OIG Publishes FY 2010 Work Plan

The Office of Inspector General (the “OIG”) has released its Fiscal Year 2010 Work Plan (the “2010 Plan”). The 2010 Plan describes the OIG’s new and ongoing projects for the 2010 Fiscal Year to carry out its mission of, in part, ensuring the integrity of the Medicare and Medicaid programs. Many of the projects include audits and evaluations of the Center for Medicare and Medicaid Services (“CMS”) and provider claims. The 2010 Plan generally addresses areas the OIG believes are prone to abuse or other error. Providers can review the 2010 Plan to develop compliance activities for the upcoming year.

We have reviewed the 2010 Plan to highlight particular areas of interest for providers. The 2010 Plan contains many familiar and continuing areas of focus, but also contains a number of new projects. Much of the new focus centers on programs created in the American Recovery and Reinvestment Act of 2009 (“ARRA”), including audits of incentive payments made for the adoption of electronic health records (“EHRs”). The 2010 Plan also expands the OIG’s focus on quality of care. The 2010 Plan includes audits of payments for hospital-acquired conditions and hospital readmissions. This summary highlights just a fraction of the activities set forth in the 2010 Plan, and providers are encouraged to review the entire Fiscal Year 2010 OIG Work Plan.

Hospital Services

  • Provider-Based Status. The OIG will continue to review the cost reports of hospitals asserting provider-based status for inpatient and outpatient facilities to determine the appropriateness of the designation. The OIG will also assess the effects on Medicare from non-eligible facilities claiming provider-based status.
  • Payments for Non-Physician Outpatient Services Under the Inpatient Prospective Payment System (the “IPPS”). The OIG will review Medicare payments for non-physician outpatient services provided shortly before or during a hospital stay for compliance with federal law that prohibits separate payment for certain services.
  • Critical Access Hospitals (“CAHs”). The OIG will continue to review payments to CAHs for compliance with Medicare requirements and to determine whether CAHs have met the designation criteria and Medicare Conditions of Participation for CAHs. 
  • Medicare Disproportionate Share Payments. The OIG will continue to review Medicare disproportionate share hospital (“DSH”) payments made to hospitals for compliance with Medicare methodology. The OIG will also review the amounts of uncompensated care costs incurred by hospitals.
  • Medicare Bad Debts. The OIG will continue to review the appropriateness of Medicate bad debt claims by acute care inpatient hospitals, long term care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, and skilled nursing facilities. The OIG will also review whether the prior year write offs were used to reduce the cost of beneficiary services.
  • Reliability of Quality Data. The OIG will review controls in place for ensuring the accuracy of quality measurement data required for non-reduced Medicare reimbursement.
  • Hospital Admissions With Conditions Coded Present-on-Admission (“POA”). The OIG will identify the diagnoses that are coded most frequently as POA to a hospital stay. The OIG also will identify the types of facilities and specific providers that have the most frequent transfers of patients with a POA.
  • Hospital Readmissions. The OIG will identify trends in the number of hospital readmissions and assess the effectiveness of an edit that rejects claims for same-day readmissions to a hospital.
  • Adverse Events. The OIG will continue its review of adverse events. The review will include estimating the incidence and type of adverse events in hospital settings, assessing whether “never events” and other adverse events were preventable, and examining CMS’s methods to identify adverse events. The OIG will also examine CMS’s process for denying higher reimbursement for care related to a hospital-acquired condition, and review the practices of CMS and patient safety organizations for publicly disclosing adverse events while protecting patient privacy.
  • Compliance With the Emergency Medical Treatment and Active Labor Act (“EMTALA”). The OIG will review CMS’s oversight of hospital compliance with EMTALA by assessing the variation in the number of complaints among regions, CMS’s methods for tracking complaints and cases, and CMS’s use of required peer reviews prior to making any decision on whether to terminate a noncompliant provider.
  • Observation Services During Outpatient Visits. The OIG will review payments for hospital outpatient observation services to assess the effect such services have on the care Medicare beneficiaries receive and the beneficiaries’ ability to pay out-of-pocket expense for health care.
  • Coding and Documentation Changes Under the MS-DRG System. The OIG will review the impact of the October 1, 2007 implementation of the MS-DRG system, examine coding trends and patterns under the system, and identify whether particular MS-DRGs are prone to upcoding.

