On October 2, 2012, the OIG released its “Work Plan for Fiscal Year 2013” (“Plan”) in which it set out its priorities for the coming year. The theme of the Plan can be summed up with one word, “Accountability.” The OIG will continue to strive to hold providers, including physicians, hospitals and other health care organizations, and Medicare contractors accountable for strict compliance with federal programs and initiatives as well as for the quality of care they are providing to government beneficiaries. None of the stated priorities for 2013 were a surprise since they are consistent with the OIG’s recent work on a number of fronts.
In 2013, the OIG will continue to focus on quality of care initiatives, hospital billing and payment issues, and the effectiveness of Medicare contractors, including Medicare Administrative Contractors (“MACS”), Recovery Audit Contractors (“RACs”) and Zone Program Integrity Contractors (“ZPICs”).
Quality of Care
In November of 2010, the OIG released a report entitled “Adverse Events in Hospitals: National Incidence Among Medicare Beneficiaries” which found that 13 percent of Medicare beneficiaries received care, after being admitted to a hospital, that resulted in permanent harm and 13 percent received care that resulted in temporary harm. In light of these disturbing findings, the OIG stated in its Plan that it will “build on that work and review the care that Medicare beneficiaries receive once they’re discharged from the hospital to other post-acute care settings, including skilled nursing facilities.” The OIG intends to evaluate Centers for Medicare and Medicaid Services’ (“CMS”) oversight of poorly performing nursing homes, and the prevalence of avoidable readmissions to an acute care setting from nursing homes, as part of its quality of care review activities. The OIG also stated its intent to focus investigative efforts on the use of atypical antipsychotic drugs in nursing homes and compliance with requirements for physicians’ fact-to-face visits with patients before certifying a patient for home health services.
The OIG’s focus on quality of care oversight is consistent with CMS’s final rule with comment period issued on November 1, 2012, regarding the Medicare program, in which CMS implemented a physician value-based payment modifier under the Affordable Care Act that will apply to all physicians by the start of 2017. The physician value-based payment modifier is intended to adjust payments under the Medicare physician fee schedule based upon a comparison of the quality of care furnished to the cost of such care, such that physicians with higher quality outcomes and lower costs will be paid more.
Billing and Payment Oversight
The OIG will focus investigative and audit efforts in 2013 on hospital billing and payment issues in areas it views as presenting significant concerns and which include: payments for mechanical ventilation (coding/processing concerns); payments for cancelled surgical procedures; and compliance with Medicare transfer policies. The OIG will investigate whether payments are being made for cancelled surgical procedures as well as for the rescheduled surgeries, such that Medicare is effectively paying for the same procedure twice. The OIG also intends to focus its efforts on whether payments are being made to hospitals for discharging patients when in fact such patients should have been coded as transferred patients for billing purposes. Additionally, the OIG will focus on state policies related to collecting Medicaid rebates for physician-administered drugs.
Medicare Contractor Effectiveness
The OIG further emphasized in its Plan review of the effectiveness of MACs, RACs and ZPICs in conducting their role as Medicare contractors in order to ensure effective programs and to safeguard the tax payer dollars allocated to these initiatives. Stuart Wright, Deputy Inspector General for Evaluation and Inspections at OIG, stated in a webcast on October 24, 2012 that the OIG will be evaluating CMS’s oversight of Medicare contractors, and investigating the contractors themselves, due to recent problems that have been uncovered in evaluations thereof. Mr. Wright stated “[f]or example, we found in some instances low numbers of proactive case development, low numbers of referrals to law enforcement, and we found other problems associated with lack of access to data and inconsistent definitions related to broad terms.” The MAC review will be focused on whether MACs are meeting performance standards and the extent to which CMS identified, and MACs addressed, any performance deficiencies. The RAC review will focus on whether the contractors are identifying improper payments and referring potential fraud cases to law enforcement, and the ZPIC review will focus on CMS oversight of the program.
Kristen Larremore is an associate in the Health Care and Corporate, Finance and Securities practice groups at Bradley Arant Boult Cummings LLP.
