OIG Releases 2009 Work Plan
The Health and Human Services Office of Inspector General (OIG) recently released its annual Work Plan, identifying several areas that will be subject to review in the upcoming year. These examinations will include ongoing assessments of publicly funded healthcare, as well as comprehensive evaluations of programs designed to maintain and strengthen the healthcare infrastructure in Louisiana and across the United States. Among the many issues cited in the report, the OIG will specifically assess the legality of payments made to healthcare providers from the Centers for Medicare and Medicaid Services (CMS) through reviews related to Medicaid, Medicare, Information Systems controls, Gulf Coast Hurricane responses, and the State Children’s Health Insurance Program (SCHIP). This article provides a summary of issues of particular interest to hospitals.
The OIG acknowledged the financial incentives for a hospital to designate related entities as provider-based on its cost reports, and it will investigate the cost reports of hospitals that claim this status for their inpatient and outpatient facilities. Specifically, the OIG will specifically review whether hospitals have met the requirements for hospital ownership of physician practices for purposes of obtaining provider-based reimbursement. The current requirements of provider-based designation of hospital-owned physician practices are provided in 42 CFR § 413.65 (2008). Similarly, the OIG will determine whether Critical Access Hospitals meet the criteria to be designated as such, and if so, whether Critical Access Hospitals are fulfilling the Conditions of Participation. The OIG will also specifically assess whether payments made for Medicare Advantage beneficiaries are appropriate in Critical Access Hospitals.
Of particular importance for Louisiana is a project focused on post-Katrina New Orleans. The OIG will review the financial status of hospitals in the New Orleans area and study the redevelopment of the healthcare infrastructure, which was devastated by Hurricane Katrina. This assessment will include a review of the progress of provider stabilization grants, taking into account the program objectives, such as compensation of healthcare providers for wage rates that had not yet been reflected in the Medicare reimbursement system methodologies. It will also assess whether the grants succeeded in helping recipients recruit and retain licensed healthcare professionals to restore access to healthcare in the area.
Nationwide developmental programs are also subject to review. According to the Work Plan, the OIG will examine payments made to hospitals for new services and technologies that qualify under the Code of Federal Regulations and are not otherwise available under a DRG system. The OIG will pay particular attention to whether hospitals have submitted claims in accordance with applicable criteria. The OIG will also determine whether the amount of capital payments provided to hospitals are appropriate in light of expenditures, such as for equipment and facilities. Likewise, it will assess whether capital payments made under extraordinary circumstances are in compliance with federal regulation per 42 CFR § 412.348(f)(1).
The accuracy of hospital reporting to CMS is another area of examination. As such, the OIG has undertaken a long-term effort to study the costly effects of misreported information and its effect on prospective payment. This effort will continue into 2009. For example, the OIG plans to review wage data provided by hospitals, insofar as it is used to calculate wages for the Inpatient Prospective Payment System (IPPS). The OIG will also review the accuracy of reporting patient transfers from an Inpatient Rehabilitation Facilities (IRF) to another long-term care facility. Since IRFs may receive prospective payment from the Department of Health and Human Services (HHS), the IRF is required to make an adjustment to the reimbursement when patients are transferred. The OIG will review whether these adjustments are made in conformity with the guidelines under 42 CFR § 412.624(f).
Recent security breaches related to federal computers containing protected health information have heightened concerns about protecting sensitive information. Accordingly, the OIG will review security controls implemented by hospitals to prevent the loss of protected health information stored on portable devices, such as laptops and jump drives. In a memorandum issued June 23, 2006, the Office of Management and Budget advised that handlers of sensitive information should consult the procedures set forth by the National Institute of Standards and Technology’s Special Publications 800-53 and 800-53A.
The Medicare Payment Advisory Commission, in its March 2005 testimony before Congress, reported concerns regarding the increasing cost of imaging services for CMS beneficiaries and potential overuse of diagnostic imaging services. In response, the OIG reported this year that it will begin reviewing the use of diagnostic x-rays in hospital emergency departments to determine their appropriateness.
A matter for private hospitals to take note of is a new OIG study that reviews supplemental funding for hospitals. Prior studies by the OIG indicated that supplemental payments made by states to public hospitals revealed excessive expenditure of Medicaid funding. Now, the OIG will shift its focus to review Medicaid supplemental payments made by states to private hospitals. The OIG will also review state Medicaid payments for outliers, the appropriateness of disproportionate share payments (DSH) and the classification of hospitals which have been receiving DSH payments (which, it points out, have been steadily increasing).
Among other issues to be addressed under the 2009 Work Plan, the OIG will determine whether CMS timely handles complaints of non-compliance with the Emergency Medical Treatment and Labor Act (EMTALA), and particularly variances within the regions regarding CMS’ handling and tracking of complaints. Finally, the OIG will review the incidences of and payments for serious medical errors, known as “never events,” in the Medicare population. More information on these studies and the work plan in its entirety can be accessed at the HHS website at http://oig.hhs.gov/w-new.asp.
Ms. Grey is a partner in the healthcare section of Breazeale, Sachse and Wilson, LLP, and Mr. Savage is a student and member of the Health Law Society of the Paul M. Hebert Law Center at the time this article was written.