Stay Current Evaluating Healthcare Audit Priorities

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October 2007Evaluating Healthcare Audit Priorities: The OIG Issues Its 2008 Work Plan By Paul A. Gomez Recently  the  Office  of  Inspector  General  of  the  $48.3 million in 2004. Department  of  Health  and  Human  Services  (“OIG”) Patient Care and Safety in Physician-Owned released its “areas of special concern” for the 2008 fiscal Specialty Hospitals year. As a guidepost to the OIG’s current and future audit initiatives, the 2008 Work Plan is essential reading  The  OIG  intends  to  review  patient  care  and  safety  in for  compliance  officers  and  provider  administrators  physician‐owned specialty hospitals. The OIG noted that charged with setting audit priorities for their internal  concerns regarding the growth of specialty hospitals led corporate  compliance  programs.  As  described  by  the  Congress to impose an 18‐month moratorium on referrals OIG,  a  healthy  compliance  program  is  constantly  to new physician‐owned specialty hospitals. It also noted identifying new risk areas for investigation and audit.  that in June 2005 CMS issued a memorandum suspending The OIG issues the Work Plan as a catalog of risk areas  the processing of provider enrollment applications for new designed  to  guide  hospitals  and  other  healthcare  specialty hospitals. The OIG did not elaborate about what providers  and  suppliers  in  the  operation  of  their  particular concerns led to its apparent concern for patient individual compliance plans.  ...

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• Publié par: Enni
• Nombre de lectures: 40
• Langue: English

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October 2007

Evaluating Healthcare Audit Priorities: The OIG Issues Its 2008 Work Plan

By Paul A. Gomez RecentlytheOfficeofInspectorGeneralofthe DepartmentofHealthandHumanServices(“OIG”) releasedits“areasofspecialconcern”forthe2008fiscal year.AsaguideposttotheOIG’scurrentandfuture auditinitiatives,the2008WorkPlanisessentialreading forcomplianceofficersandprovideradministrators chargedwithsettingauditprioritiesfortheirinternal corporatecomplianceprograms.Asdescribedbythe OIG,ahealthycomplianceprogramisconstantly identifyingnewriskareasforinvestigationandaudit. TheOIGissuestheWorkPlanasacatalogofriskareas designedtoguidehospitalsandotherhealthcare providersandsuppliersintheoperationoftheir individualcomplianceplans. Inthe2008WorkPlan,theOIG’sauditprioritiesfor CentersforMedicareandMedicaidServices(“CMS”) programscoverwellover60pagesofdenselywritten text.Arecitationofalltheprioritiesisbeyondthescope ofthisClientAlertandisbetterlefttoareviewofthe WorkPlanitself.However,thefollowingisanabridged reviewofareasofparticularinterestintheWorkPlan. Payments for Diagnostic X-Rays in Hospital Emergency Departments TheOIGwillreviewasampleofMedicarePartBclaims andmedicalrecordsfordiagnosticX‐raysperformedin hospitalemergencydepartmentstodeterminewhether paymentsareappropriate.Theconcernapparently stems,inpart,fromtestimonygivenbytheMedicare PaymentAdvisoryCommissioninitsMarch2005 testimonybeforeCongress,inwhichitreported concernsabouttheincreasingcostsofimagingservices forMedicarebeneficiariesanditsconcernabout potentialoveruse.AccordingtotheOIG,diagnosticX‐ raysinemergencyroomsincreased9.6percentbetween 2001and2004,costingMedicareapproximately

$48.3millionin2004.

Patient Care and Safety in Physician-Owned Specialty Hospitals

TheOIGintendstoreviewpatientcareandsafetyin physician‐ownedspecialtyhospitals.TheOIGnotedthat concernsregardingthegrowthofspecialtyhospitalsled Congresstoimposean18‐monthmoratoriumonreferrals tonewphysician‐ownedspecialtyhospitals.Italsonoted thatinJune2005CMSissuedamemorandumsuspending theprocessingofproviderenrollmentapplicationsfornew specialtyhospitals.TheOIGdidnotelaborateaboutwhat particularconcernsledtoitsapparentconcernforpatient safety,butdidindicatethatitplanstoreviewstaffing requirementsatspecialtyhospitals,amongotherthings.