Other Provider Payments

  • Trends in Medicare Hospice Utilization. In addition to its ongoing review of physician billing for hospice beneficiaries, the OIG will review Medicare Part A hospice claims to identify hospital utilization trends, including the characteristics of hospice beneficiaries, geographical variation in utilization, and differences between for-profit and not-for-profit hospice providers.
  • Medicare Incentive Payments for E-Prescribing. The OIG will assess the extent to which erroneous Medicare incentives payments were made for e-prescribing by eligible health care professionals. The OIG will also assess CMS’s actions to remedy erroneous incentive payments.
  • Payments for Part B Imaging. The OIG will assess whether Medicare payments for Part B imaging services reflect the actual expenses for physicians providing the services.
  • Outpatient Physical Therapy Services Provided by Independent Therapists. The OIG will review outpatient therapy services provided by independent therapists to assess compliance with Medicare regulations. The OIG will focus on independent therapists with a high utilization rate for outpatient physical therapy services.
  • Appropriateness of Payments for Polysomnography. The OIG will examine the Medicare payments for sleep studies and the factors contributing to the rise in Medicare payments for sleep studies.
  • Use of Modifier GY. The OIG will review the appropriateness of providers’ use of modifier GY (statutorily excluded or non-covered service).
  • Enrollment Standards for Independent Diagnostic Testing Facilities (“IDTFs”). The OIG will review Medicare-enrolled IDTFs to assess compliance with Medicare’s enrollment standards.
  • Compliance with Medicare Assignment Rules. In addition to its ongoing review of physician reassignment of benefits, the OIG will assess provider compliance with Medicare assignment rules. The review will include the extent to which beneficiaries are billed an amount greater than permitted by Medicare law. The OIG will also assess whether beneficiaries are aware of their rights and responsibilities relating to billing violations.
  • Payments for Services Ordered or Referred by Excluded Providers. The OIG will assess the extent of Medicare payments for services ordered or referred by excluded providers. The OIG will also assess CMS’s methods for identifying and preventing payment for such services.

Durable Medical Equipment (“DME”)

  • Physician Self-Referral for DME. The OIG will review Medicare payments for DME services to assess whether the payments were permitted under federal physician self-referral law.
  • DME Categorization. The OIG will review DME supplier records and information from beneficiaries to assess whether certain DME items are appropriately categorized in the Medicare fee schedule (e.g., inexpensive or other routinely purchased DME, capped rental items, etc.).
  • DME Supplier Influence on Physician Prescribing. The OIG will assess whether DME suppliers that are participating in the competitive bidding program are soliciting physicians to prescribe more profitable DME brands or modes of delivery.


  • State Medicaid Agency Policies to Deny Payment for Hospital-Acquired Conditions. The OIG will review the policies of State Medicaid programs pertaining to adverse events, including the characteristics of the policies and their effect on the Medicaid program and its beneficiaries.
  • Payments to Terminated or Excluded Providers and Suppliers. The OIG will review the extent of Medicaid payments to providers and suppliers that are terminated or excluded from Medicaid.
  • Claims with Inactive or Invalid Physician Identifier Numbers. The OIG will review Medicaid claims to assess State agency controls for identifying claims with inactive or invalid UPINs.
  • Medicaid Physical and Occupational Therapy Services. Based on studies that identified Medicare program integrity issues relating to physical and occupational therapy, the OIG will review Medicaid payments for physical and occupational therapy services for compliance with federal requirements (e.g., medical necessity), to identify similar issues in the Medicaid program.

von Briesen & Roper Legal Update is a periodic publication of von Briesen & Roper, s.c. It is intended for general information purposes for the community and highlights recent changes and developments in the legal area. This publication does not constitute legal advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.