OIG Reports and News Indirectly Affecting Hospitals

on Tuesday, 06 November 2018. All News Items | OIG

Expanding Your Horizons

A few years ago, my husband and I determined we were stuck in a rut in our social life. We decided to expand our horizons by traveling more and trying new and different activities and adventures. Even simple things like trying different types of restaurants and reading varying genres of books proved to be fun. It is often hard for people to try new things because of fears and habits. This applies in our personal and work environments. Here at MMP, our focus is traditional Medicare rules for acute-care hospitals, but when reading through the various list serves and newsletters I receive daily, I read about a variety of issues, not just hospital issues. There are benefits to this – it expands my horizons mentally and often the information does relate directly or indirectly to hospitals. A perfect example is audit reports from the Office of Inspector General (OIG). Here are some recent audit reports that were not specific to hospitals, but which contain learnings for hospital providers.

Medicare Improperly Paid Providers for Specimen Validity Tests Billed in Combination with Urine Drug Tests - https://oig.hhs.gov/oas/reports/region9/91602034.pdf

This report was directed toward Medicare Part B claims (independent clinical laboratories and physicians’ offices). Many hospitals also bill for urine drug tests and in a hospital setting the reporting of the types of tests used for specimen validity would be common. Specimen validity tests are those lab tests used to ensure a sample for urine drug testing has not been tampered with or altered. The OIG report states, “Specimen validity testing includes tests for urinary pH, specific gravity, creatinine, and oxidants. For example, a urinary pH test determines the degree of acidity or alkalinity of a urine sample. If the pH levels are outside the normal range, the sample may have been altered.”

When these tests are used for validity testing, they are considered part of the drug testing service and are not separately billable to Medicare. If these tests are ordered for the diagnosis, treatment, or management of a patient’s medical condition, such as a urinary tract infection or kidney stones, they should be covered by Medicare as medically necessary services. When used for medical management, these tests should be reported separately on the claim even when urine drug tests are also performed and reported.

In order to prevent inappropriate reporting of such tests, Medicare has National Correct Coding Initiative (NCCI) procedure-to-procedure (PTP) coding edits for code pairs involving urine drug testing and urinalysis. When a urinalysis is performed to manage a patient’s specific medical condition, the provider would have to append a modifier to the column two code of the CCI pair to by-pass the edit and receive separate payment for the test. For example, the urinalysis codes 81000-81005 require modifiers to allow separate payment when billed on the same date of service with urine drug testing CPT codes 80305-80307. Although I understand Medicare’s intent to prevent inappropriate billing and payment with these edits, this places an additional burden on providers to evaluate and modify the claim to receive payment for a medically necessary test that pays around $3 - $4.

Hospital providers should read this OIG report and verify they are billing correctly for urine drug screens and urinalysis testing.

Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials - https://oig.hhs.gov/oei/reports/oei-09-16-00410.pdf

In this September 2018 OIG report, the OIG concludes that Medicare Advantage plans may be inappropriately denying payment for services in an attempt to increase their profits. They based their conclusion on the fact that Medicare Advantage Organizations (MAOs) are paid under a capitated payment model, overturned 75% of their own denials upon appeal during 2014–16, with even more overturns by independent reviewers, and CMS audits identified widespread and persistent MAO performance problems related to denials of care and payment. The bad part and what hospitals should really pay attention to is that during 2014-16, beneficiaries and providers appealed only 1% of denials to the first level of appeal.

This means hospitals are likely being inappropriately denied for services provided to patients covered by a Medicare Advantage plan. I know, if you work in a hospital, this is not news to you. The lesson here for hospital providers is to appeal, appeal, appeal your denied MAO claims if you believe the services were appropriately provided and should be covered by the MAO.

The OIG recommended and CMS concurred to:

  • Enhance its oversight of MAO contracts, including those with extremely high overturn rates and/or low appeal rates, and take corrective action as appropriate;
  • Address persistent problems related to inappropriate denials and insufficient denial letters in Medicare Advantage; and
  • Provide beneficiaries with clear, easily accessible information about serious violations by MAOs.

Until CMS gets better control over the MAO denials, the onus is on providers and beneficiaries to appeal inappropriate denials.

London Cardiologist Sentenced to 42 Months for Health Care Fraud - https://www.justice.gov/usao-edky/pr/london-cardiologist-sentenced-42-months-health-care-fraud

And when reviewing OIG information, do not forget to read enforcement actions reported on the OIG list serve. These often include important lessons also. This particular item describes a guilty verdict for a physician who implanted dozens of pacemakers into patients that were medically unnecessary, under well-established national guidelines and Medicare coverage rules. 

Though not mentioned in the DOJ release, some hospital also billed for and was paid for these pacemaker implantations. Hospitals bear responsibility to ensure the services they provide and bill for meet Medicare coverage guidelines. Also, under Medicare’s Hospital Conditions of Participation, a hospital’s “governing body must ensure that the medical staff is accountable to the governing body for the quality of care provided to patients.”

Other types of services addressed by the OIG that might affect some hospitals either directly or indirectly include:

As you can see, there are lots of reasons to read OIG reports other than those specifically targeted to hospitals. It is one small way you should be expanding your horizons.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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