Two New OIG Work Plan Issues Affecting Hospitals

on Tuesday, 29 October 2019. All News Items

Someone is Always Watching

It is a fact of life that many of the things we do are under the oversight of others. As children, our parents watch over what we do, then teachers, and when we enter the work force, we have bosses and supervisors. Even corporations, businesses, hospitals, etc. have departments whose function is to watch over the activities in whole or part of other departments (think Compliance for example). Our governments are replete with checks and balances, and divisions whose function is oversight. The Office of Inspector General, for instance, is a sub-department of the Department of Health and Human Services (HHS), whose mission is to protect the integrity of HHS programs as well as the health and welfare of program beneficiaries.

According to the OIG website, “A majority of OIG's resources goes toward the oversight of Medicare and Medicaid (and that) oversight extends to programs under other HHS institutions, including the Centers for Disease Control and Prevention, National Institutes of Health, and the Food and Drug Administration.” To fulfill their mission, the OIG develops a Work Plan that describes the “various projects including OIG audits and evaluations that are underway or planned to be addressed during the fiscal year and beyond by OIG's Office of Audit Services and Office of Evaluation and Inspections.” The OIG used to only publish the Work Plan once a year; in 2015 they added a mid-year update. Since October 2017 the Work Plan is updated monthly to align with their work planning process.

If you are signed up for the OIG listserv, you will receive updates concerning completed reports, investigations, enforcement actions, and notification of when new Work Plan items are added. Not all of the Work Plan items apply to hospitals, but I recommend reviewing the additions monthly to see if there are issues that apply to your line of business. Just last week, this newsletter addressed the new OIG Work Plan item related to the Medicare 3-Day Window Payment Policy. For October, the OIG added two new issues that could have implications for hospitals.

The first is Medicare Part B Payments for Speech-Language Pathology (SLP). The OIG plans “to determine whether the claims using the KX modifier adhere to Federal requirements (and) … evaluate payment trends to identify Medicare payments for outpatient speech therapy services billed using the KX modifier that are potentially unallowable.” The KX modifier is appended on the claim to therapy services when Medicare payments for these services exceed an annual spending threshold – this was formerly the “therapy cap” and was $2,010 for 2018 and $2,040 for 2019 for physical therapy and SLP services combined (occupational therapy has a separate but equal threshold). Use of the KX modifier with therapy services attests that the services beyond the threshold amount are medically necessary. These means the patient needs the SLP services, is benefiting from them, and the services require the skills of a therapist. The OIG will be looking at the documentation in the medical record to support this. This is the same documentation that should be in every SLP therapy record, but it will be under greater scrutiny when the services billed exceed the threshold amount described above.

SLP therapists (and PT/OT therapists as well) need to make sure their evaluation, plan of care, progress notes, daily treatment notes, and discharge summaries clearly describe the patient’s condition including their functional limitations; identify the treatments needed that can only be provided by a therapist; include specific, measurable goals; and explain the patient’s progress and outcomes related to the goals. The record must justify on-going treatment when needed, but it is also the therapist responsibility to discontinue treatment when the patient is no longer benefiting from therapy or when the treatment can be handled by the patient, alone or with the assistance of a caregiver or other non-skilled person.

Hospitals and therapists should not use the KX modifier for therapy that is not medically necessary. On the flip side, hospitals and therapists need to have systems in place to make sure they are appropriately applying the KX modifier to SLP and other therapy services when the threshold is exceeded and the services are medically necessary. I see numerous automatic Medicare denials for therapy services “exceeding benefit maximum for this period,” where the provider has failed to append the KX modifier.  This will likely require coordination between the therapists and the registration department responsible for checking Medicare benefit and eligibility information.

The second issue is Review of Medicare Part B Urine Drug Testing (UDT) Services and you will never believe it, but the problem is again medical necessity. The use of UDT is widespread these days due to the national opioid crisis. According to the OIG description of this item, “UDT results influence treatment and level-of-care decisions for individuals with SUDs (substance use disorders).” The major issue seems to be whether screening UDTs are sufficient or whether definitive drug tests are needed. Screening drug tests, also known as presumptive tests, cover a range of drugs and identify whether a particular substance is present or not. These tests are billed with one CPT code, once per day, irrespective of the number of Drug Class procedures or results on any date of service. Definitive drug tests identify specific drugs and associated metabolites, and generally include a quantitative concentration of the drug. Definitive drug testing requires more sophisticated instrumentation to perform the testing and is billed per drug tested at a much higher reimbursement rate than drug screening. Sometimes, definitive drug testing is legitimately needed for SUD treatment, but often screening tests are sufficient. The OIG article notes that “the 2018 Medicare fee-for-service improper payment data showed that … the overpayment rate for definitive drug testing for 22 or more drug classes was 71.7 percent.” As with all medical necessity issues, the physician’s record must clearly support the need for definitive drug testing, including the specific need for each drug definitively tested.


What do hospitals need to do related to the new OIG Work Plan issues above?

This is a great time for an internal review of these two topics. Does your hospital have processes in place to accurately know where the patient is on their therapy spending for the year? Are you appropriately appending the KX modifier when needed? Do your therapy records have the documentation to support the medical necessity of the services?

Do you bill for definitive drug testing? If so, are more than a few drugs tested at once? Does the medical record support the medical necessity of definitively testing for multiple drugs at once? Remember this documentation may be in the physician’s office note, not in the hospital record. In this case, do you have a way to access the physician’s record and does it support medical necessity? This requires coordination and communication between the hospital lab and the ordering physician. Both must have a good understanding of what constitutes medical necessity for this type of testing and the hospital may have to lead in this effort by educating the physicians on the medical necessity requirements and making them aware of the consequences of improper billing for the billing hospital laboratory.

Before the OIG oversights your hospital, you may want to “oversight” yourself so you will be prepared.


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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