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Hospitals Face New Reviews in OIG’s Work Plan for Fiscal 2010

October 13, 2009:

Adverse events, home health resource group assignment, inpatient rehabilitation facility payment, and policies related to the American Recovery and Reinvestment Act of 2009 are just a few of the items on the Office of Inspector General’s list of issues to study in 2010. Being familiar with the OIG’s work plan each year helps health care providers assess their own compliance risks.

The mission of the OIG is to protect the integrity of the department’s programs through audits, investigations, and other activities. The agency’s annual work plan describes projects the OIG plans to initiate or continue in the upcoming year pertaining to hospitals, skilled nursing facilities, home health agencies, outpatient services, and medical equipment, in addition to physician services. So the work plan provides a type of road map of what the government is investigating: what are the areas and issues the OIG intends to audit, what new areas will be reviewed, and which reviews remain included in the plan year after year.

Compliance has become a major concern for hospitals and other health care providers as a result of increasing regulatory requirements. With total health care expenditures in the trillions, it’s no surprise that health care is one of the most heavily regulated industries—and the risks associated with noncompliance are significant.

The 2010 work plan includes both new and ongoing reviews addressing hospitals, home health agencies (HHA), nursing homes, and hospice care. For hospitals, adverse events continue to top the list. The terms “never event” and “adverse event” describe patient harm resulting from medical care, such as surgery on the wrong patient. Payments for and occurrences of “never events” were a focus of the 2009 work plan, and in 2010, the plan includes five different adverse event reviews, such as hospital-acquired conditions (HAC). The OIG also plans to establish a panel of physician patient-safety experts to review incidences of adverse events and assess whether the event was preventable.

The agency also plans to review hospital readmission, defined as admission of a patient fewer than 31 days after the patient is discharged from a hospital. Quality improvement organizations are required to review hospital readmissions and determine whether the hospital met professional standards of care. Based on previous OIG work, Medicare will reject subsequent claims for beneficiaries discharged and readmitted to the hospital on the same day and, in 2009, CMS announced a program focused on eliminating unnecessary hospital readmissions. Hospital admissions with conditions coded as present on admission (POA) will also be reviewed to determine which diagnoses are most frequently reported as POA.

Prior reviews have identified a significant number of errors on hospital claims for nonphysician outpatient services. Under the inpatient prospective payment system (IPPS), payment is not allowed for outpatient diagnostic services and admission-related nondiagnostic services rendered up to three days before the date of admission. In 2010, the OIG will review the appropriateness of payments for nonphysician outpatient services provided up to three days before or during Medicare-covered stays at acute care hospitals.

Other areas the OIG will review include compliance with various aspects of the home health prospective payment system (PPS). Home health agencies should review claims for services and medical supplies provided to beneficiaries in home health episodes and assess the accuracy of the home health resource group (HHRG) assignment. The OIG will also review Outcome and Assessment Information Set (OASIS) data submitted by Medicare-certified HHAs for accuracy and completeness. The list also includes a review to determine whether Medicare payments to inpatient rehabilitation facilities (IRF) were made correctly. In addition, the OIG plans to review Medicare payments for durable medical equipment (DME) and physician self-referrals to DME suppliers.

The 2010 work plan also includes reviews of the many issues related to the American Recovery and Reinvestment Act of 2009 such as internal policies and procedures related to the new notification requirements involving breaches of personally identifiable information as well as incentive payments for electronic health records (EHR) to hospitals and physicians that demonstrate meaningful use of certified EHR technology.


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