the needle electromyogram and the nerve conduction test.  Coverage for diagnostic testing is provided by the Social Security Act.  The use of electrodiagnostic testing for inappropriate financial gain could pose a growing vulnerability to Medicare.
Evaluation And Management Services - Inappropriate Payments

The OIG will determine the extent to which selected payments for Evaluation and Management (E/M) services were inappropriate.  The OIG will also review multiple E/M services associated with the same providers and beneficiaries to determine the extent to which electronic or paper medical records had documentation vulnerabilities.  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.
Imaging Services - Payments For Practice Expenses

The OIG will review Medicare Part B payments for imaging services 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.  Practice expenses are those such as office rent, wages, and equipment.  Physicians are paid for services pursuant to the Medicare physician fee schedule, which covers the major categories of costs, including the physician professional cost component, malpractice costs, and practice expenses.
Laboratory Tests - Billing Characteristics And Questionable Billing

The OIG will review billing characteristics for Part B clinical laboratory tests and identify questionable billing.  Medicare’s payments for lab services in 2008 represented an increase of 92% over payments in 1998.  In 2010, Medicare paid about $8.2 billion for lab tests, accounting for 3% of all Medicare Part B payments.  Much of the growth in lab spending has resulted from the increased volume of ordered services.  Part B covers most lab tests and pays 100% of allowable charges; Medicare beneficiaries do not pay copayments or deductibles for lab tests.  Medicare should pay only for those lab tests that are ordered by a physician or qualified nonphysician practitioner who is treating a beneficiary. 
Ophthalmologists-Questionable Billing

The OIG will review Medicare claims data to identify inappropriate payments and questionable billing for ophthalmological services during 2012.  The OIG will also determine the geographic locations of providers exhibiting questionable billing for ophthalmological services in 2012.  In 2010, Medicare allowed over $6.8 billion for services provided by ophthalmologists.
Physicians - Place-Of-Service Coding Errors

The OIG will review physicians’ coding on Medicare Part B claims for services performed in ASCs 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 nonfacility 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 nonfacility 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 ASC.
Sleep-Disorder Clinics - High Utilization Of Sleep-Testing Procedures

The OIG will examine Medicare payments to physicians, hospital outpatient departments, and independent diagnostic testing facilities for sleep-testing procedures to assess the appropriateness of Medicare payments for high utilization sleep-testing procedures and determine whether they were in accordance with Medicare requirements.  An OIG analysis of CY 2010 Medicare payments for CPT Codes 95810 and 95811, which totaled approximately $415 million, showed high utilization associated with these sleep-testing procedures.  Medicare will not pay for items or services that are not “reasonable and necessary.”  Diagnostic testing that is duplicative of previous testing done by the attending physician to the extent the results are still pertinent is not covered because it is not reasonable and necessary under 1862(a)(1)(A) of the Act.
Security Of Portable Devices Containing Personal Health Information

The OIG will review security controls implemented by Medicare and Medicaid contractors and at hospitals to prevent the loss of Protected Health Information (PHI) stored on portable devices and media, such as laptops, jump drives, backup tapes, and equipment considered for disposal.  Recent breaches related to Federal computers, including one involving a CMS contractor, have heightened concerns about protecting sensitive information.  The OIG will assess and test contractors’ and hospitals’ policies and procedures for electronic health information protections, access, storage, and transport.  OMB recommended that all Federal departments and agencies take action to protect sensitive information by following the National Institute of Standards and Technology’s Special Publications 800-53 and 800-53A. 
Controls Over Networked Medical Devices At Hospitals

The OIG will determine whether hospitals’ security controls over networked medical devices are sufficient to effectively protect associated electronically protected health information (ePHI) and ensure beneficiary safety.  Computerized medical devices, such as dialysis machines, radiology systems, and medication dispensing systems that are integrated with EMRs and the larger health network pose a growing threat to the security and privacy of personal health information.  Such medical devices use hardware, software, and networks to monitor a patient’s medical status and transmit and receive related data using wired or wireless communications.  To participate in the Medicare program, providers such as hospitals are required to secure medical records and patient information, including ePHI.  Medical device manufacturers provide Manufacturer Disclosure Statement for Medical Device Security (MDS2) forms to assist health care providers in assessing the vulnerability and risks associated with ePHI that is transmitted or maintained by a medical device.
Accuracy Of The Physician Compare Web Site

The OIG will review CMS’s efforts to ensure that the Physician Compare Web site contains accurate information on health care providers.  CMS was required by law to create the Physician Compare Web site, which is intended to help Medicare beneficiaries make informed choices about their health care by providing them with information about health care providers.  CMS repurposed its Provider Enrollment, Chain, and Ownership System (PECOS) as its data source for provider information on Physician Compare.  However, prior OIG work found that the provider information in PECOS was often inaccurate and, at times, incomplete.
By reviewing the focus areas identified in the Work Plan, providers 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 Thomas Hutchinson at