Medicare Providers and Assignment Rules

TheOIGwillreviewwhetherMedicareprovidersare followingrelevantassignmentrulesinbillingMedicare beneficiaries.Providerswhoacceptassignmentmustaccept Medicare’spaymentandbeneficiaryco‐payment(the Medicare“allowedamount”),aspaymentinfullforall coveredservices.Providersarenotpermittedto“balance bill”beneficiariesforamountsinexcessoftheMedicare allowedamounts.TheOIGplanstoassessthedegreeto whichthispracticehasoccurred,aswellasbeneficiary awarenessofthesekindsofpotentialviolations. Business Relationships and the Use of Magnetic Resonance Imaging Under the Medicare Physician Fee Schedule

TheOIGplanstoreviewarrangementsunderwhich magneticresonanceimaging(“MRI”)isprovidedunder theMedicarePhysicianFeeSchedule.TheOIGintends toreviewrelationshipsamongphysicians,billing providersandotherswhocollaboratetoprovide

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imagingservicestodeterminewhetherthese relationshipsaffectratesofutilization.TheOIGis particularlyinterestedinfinancialrelationshipsamong theseparties. Medicare Disproportionate Share Payments

Medicaremakesadditionalpaymentstoacutecare hospitalsthatserveasignificantlydisproportionate numberoflow‐incomeMedicareandMedicaidpatients. TheOIG,asitdidlastyear,onceagainidentified disproportionatesharepaymentsasanareaof particularconcern.AccordingtotheOIG, disproportionatesharepaymentshavebeenincreasing steadily.TheOIGintendstodeterminewhether disproportionatesharepaymentshavebeenmadein accordancewithMedicarecriteriaandwhether hospitals’classificationsareappropriate,anditwill reviewthetotalamountsofuncompensatedcarecosts thathospitalsbear. Medicaid Disproportionate Share Hospital Payment Distribution

TheOIGwillreviewtheMedicaidinpatientutilization rateusedtodetermineeligibilityforMedicaid DisproportionateShareHospital(“DSH”)payments. HospitalsarerequiredtohaveaMedicaidinpatient utilizationrateofnotlessthanonepercentbeforebeing eligibletoreceiveMedicaidDSHpayments.Basedupon itsreview,theOIGmayrecommendchangestothe program,includingthethresholdrequirementfor hospitalstoqualifyforMedicaidDSHpayments. Medicaid Hospital Outlier Payments

TheOIGwillreviewstateMedicaidpaymentsfor hospitaloutliers,whicharecasesthatincur extraordinarilyhighcosts.Therearecertainstatesthat makesupplementalMedicaidpaymentsforhospital outliersbasedonmethodologiesthataresimilarto Medicaremethodologies.AccordingtotheOIG,ithas previouslydeterminedthattherewerecertain vulnerabilitiesinvolvingMedicarehospitaloutlier payments.Asaresult,theOIGintendstodetermine whethertherearesimilarvulnerabilitiesinvariousstate Medicaidagencies’methodologiesofcomputing inpatienthospitalcostoutlierpayments. High Utilization of Ultrasound Services

TheOIGplanstoreviewservicesandbillingpatternsin geographicareaswithhighutilizationofultrasound

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servicespaidundertheMedicarePhysicianFee Schedule.Itwillfocusondisproportionatelyhigh Medicareallowedchargesandservicesperbeneficiary anddisproportionatelyhighpercentagesofbeneficiaries receivingultrasoundservicesrelativetotherestofthe country.Inareasofhighutilization,theOIGintendsto examineserviceprofiles,providerprofilesand beneficiaryprofiles. High Density of Independent Diagnostic Treatment Facilities

