HHS-OIG Issues Fiscal Year 2010 Work Plan

On October 1, 2009, the Department of Health and Human Services Office of Inspector General ("HHS-OIG") released its Work Plan for the 2010 fiscal year ("2010 Work Plan"). The 2010 Work Plan highlights the areas in which the HHS-OIG intends to focus in the fiscal year that began on October 1, 2009. This year is no different from prior years, in that the HHS-OIG has identified several "new start" areas along with several "work in progress" areas.

The 2010 Work Plan serves as an important compliance tool for all types of providers and should be reviewed carefully. This Commentary provides an overview of noteworthy items relating to hospitals and certain other Part A and Part B providers, but it is not an exhaustive listing of all of the focus areas identified by the HHS-OIG.

Hospitals "New Start" Items Identified in the 2010 Work Plan

Hospital Payments for Nonphysician Outpatient Services under the Inpatient Prospective Payment System ("IPPS")

Under the IPPS, hospitals are typically paid in full for inpatient stays and hospitals do not receive additional payments for nonphysician services. Further, separate payments are not made for outpatient diagnostic services 2010 Work Planand admission-related nondiagnostic services rendered up to three days before the dates of admission. The HHS-OIG intends to review the appropriateness of payments for nonphysician outpatient services that were provided to beneficiaries before or during Medicare Part A-covered hospital stays. In the 2010 Work Plan, the HHS-OIG indicated that previous HHS-OIG work in this area "identified significant numbers of improper claims."

Reliability of Hospital-Related Quality Measure Data

Hospitals are required to submit quality data for a set of indicators to the Centers for Medicare and Medicaid Services ("CMS") or risk a reduction in payments. The HHS-OIG intends to review hospitals' controls related to the accuracy of such data.

Hospital Admissions with Conditions Coded Present-on-Admission

For Medicare claims, acute care hospitals are required to report which diagnoses were present when a patient was admitted to the hospital. For some diagnoses, the hospital receives a lower payment if specific conditions were acquired in the hospital. The HHS-OIG intends to review Medicare claims to determine the number of inpatient hospital admissions for which diagnoses were coded as present-on-admission and which types of facilities most frequently transferred patients with a present-on-admission status to other providers.

Hospital Readmissions

If a same-day readmission occurs for symptoms related to, or for evaluation or management of, the prior stay's medical condition, the hospital is entitled to only one diagnosis-related group payment, except in limited circumstances. This issue dates back to 2004 when CMS initiated an edit to reject subsequent claims for same-day readmission. The HHS-OIG intends to determine the extent of the exceptions used and the extent of oversight of readmission cases.

Oversight of Hospitals' Compliance with the Emergency Medical Treatment and Labor Act ("EMTALA")

CMS is responsible for overseeing hospitals' compliance with EMTALA standards. The HHS-OIG intends to identify any variations in EMTALA complaints and cases referred to States, how CMS tracks these complaints and cases, and whether required peer reviews have taken place before CMS has decided whether to terminate noncompliant providers from participation in the Medicare program.

Observation Services During Outpatient Visits

The HHS-OIG intends to assess whether, and to what extent, a hospital's use of observation services affects the care Medicare beneficiaries receive and their ability to pay out-of-pocket expenses for the services. The results of this action item might lead to changes in observation standards.

Coding and Documentation Changes Under the Medicare Severity Diagnostic Related Group ("DRG") System

After CMS revised its hospital inpatient reimbursement system to improve recognition of severity of illness and resource consumption, the number of DRGs increased from 538 to 745. The HHS-OIG intends to review coding trends under the new system to assess whether the additional DRGs are susceptible to potential upcoding.

"Work in Progress" Items Continued from Fiscal Year 2009

Part A Hospital Capital Payments

Capital payments are made to hospitals to reimburse them for assets such as equipment and facilities. The HHS-OIG intends to...