Let this year’s OIG activities guide your physician compliance work plan

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

The U.S. Department of Health and Human Services (DHHS) Office of Inspector General (OIG) annual Work Plan, released each October, describes the activities each office within the OIG will undertake for the upcoming federal fiscal year. Each year, some items are added, some are removed, and some remain ongoing. By examining this plan, you can get an idea of what the federal government feels are areas of concern in the provider sector. You can then take this information and create your own compliance work plan, including reviews of these areas in your auditing and monitoring plan for the year.

New Work Plan Items for Physicians

In the 2010 OIG Work Plan, the first item of note for physicians is that the physician section has been eliminated all together. In the past, there was a section entitled “Physicians and Other Health Professionals.” This year, the section dealing with physician services is entitled “Other Part A and Part B Providers Payments.” This does not mean that the OIG is done looking to physician practices as a way to fight fraud and abuse in the health care industry. There are new items affecting the physician sector in the redesigned plan, and it is important to note these new items, as well as the items remaining from previous work plans.

Medicare Incentive Payments for E-Prescribing—Unlike other similar programs in the past, the OIG hasn’t given us their typical reprieve for the first year review of a new program. They jumped right in to reviewing the new electronic prescribing, or e-prescribing, program immediately, keeping us on our toes for claiming payments under this new program. Eligibility for the e-prescribing incentive payment is based on the provider’s eligibility, as well as its status as a successful electronic prescriber. To be a successful e-prescriber, the provider must be using a qualified system and must successfully submit the appropriate G codes on at least 50 percent of claims falling within the denominator code set. E-prescribers are encouraged to submit G codes on all of their claims within the denominator set to ensure fulfillment of this reporting requirement.

The OIG will be reviewing the payments made under the program, and verifying whether providers were eligible for these payments. They are also planning to look at the system for recovering payments made in error to determine if the Centers for Medicare & Medicaid Services (CMS) has put the appropriate steps in place to recover those funds efficiently and effectively.

Medicare Payments for Part B Imaging Services—This review is directed at physicians billing for imaging services under the Medicare Physician Fee Schedule (MPFS). Payments made under the MPFS are based on the Relative Value Unit (RVU) system, which breaks the service into different categories of cost. The OIG seems specifically concerned about the practice expense component, telling us that “the Social Security Act, § 1848(c)(1)(B), defines ‘practice expense’ as the portion of the resources used in furnishing the service reflecting the general categories of expenses, such as office rent, wages of personnel, and equipment.”

Specifically, the OIG will be examining the practice expense components of services, including the equipment utilization rates, to determine if current payments accurately reflect actual expenses incurred by physician practices as well as current industry practices. If you are billing for imaging services from your practice, this is an excellent time to look at the billing component of your services to make sure coding is accurate and documentation meets appropriate guidelines. These types of errors can be easily uncovered while the OIG is examining this more specific service component.

Appropriateness of Medicare Payments for Polysomnography—In the past several years, Medicare has seen a significant increase in the number of beneficiaries seeking sleep studies and related services. There are very specific guidelines in place for polysomnography coverage, as can be found in the Medicare Benefit Policy Manual. The OIG plans to look at the appropriateness of Medicare payments for these services, as well as factors contributing to the rise of Medicare payments in this area. They also plan to assess provider compliance with federal program requirements for polysomnography. If this is a service your physician practice performs, be aware of the guidelines for operating a sleep study facility, such as minimum staffing and on-site and on-call physician requirements. The OIG will be examining coding and documentation during this review, so be sure coding is correct, and documentation not only accurately reflects the services performed, but also medical necessity for these services.

Medicare Billings with Modifier GY—Modifier GY Item or service statutorily excluded or does not meet the definition of any Medicare benefit is used on physician claims in the event that the service provided does not meet the definition of a covered service, or is a service that has been statutorily excluded. Use of this modifier is sometimes confused with the use of other somewhat similar modifiers, such as modifier GA Waiver of liability statement on file and modifier GZ Item or service expected to be denied as not reasonable and necessary.

Beneficiaries are financially liable for services billed with modifier GY and providers are not required to detail these charges in advance with the patients. Some patients are left with large bills they were unaware they would receive, and cannot pay. The OIG is examining patterns and trends involving the use of modifier GY to determine if beneficiaries are somehow being defrauded.

This is obviously not a traditional OIG review because these are not services that have been paid by Medicare, but are specifically denials. This doesn’t mean you don’t need to be on your toes with regard to billing, coding, and documentation. Verify your practice is appropriately using modifier GY, with services that are either statutorily excluded from the program, or simply do not meet the definition of a covered service.

Medicare Providers’ Compliance With Assignment Rules—As Medicare participating providers, physicians agree to accept payment on assignment from the program directly, and also agree to accept the Medicare-allowed amount as payment in full for those services (payment from the program, plus any owed co-insurance or deductible). The OIG is taking a look at physician billing practices to ensure providers are not inappropriately billing beneficiaries in excess of the allowed amounts.

If you are a Medicare participating provider, review your balance billing practices to assure you are not billing Medicare patients in excess of their deductible and co-insurance amounts—except in cases when it is appropriate to do so (such as with an Advanced Beneficiary Notice (ABN) in place, or a statutorily excluded service). Like the review involving modifier GY, this is not a typical OIG review because it doesn’t involve excess payments by the government; however, it seems the OIG has become more interested in beneficiaries being charged appropriately, and these reviews seem to be on the rise.

Note Other Items in the Physician Work Plan

There are many other items to note in the work plan this year involving physician practices. Some are new to the plan, whereas others have been in the plan for some time. A few of these items include:

  • Place of Service errors
  • Evaluation and management services during global surgery periods
  • Services performed by clinical social workers
  • Laboratory test unbundling
  • Payments for services ordered or referred by excluded providers
  • Medicare payments for transforaminal epidural injections
  • Medicare services billed with dates of service after beneficiaries’ dates of death

There are also reviews in other sections of the work plan that may be pertinent to your practice, such as the Medicaid program sections, or the Public Health program sections. Be sure to check out the entire work plan to know where you stand with the items the OIG be reviewing this year. The 2010 OIG Work Plan is available for free online at http://oig.hhs.gov/publications/docs/workplan/2010/Work_Plan_FY_2010.pdf.

Avoid Scrutiny from the OIG

If you accept funds from the federal government (Medicare, Medicaid, etc.), you’ll never completely avoid interaction with these watchdog government agencies. Their role is to protect the Medicare trust fund to assure there is funding available for future generations. Not all interaction with the OIG or other benefit integrity groups has to be negative or frightening. Having an active compliance program will help to mitigate damages if you do have errors or problems in the future. Part of that program needs to be an auditing and monitoring plan, which should be updated annually to account for the risks your institution faces. Make sure to include in your auditing and monitoring work plan the types of items the government agencies and private payers are concerned about. It’s a great way to start a new year, and an even better way to ensure compliance.


Jillian Harrington, MHA, CPC, CPC-I, CCS-P, is president/CEO of ComplyCode, a health care compliance consulting and education firm in Upstate New York. She holds a Masters in Health Administration from the Rochester Institute of Technology (RIT), and is a former member of the AAPC National Advisory Board (NAB).


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