TheOIGwillexamineservicesandbillingpatternsin geographicareaswithhighconcentrationsof independentdiagnostictreatmentfacilities(“IDTFs”). AccordingtotheOIG,oneofitspreviousreviews identifiedseveralproblemswithIDTFs,including noncompliancewithMedicarestandardsand potentiallyimproperpaymentsof$71.5million.The OIGintendstoreviewserviceprofiles,provider profiles,beneficiaryprofilesandbillingpatternsinIDTF high‐densityareas. Physician Reassignment of Benefits

TheOIGwillreviewtheextenttowhichMedicare physiciansreassigntheirbenefitstootherentities.The OIGcitedinvestigationsinSouthFloridathat,according totheOIG,revealedschemesinwhichfraudulent providersobtainidentifyinginformationabout legitimatephysiciansandrequestreassignmentontheir behalf.TheOIGbelievesthatalargenumberof reassignmentsmayindicatefraudulentorabusive activity. Evaluation of “Incident To” Services

Consistentwithlastyear’sWorkPlan,theOIGremains committedtoidentifyingandreviewingservices performed“incidentto”selectedphysicians’ professionalservicesandwilldeterminetheextentto whichtheservicesmetMedicarestandardsformedical necessity,documentationandqualityofcare.TheOIG willalsoreviewtheappropriatenessandqualifications ofthestaffwhoperform“incidentto”services. Medicare Part D Duplicate Claims

TheOIGindicatedthatitwillreviewCMScontrolsto preventduplicatePartDclaimsforthesame beneficiary.AccordingtotheOIG,inJanuary2007, thereweremorethansixmillionbeneficiariesdually eligibleforMedicareandMedicaidassignedtoPartD

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plans.Thesebeneficiariesarepermittedtochangetheir enrollmentinprescriptiondrugplansmonthly,andthe OIGwantstomakesurethatthepaymentsmadeto plansarecorrectandnotduplicated. Duplicate Medicare Part A And Part B Claims Included With Part D Claims

TheOIGwillreviewanddeterminewhetherPartD claimsarealsobeingsubmittedunderMedicarePartA andPartB.DrugsprescribedforaPartDbeneficiaryare nottobepaidforunderPartDifthedrugwas prescribedanddispensedoradministeredunderPartA orPartB.TheOIGwilldeterminewhetherpayments madetoPartDarecorrect,supportedandnot duplicatedinPartAandPartB. Coordination and Oversight of Medicare PartB and PartD to Avoid Duplicate Payments

TheOIGwilldeterminewhetherthereissufficient coordinationtopreventduplicatepaymentsfor prescriptiondrugs.DrugsthatarepayableunderPartB shouldnotbecoveredunderPartD.TheOIGwill reviewCMS’scoordinationandoversightprocessesand determinewhethertheyareadequate. Prescription Drug Plan Sponsors’ Detection and Reporting of Fraud and Abuse

TheOIGwillreviewtheextenttowhichprescription drugplan(“PDP”)sponsorsdetectandreportMedicare PartDfraudandabusetoCMS.AccordingtotheOIG, oneofitspriorreportsfoundthatsomePDPsponsors’ complianceplansdidnotaddressallrequiredelements regardingfraud. Laboratory Services Rendered During an Inpatient Stay

TheOIGwillreviewMedicarePartBpaymentsfor laboratoryservicesrenderedduringaninpatientstay.In supportingitsfocusonthesepayments,theOIGnoted thatlaboratoryservicesfurnishedtohospitalinpatients aregenerallyincludedinhospitals’MedicarePartA payments. Separately Billable Laboratory Services Under the End Stage Renal Disease Program

TheOIGwillreviewproviders’compliancewithcurrent paymentpoliciesforautomatedmultichannelchemistry (“AMCC”)testsfurnishedtoendstagerenaldisease

