Hospitals: Set a Course for Compliance

Use the 2012 OIG Work Plan to chart your hospital’s compliance plan.

By Jillian Harrington, MHA, CPC, CPC-P, CPC-I, CCS-P

Last month, we explained the U.S. Department of Health & Human Services (HHS) Office of Inspector General’s (OIG’s) annual work plan, with details about physician practice interests for 2012, from an audit and evaluation perspective (January Coding Edge, “Make the 2012 OIG Work Plan Work for You”). This month, we’ll focus on the areas of interest for hospitals. By reviewing the same compliance items as the OIG, you’ll be more likely to catch problems first, which allows you to manage corrective action internally.

Several items in the 2012 Work Plan, aimed specifically at the hospital industry, are appearing for the first time. These include:

Accuracy of Present-on-admission Indicators Submitted on Medicare Claims

The OIG is reviewing the accuracy of present-on-admission indicators as submitted on claims starting in October 2008. The Affordable Care Act has placed a payment reduction on hospitals that consistently submit high rates of claims for hospital acquired conditions. Accurately coding these claims is vital for providers to protect themselves from these payment reductions.

Medicare Inpatient and Outpatient Payments to Acute Care Hospitals

This is a very broad-based review that seems to measure compliance effectiveness or compliance best practices; however, given the movement toward data-driven reviews by recovery audit contractors (RACs) and the Centers for Medicare & Medicaid Services (CMS), this may be a foray into predictive modeling by the OIG, as well. Results of this review will be telling for the future of data-driven reviews in the OIG office.

Acute Care Hospital Inpatient Transfers to Inpatient Hospice Care

The OIG will review claims for inpatient stays when the patient was transferred to hospice care, and will examine the relationship (either financial or common ownership) between the hospital and the hospice provider. They will also examine reimbursement from Medicare when determined for similar transfers from the acute care setting to other settings. Although there is not an assumed conflict of interest, OIG wishes to confirm that no such conflicts exist.

Hospice seems to be an area of focus for the OIG in the work plan year: There is a second new review this year also dealing with hospice, nursing facilities, and conflict of interest.

Medicare Outpatient Dental Claims

This item refers not to dental offices, but to dental services provided in the outpatient hospital setting. The OIG will review outpatient hospital services to determine if dental services in that setting were reimbursed according to Medicare guidelines.

Very few dental services are covered under the Medicare program (typically, only items such as wiring secondary to a jaw surgery or removal of teeth for radiation therapy). The OIG has found significant overpayments were made for dental services in the outpatient hospital setting in the past. Hospitals may provide support services only to dentists for these outpatient services, which can make billing confusing. This is an important item for hospitals to review; and perhaps you might accomplish this by running billing reports by provider name.

Inpatient Rehabilitation Facilities

This is a general medical necessity review of inpatient rehabilitation facilities. The OIG is reviewing the appropriateness of admission, as well as the level of therapies being provided. This is a good opportunity for organizations to review their documentation to be assured it meets all minimal criteria for medical necessity support.

Critical Access Hospitals

There are always items in the work plan regarding critical access hospitals (CAHs), but this is a new review. The OIG will compare CAHs to other hospitals, specifically by size, services, and distance from the hospitals. They also will look at the CAHs’ patient load to determine numbers and types of patients.

ASCs and Hospital Outpatient Departments: Safety and Quality of Surgery and Procedures

There has been a significant increase in the number of surgical services provided in the ambulatory surgery center (ASC) setting in recent years. The OIG will be looking at safety and quality of care data across various settings (ASC, hospital outpatient, physician office, etc.).

End-stage Renal Disease: Multiple Items

There are three new items related to end-stage renal disease (ESRD). Two concern the new prospective payment plan: The first reviews payments for services provided to patients who are paid under the new ESRD Prospective Payment System (PPS); the second reviews payments for drugs paid under the new program.

CMS is charged with monitoring the quality of care provided to dialysis patients, and they manage this process through providing oversight and certification services to dialysis facilities. This third OIG review will examine how well CMS is performing these oversight services.

Medicare Payments for Herceptin

Herceptin is a chemotherapeutic drug, provided in a large quantity vial, and the dosage is typically much less than the amount provided. By Medicare guidelines, providers are allowed to bill only the amount of medication actually administered, not the amount dispensed by the pharmacy (amount administered, plus the waste). In the past, some facilities were billing for drug waste, as well. Review your records to verify your billing for Herceptin to be sure this is not an error you’re making.

Medicare Outpatient Payments for Drugs

This review looks at outpatient payments for drugs, specifically issues related to coding and incorrect units. They mention chemotherapeutics twice in the review description, so although this is not a chemotherapy specific review, chemotherapy does seem to be a focus.

Look at your units on drug coding. This is an area where errors can be easily made, which can result in large overpayments (or underpayments).

Examine More In-depth

The aforementioned areas covered in the 2012 HHS OIG Work Plan as well as many other items, new and old, in the plan will affect hospitals. Please take the time to review the work plan to build your auditing and monitoring plan around it. Examine the areas the OIG is examining to learn more about the level of compliance in your organization. Their compliance roadmap will give you great insight into where they are going for the year. Use it to plot out an auditing map for your hospital to help keep you on track during this incredibly complex time in our industry.



Jillian Harrington, MHA, CPC, CPC-P, CPC-I, CCS-P, serves as a clinical technical editor for Ingenix/OptumInsight, and has nearly 20 years of experience in the health care industry. She is a former chief compliance officer and chief privacy official. She teaches CPT® coding as an approved AAPC instructor and is a former member of AAPC’s ICD-10 curriculum development team. She holds a bachelor’s degree in health care administration from Empire State College and a master’s degree in health systems administration from the Rochester Institute of Technology (RIT).


Latest posts by admin aapc (see all)

Leave a Reply

Your email address will not be published. Required fields are marked *