Keep Your Hospital Compliant with OIG’s Work Plan

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  • February 25, 2011
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In December’s Coding Edge, we examined the 2011 OIG Work Plan from the perspective of the physician practice (“Center a Work Plan Around 2011 OIG Activities,” pages 44-45). This month, we’ll take a look at items affecting the hospital setting.
There are several new items in the hospital section of this year’s Work Plan, as well as returning items from prior years. Although we won’t review these “returning items” in depth, it is important for you to keep them in mind. Determine if they are risk areas for your facility, and decide if you should include them in your own compliance auditing and monitoring plan.
Most hospital-related reviews can be found within the Centers for Medicare & Medicaid Services (CMS) portion of the Work Plan. You should focus most of your effort in that section. If you are involved in academic or research medicine, however, be sure to review the Public Health Agencies section; the included information from the National Institutes of Health (NIH) and the U.S. Food and Drug Administration (FDA) usually is helpful when developing your compliance audit plans.

Hospital Payments for Nonphysician Outpatient Services

This item is specific to hospitals not paid under the Prospective Payment System (PPS). Based on the appropriate regulations, all diagnostic services and other admission services provided one day prior to the admission are considered part of that admission. The OIG will review all outpatient claims paid for that one day time period prior to admission to see if they meet these criteria.
As a non-PPS facility, have edits built into your system to check for these services before the claim goes to the payer. If you do not have these types of edits currently built into your systems, adding this to your audit plan for the year is a great start. Then, work with your software vendor and/or your clearinghouse to get these edits built into your systems.
Although this is not an item for PPS hospitals, this is a good reminder of three day window, and the recent changes there. Statutory changes were made to the three day window in June 2010, and the Inpatient Prospective Payment System (IPPS) rule for 2011 also includes rules on those changes.
In basic terms, the payment window is now broken into two separate time frames: the day of admission, and the three days prior to admission. On the day of admission, all services, diagnostic and non-diagnostic, provided by the admitting hospital or any of its entities must be bundled to, and billed as part of, the inpatient admission. Under the old rule, only diagnostic and related non-diagnostic services had to be bundled into that hospital bill. The definition of “related” now is redefined by CMS to include any outpatient service “clinically associated with the reason for a patient’s inpatient admission.” There is an established item in the 2011 OIG Work Plan dealing with the three day window, although it’s uncertain how these new rules will interact with this already established review. Be sure you’re aware of what the current rules are, and your systems are programmed to edit based on those guidelines.

Medicare Excessive Payments

In general, the biggest errors seen in HCPCS Level II coding are units of service errors. The OIG is concerned that there are excessive payments being made due to such coding errors. Hospitals wishing to review for this easily can incorporate this into an existing coding auditing plan. Because much of this coding is charge master driven, hospitals not only should examine the individual claims, but also review the process of how a claim is coded. This may provide insight on if, and how, claims are being miscoded.

Hospital Occupational Mix Data

The federal government implemented an occupational mix program to create more accuracy in the wage index, due to a lack of confidence in those figures. Now, there appears to be some concern about the accuracy of the data being submitted to CMS to create the more accurate wage index data. Examine your process for putting together your data for submission for the occupational mix. Are you aware of this process? How much effort is your facility putting into making sure good quality data is submitted?

Hospital Reporting for Restraint and Seclusion Related Deaths

Conditions of Participation state that all restraint- and seclusion-related deaths, as well as all deaths within 24 hours of when a patient is removed from a restraint or seclusion, must be reported to CMS. The agency then will determine if an investigation is warranted. There is some concern by the OIG as to whether all deaths are being reported, and that the reporting process might somehow hinder the investigation process.
Determine first who is currently handling this process for your facility. The process needs to be reviewed to verify that you are, in fact, reporting all appropriate deaths to CMS. All deaths occurring within 24 hours of the removal of the restraint or seclusion should be reported as such.

Medicare Brachytherapy Reimbursement

This is a general review of brachytherapy services in the hospital setting to determine whether services were paid in accordance with Medicare requirements. Does your facility perform the placement of these radioactive sources? If so, your facility should conduct reviews to verify that requirements as put forth under Medicare Improvements for Patients and Providers Act (MIPAA) are being met. MIPAA extended the cost to charge payment methodology for brachytherapy devices through the beginning of 2010, thereby avoiding the planned change in 2008 to the Outpatient Prospective Payment System (OPPS) payment methodology. Although these changes focused on the devices themselves, don’t focus your review solely on the device. Make sure you review the entire service to catch any potential errors because the OIG surely will during its reviews.

Replacement of Medical Devices

There are many instances when a device is replaced in a patient, and that device is received at a reduced cost, or at no cost. This must be reflected in billing to the program. This item from the Work Plan focuses on that area, reviewing inpatient and outpatient claims to determine if they were submitted properly when the device was received at a reduced cost. Your facility should have a process in place where your purchasing (or appropriate) department works closely with your billing staff to make sure billing is done properly when the facility does not pay full price for any medical device.

Hospital Inpatient Outlier Payments

Outliers have been an issue for years, showing up on the Work Plan for a year or two and then going off. They have shown up here again in 2011, with a specific focus on the inpatient realm. There appears to be some new concern because of an upswing in outlier payments in 2009, as well as a large number of whistleblower suits on the same topic. If you are a facility with a high number of outlier payments, take a look at your processes. You also may wish to put a pre-submission process in place for any outlier claim to verify that coding and charges are accurate.


The Medicaid section of the Work Plan does not have any new hospital-related items, and the established hospital-related items seem to be related more to “controls” than to items for which hospitals can prepare. As mentioned in December’s OIG article, your state Medicaid integrity official may have released a work plan of its own. Research your state to determine the status of the Medicaid Integrity Program, and to determine whether they’ve released a work plan. It could be a good companion to the OIG document.

Be Prepared

To avoid scrutiny from the OIG, be prepared. Have an active compliance program, and not simply a written program that sits on a shelf. Audit and monitor regularly throughout the year. Educate based on what you find in that auditing. Review the OIG 2011 Work Plan—and not simply the new aforementioned items, but also the items that have appeared previously, such as observation services, hospital re-admissions, and provider based entities. Examine what types of services are risk areas for your organization, and incorporate all of these issues into your own work plan for the year. By using the governments own roadmap to their work, you can make your organization more compliant and, hopefully, a more efficient and effective facility.

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No Responses to “Keep Your Hospital Compliant with OIG’s Work Plan”

  1. Vina says:

    I feel so much hapiepr now I understand all this. Thanks!