Knowledge Base Article

Back in June when the Office of Inspector General (OIG) changed the process and publication of their Work Plan, they used the word “dynamic” to describe their work planning process.  The Merriam-Webster dictionary defines dynamic as “marked by usually continuous and productive activity or change.”  So far, the OIG is remaining true to this definition by posting numerous new issues each month.  For July, the OIG posted 14 new issues all focused on the CMS agency.  The OIG is responsible for oversight for all agencies of Health and Human Services (HHS), but a review of active issues shows that most of their efforts are related to CMS.

I understand the OIG’s responsibility “to provide independent and objective oversight that promotes economy, efficiency, and effectiveness in the programs and operations of HHS.” But having worked in hospitals for years, I also understand the challenges of complying with all of the Medicare rules. If it were easy we might not need the OIG, but it is definitely not an easy task. 

Since MMP’s focus is hospital Medicare issues, I will only describe the new OIG Work Plan items related to hospitals and Medicare.  For a list of all the new issues, see the OIG’s Recently Added updates.

Nationwide Medicare Electronic Health Record Incentive Payments to Hospitals

Hospital can receive incentive payments for adopting electronic health record (EHR) technology. The OIG is concerned about potential incentive overpayments. Their concerns are based on the following:

• The Government Accountability Office (GAO) identified improper incentive payments as the primary risk to the Medicare EHR incentive program.
• An OIG report found CMS faces obstacles in oversight of the EHR program.
• OIG reviews showed that State agencies have and will continue to overpay hospitals millions of dollars due to inaccuracies in the hospitals’ calculations.

The OIG will be reviewing hospitals’ incentive payment calculations to ensure appropriate payment amounts and prevent future overpayments.  This is a hospital finance issue which is not my area of expertise, but I bet it is not that easy.  Calculations never are.

Review of Medicare Payments for Nonphysician Outpatient Services Provided Under the Inpatient Prospective Payment System

Medicare pays hospitals a prospective payment amount for inpatient services – we know this as the DRG payment.  The DRG payment is payment for all the hospital’s operating costs associated with the inpatient admission. This also includes diagnostic and related therapeutic outpatient services provided the day of admission or within the 3 days prior to admission under Medicare’s 3-day payment window rule.  Identifying those outpatient services that should be bundled with the inpatient claim and then billing correctly in compliance with the 3-day payment window is not an easy task either. Prior OIG reviews have found overpayments where hospitals billed inappropriately and Medicare contractors paid for outpatient services provided during or before the inpatient admission. The OIG will review to determine if outpatient payments during an inpatient admission and under the payment window rule were correct.

Medicare Payments for Unallowable Overlapping Home Health Claims and Part B Claims

Home Health (HH) agencies are also paid a Medicare prospective payment which covers all of their costs for providing services to the patient.  This includes services furnished by the home health agency and certain items or services provided under arrangement. The home health consolidated billing requirements mandate that certain items, supplies, and services are part of the home health payment and should not be billed separately to Medicare Part B from other entities. The OIG will be looking to see if Part B payments were allowable and followed the consolidated billing requirements.  From my experience, the major area of concern related to HH consolidated billing for hospitals is rehabilitative therapy services.  Medicare patients may present to a hospital’s therapy department for services even though they are receiving HH services. Hospitals should check Medicare eligibility systems and question the patient carefully to determine if they are currently under a home health plan of care.

Medicare Payments for Unallowable Overlapping Hospice Claims and Part B Claims

Once a Medicare beneficiary elects hospice care, all services related to the terminal illness are handled by the hospice.  Hospitals must seek payment for services provided to a hospice patient and related to the terminal illness from the hospice agency and not from Medicare. The OIG is reviewing to make sure any separate Part B payments were appropriate. Hospitals are often caught unaware when a hospice patient shows up in their emergency department. The hospital must determine if the patient has elected hospice and if so, is the medical condition for which they are seeking treatment related to the terminal illness.  If the answer to both is yes, the hospital must coordinate with the hospice agency to determine appropriate treatment and billing.  Not an easy task, especially in an emergency department setting. The same applies to non-emergency hospital services – reference laboratory testing is one example, but your clue here should be that the specimens are brought in by a hospice nurse.  In MMP’s experience, edits in the Medicare claims processing system catch most of these overlaps with hospice agencies and deny the hospital’s payment. It is then up to the hospital to spend extra time and effort to determine the circumstances and obtain payment from the hospice agency.  Not an easy task on the back end either.

One last issue somewhat related to hospitals:

Review of Medicare Payments for Telehealth Services

One of the Medicare requirements for telehealth payment is that the services be between a beneficiary located at a rural originating site and a practitioner located at a distant site.  An eligible originating site must be the practitioner’s office or a specified medical facility, such as a hospital.  The OIG will be looking for telehealth payments where there was not a corresponding claim from the originating site to ensure the payments were correct.  More information on billing telehealth services can be found in the Medicare Telehealth Fact Sheet.

Not much about health care and hospital services is easy, but the OIG work plan gives us some areas on which to focus our scrutiny when it comes to billing Medicare.