Knowledge Base Article

Were you anxiously awaiting its release? Did you lie awake at night thinking about what old and new features might be included? When it was released, did you drop everything and rush to check it out? No, we are not talking about the latest version of some Smart Phone, a movie sequel, or a new video game. We are talking about the 2014 OIG Work Plan which was finally released at the end of January.

I want to point out a few of the issues, especially billing and payment issues that are most relevant to the types of issues with which we at MMP normally deal. For other issues addressed in the OIG Work Plan that might be of interest to hospitals, see the list at the end of this article.

First, let’s look at some of the issues that are not new to this year’s work plan.

• Compliance reviews of acute care hospitals to determine compliance with selected inpatient and outpatient billing requirements. These types of reviews have been ongoing for several years and address a number of different billing issues, including but not limited to medical necessity of inpatient admissions, inpatient DRG coding, outpatient CPT/HCPCS codes, discharge status, device credits, and units of service.
• One of the most notable aspects of these reviews is that in four of the 87 compliance reviews to date, the OIG has extrapolated the overpayment amount causing an overpayment of hundreds of thousands of dollars to become millions of dollars.
• Inpatient claims for mechanical ventilation to determine if the hospitals’ DRG assignments and payments are appropriate. For certain DRGs to qualify for Medicare coverage, a patient must receive 96 or more hours of mechanical ventilation. Past OIG reviews have revealed overpayments when one of these DRGs was assigned, but the patient did not receive 96 or more hours of mechanical ventilation.
• Outpatient dental claims have also been previously identified at risk for overpayments. Generally dental services are excluded from Medicare coverage with only a few exceptions. Examples of covered dental services would be if teeth have to be removed in order to perform another covered procedure, such as excision of a tumor or to prepare for radiation treatments.

New OIG activities for 2014 include:

• Determining the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary payments. The new admission criteria of a two-midnight expectation are substantially different than the previous admission criteria. Previous OIG reviews found overpayments, inconsistencies, and inappropriate billing under the old rules. It will be interesting to see if the new rules result in improved consistency or not.
• Review of Medicare outpatient payments to hospitals for clinic visits billed at the new patient rate. Prior to this year clinic visits were billed with Evaluation and Management (E&M) codes including both new and established patient codes. The higher paying “new patient” codes were only to be used if the patient had been registered as an inpatient or outpatient at the hospital within the past three years. With the changes to clinic visit reporting for 2014, hospitals no longer have to differentiate new vs. established patients or different levels of service intensity for clinic visits.
• Review of cardiac catheterizations and heart biopsies. Right heart catheterizations performed during the same operative session are included in the heart biopsy procedure and should not be billed separately unless a separate medical necessity for the right heart catheterization can be established eg: evaluate for rejection; failed previous heart procedure; compromised pulmonary status, etc.
• The OIG will review Medicare payments made to hospitals for claims that include a diagnosis of Kwashiorkor to determine whether the diagnosis is adequately supported by documentation in the medical record. Kwashiorkor is a severe form of protein malnutrition that is usually not found in the United States. Coding malnutrition as Kwashiorkor results in a larger payment from Medicare that is not appropriate if the patient really does not have this type of malnutrition.
• Although this is listed as a new issue, the OIG has already released three audit reports addressing this topic from January and February 2014. The reports note that Medicare paid hospitals $711 million for claims that include a diagnosis of Kwashiorkor. The audits have found no claims where the diagnosis of Kwashiorkor was appropriate. Removing the Kwashiorkor diagnosis has changed the DRG in about 18% of the claims reviewed, resulting in total overpayments for the three reviews exceeding $310,000.

Other Topics in the Work Plan include:

Hospitals; Policies and Practices:

Reconciliation of outlier payments
Medicare costs associated with defective medical devices (new)
Analysis of salaries included in hospital cost reports (new)
Impact of provider-based status on Medicare billing
Comparison of provider-based and free-standing clinics (new)
Critical Access Hospitals - Payment policy for swing-bed services
Critical Access Hospitals - Beneficiary costs for outpatient services
Long Term Care Hospitals - Billing patterns associated with interrupted stays

Hospitals: Billing and Payments:

Duplicate graduate medical education payments
Bone marrow or stem cell transplants (new)
Indirect medical education payments (new)

Hospitals: Quality of Care and Safety:

Participation in projects with quality improvement organizations
Emergency preparedness and response - Hurricane Sandy (new)
Oversight of pharmaceutical compounding (new)
Oversight of hospital privileging (new)
Adverse events in inpatient rehabilitation facilities

Nursing Homes:

Questionable billing patterns for Part B services during nursing home stays

Other Providers: Billing and Payments

Diagnostic radiology – medical necessity of high-cost tests
Electrodiagnostic testing – questionable billing
Laboratory tests – billing characteristics and questionable billing
Partial hospitalization programs
High utilization of sleep-testing procedures