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(“ESRD”)beneficiaries.Thecurrentfacilitypayment, thecompositerate,includespaymentsforcertain AMCCtestsperformedroutinelyatspecified frequencies.AnyAMCCtestsperformedinexcessof specifiedfrequenciesornotincludedinthecomposite ratearetobebilledseparately,providedthatmedical necessityisdocumented.AccordingtotheOIG,prior reviewsithasconductedfoundthatproviderswere paidseparatelyforAMCCtestsincludedinthe compositerate. Monitoring Medicare Part B Drug Prices: Comparing Average Sales Prices to Widely Available Market Prices TheOIGwillreviewwidelyavailablemarketprices (“WAMPs”)forcertainprescriptiondrugscoveredby PartBandcomparethemtoaveragesalesprices (“ASPs”).InaccordancewiththeMedicarePrescription Drug,ImprovementandModernizationAct,theOIG willnotifytheSecretaryofHHSiftheASPforaselected drugexceedstheWAMPbyathresholdoffivepercent. ItwillalsocompareASPstoWAMPsandidentifydrug pricesthatexceedthethreshold. Changes in Average Sales Price for Part B Drugs TheOIGwillreviewtheextenttowhichASPsfor MedicarePartBdrugsfluctuatefromquartertoquarter. ItwillalsoidentifytheASPswiththegreatestquarterly fluctuations. Calculation of Average Manufacturer Prices TheOIGintendstoreviewcertaindrugmanufacturers toassessthemethodologiestheyusetocalculatetheir averagemanufacturerprices(“AMPs”)fortheMedicaid drugrebateprogramandforMedicaiddrug reimbursementinordertodeterminelevelsof compliance. Pharmacies’ Ability to Purchase Drugs at the Average Manufacturer Price TheOIGwillassesspharmacies’abilitytopurchase MedicaiddrugsatorneartheAMP.Legislationmandates thatAMPdatabemadeavailabletoallstatesonamonthly basis,withtheapparentintentbeingthatgreater transparencyofpricinginformationwillfostergreater competitionindrugpricing.AccordingtotheOIG,most stateMedicaidprogramshavebasedpharmacy reimbursementonapercentageoftheaveragewholesale

StayCurrent Oversight of Medicare Advantage Plans’ price(“AWP”),whichtheOIGbelievesisaflawed Marketing Practices methodologybecausepharmacies’paymentstodrug manufacturersarelowerthantheAWPs. TheOIGplanstoreviewCMS’soversightofmarketing Skilled Nursing Facility Consolidated Billing andsalespracticesconductedbyMedicareAdvantage (“MA”)plans.RegulationsprohibitMAplansfrom Asitwasinlastyear’sWorkPlan,theOIGisconcerned engagingindiscriminatoryactivityandfromconfusingor aboutimproperbillingunderMedicarePartBforitems, misleadingthepublic.Violationsoftheseprohibitionsmay suppliesandservicesprovidedtobeneficiariesduring resultinsanctions.TheOIGwillevaluatethesanctionsthat PartAMedicarecoveredstays.Asitalsostatedlast CMShasimposedforsuchviolations,theextenttowhich year,theOIGwillassesstheeffectivenessofCommon CMShasworkedwithstategovernmentstocurbthese WorkingFileeditsestablishedin2002topreventand violations,andtheextentofcomplaintsaboutmarketing detectimproperpayments. andsalespractices. ™™™ It may be wise for healthcare providers and suppliers to reassess the priorities and quality of their compliance programs in light of the publication of the 2008 Work Plan. Although it is not practical or realistic to expect that one could implement internal investigations relating to all the Work Plan’s audit priorities, the Work Plan, along with operational experience, may assist providers and suppliers to thoroughly assess their respective compliance plans’ priorities.

If you have any questions concerning these developing issues, please do not hesitate to contact:

18 Offices Worldwide

Los Angeles

Paul A. Gomez 213-683-6132 [e-mail]

Paul, Hastings, Janofsky & Walker LLP

www.paulhastings.com

StayCurrent ispublished solely for the interests of friends and clients of Paul, Hastings, Janofsky & Walker LLP and should in no way be relied upon or construed as legal advice. For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. These materials may be considered ATTORNEY ADVERTISING. Paul Hastings is a limited liability partnership. Copyright © 2007 Paul,Hastings, Janofsky & Walker LLP.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations governing tax practice, you are hereby advised that any written tax advice contained herein or attached was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

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