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Managing Hospital Compliance

Hospitals would do well to monitor their plan using the 2009 OIG Work Plan.

By Jillian Harrington, MHA, CPC, CPC-I, CCS-P
In the January issue of Coding Edge, we looked at the 2009 Office of Inspector General (OIG) Work Plan as it pertains to physician practices. We would be remiss, however, if we didn’t look at the items relating to hospitals, and how hospitals can best use this information to create a compliance work plan.
Each October, the Department of Health and Human Services (DHHS) OIG gives us a bit of insight into what the upcoming year will bring. Their annual Work Plan describes the activities within each office of the OIG for the upcoming federal fiscal year. Some items are added, some are removed, and some carry on. By examining this plan, you can see what the federal government feels are hospital sector concerns and use this information to devise an auditing and monitoring plan for the year.

The Hospital Work Plan

Additional Part A Medicare Capital Payments for Extraordinary Circumstances
The Centers for Medicare & Medicaid Services (CMS) has a program where hospitals can request additional capital payments be made to them under extraordinary circumstances. Eligibility for additional capital payments requires unanticipated capital expenditures in excess of $5 million for circumstances beyond the facility’s control, such as floods, fires, and earthquakes. Certain criteria must be met and reviewed to determine whether a facility should receive these payments. You are at a risk for not meeting the criteria, for example, if the unanticipated expenditure doesn’t exceed $5 million after net proceeds from any other payment sources, such as, insurance, or local, state or federal government funding programs. If you are a recipient of such a payment, take a look at your replacement capital funding to be sure you still meet the federal criteria following receipt of all other payment sources.
Provider-Based Status for Inpatient and Outpatient Facilities
For several years, a provider-based status item has appeared on the OIG’s Work Plan. This item is slightly different than in past years, and should be noted as such. Hospitals with provider-based facilities can receive enhanced reimbursement, and are often a target of government inquiry. This review is aimed at facilities with cost reports claiming provider-based status to determine the potential impact on the Medicare program for those facilities that improperly claim provider-based status. If you are a facility claiming provider-based status for any of your sites, check that you meet all criteria laid out in the guidelines originally set in 2001 and revised in 2005.
Hospital Ownership of Physician Practices
In a different approach to a provider-based status review, the OIG will look at Medicare reimbursement appropriateness for hospital-owned physician practices with the provider-based designation. Hospital requirements to obtain provider-based status for purchased physician practices were revised by CMS in 2005. The revisions address issues like patient population served, practice location, and the hospital’s control level and governance over the physician practice. If your hospital-owned physician practices are operated as provider-based clinics, now is a great time to determine if you meet the criteria to attain the provider-based designation.
Reliability of Hospital-Reported Quality Measure Data
Within the last few years, quality data reporting has gone from simply a statistical task to one that can effect reimbursement. The advent of consumer tools like the Hospital Compare Web site  make it more important for quality data submitted to CMS to be accurate and complete. This year, the OIG will look at the quality data submitted by hospitals to ensure they have implemented sufficient controls for creating a valid data set.
Who submits quality data for your facility? Review the process for putting this data together, and verify if appropriate quality assurance checks are occurring on this data prior to submission. Also, do you have similar submissions due for other entities, such as State Health Departments or benchmark projects you are involved in? If so, maximize your efforts toward gathering by creating efficiencies in data collections for all quality measures.
Coding and Documentation Changes Under Medicare Severity Diagnosis Related Group (MS-DRG) System
In October of 2007, MS-DRGs were implemented to help recognize illness severity in the Medicare inpatient reimbursement system. The OIG has quickly decided to review this new system through coding trends and patterns to determine its vulnerability to potential upcoding. The key to accuracy in coding under MS-DRGs is high-quality clinical documentation. To review your compliance with this new system, a three part review is essential:
1. Look at your clinical documentation process. Have you implemented a documentation improvement team, or concurrent coding processes?
2. Have your finance department review the financial impact of MS-DRGs. Are there any areas of increased reimbursement that will serve as red flags for government reviewers? If so, take the time to review those claims.
3. Provide continuing education for coders on MS-DRGs, inpatient coding, and improving clinical documentation for the new system’s coding side.
Serious Medical Errors (Never Events)
CMS issued a rule in 2007 aligning patient safety, quality, and payment methodology aimed at denying payment for certain hospital acquired conditions through coding of present on admission (POA) indicators. At the same time, legislation was passed requiring the OIG to study serious medical errors known as Never Events, examining the types of events and what payments are being made by any party in these instances. The review that appears in the Work Plan this year pertains to this legislation, as well as a review of hospitals’ compliance with the new Present on Admission coding requirements. Some state governments are also moving forward with mandated never event and hospital acquired condition (HAC) denials. Now is the time to examine your adverse event reporting process, and get finance, risk management, quality assurance, HIM, coding, and administration all on the same page with regard to billing and coding for both serious medical errors and hospital acquired conditions.

Certified Inpatient Coder CIC

  • Many of this year’s OIG Work Plan items continue from the previous year’s plan. Some of these items include:
  • Part A Hospital Capital Payments
  • Part A Inpatient Prospective Payment System Wage Indices
  • Payments to Organ Procurement Organizations
  • Inpatient Hospital Payments for New Technologies
  • Critical Access Hospitals
  • Medicare Disproportionate Share Payments
  • Inpatient Psychiatric Facility Emergency Department Adjustments
  • Provider Bad Debts
  • Medicare Secondary Payer
  • Payments for Diagnostic X-rays in Hospital Emergency Departments

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