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OIG to Investigate Hospital Payments in 2013

 |  By cclark@healthleadersmedia.com  
   October 08, 2012

Federal health investigators say they are launching 112 new investigations as part of their 2013 work plan, 8 of which deal with programs authorized under the Patient Protection and Affordable Care Act.

The 148-page Office of Inspector General Work Plan 2013, issued annually by the Office of Inspector General for the U.S. Department of Health & Human Services, highlights 25 projects that examine the Centers for Medicare & Medicaid Services payment policies to hospitals under Part A and Part B, 11 of which are new.

Also included in the work plan is a program to expand the review of Recovery Audit Contractors from only working with Medicare providers to state Medicaid programs as well.

Payments for hospital transfers

The extent to which hospitals have miscoded transfers to another hospital for patients needing further care, which should be paid at a lower rate, will be examined.

A similar new project involves examining the appropriateness of payments to hospitals that transfer patients to a different hospital, which then places that patient in a "swing" bed, which can be used interchangeably for acute care or skilled nursing services.

Yet another project involves a re-evaluation of Medicare's current practice of paying hospitals a full Medicare DRG rate for patients with short lengths of stay who are transferred to a hospice. "Analysis of Medicare claims data demonstrates significant occurrences of a discharge from an acute care hospital after a short stay that is immediately followed by hospice care...If appropriate, we will recommend that CMS (the Centers for Medicare & Medicaid Services) evaluate its polity related to payment for hospital discharges to hospice facilities."

DRG payment effect

The extent to which hospital billing for inpatient stays changed from FY 2008 to FY 2012 under new Medicare diagnostic related group payment rates that took effect in 2008, and how inpatient billing "varied among different types of hospitals and how hospitals ensure compliance with Medicare requirements."

Under Medicare's bundled payment formula, payments for care include costs incurred three days prior to admission. This project will examine whether Medicare could save significant amounts of money if it expanded that window to 14 days prior to inpatient admission.

"Prior OIG work identified improper payments in the DRG window," the work plan says. "OIG work has also concluded that CMS could realize significant savings if the DRG window was expanded from 3 days to 14 days."

Pay for cancelled surgeries

The OIG has evidence of "significant occurrences" of payment to hospitals for patients who were admitted for a scheduled surgical procedure, which was subsequently cancelled.

Sometimes the surgery was rescheduled at the same hospital several days later, but sometimes not.  "For these short-stay claims, few if any inpatient services (i.e. laboratory or diagnostic tests) were provided by the hospitals because the surgical procedure was canceled...Current Medicare policy does not preclude payment for these claims."

Payment for mechanical ventilation

This project will select Medicare payments to review whether hospitals provided the minimum 96 hours of mechanical ventilation, required for certain DRG payments to qualify.

Quality improvement organizations

The OIG will assess barriers that these CMS-contracted organizations experience when they work with hospitals on quality projects or when they provide technical assistance. "Medicare spends $1.1 billion for each three-year QIO contract period, and each contract calls for QIOs to provide technical assistance to providers and specifies clinical areas for the quality improvement projects."

Provider-based status

The office will examine the "impact" of a practice in which providers, non-hospital owned physician practices, which are not based at a hospital, submit claims to Medicare as if they were provider-based.

"We will also determine the extent to which practices using the provider-based status met CMS billing requirements."  A Medicare Payment Advisory Commission report in 2011" expressed concerns about the financial incentives presented by provider-based status and stated that Medicare should seek to pay similar amounts for similar services."

Acquisition of ambulatory surgical centers

The office also will look into a practice by which hospitals are acquiring ambulatory surgical centers and converting them to hospital outpatient departments, and the impact that has on Medicare payments and beneficiary cost sharing.

"Medicare reimburses outpatient surgical services performed in hospital outpatient departments at a higher rate than similar services performed in ASCs," the work plan says.  "Hospitals may be acquiring ASCs and providing outpatient surgical services in that setting."

Payment to critical access hospitals for swing beds

Investigators will examine whether current policy, which allows critical access hospitals to bill Medicare at 101% of reasonable cost for patient care provided in swing beds (beds that can be used for either acute or skilled nursing care), should be adjusted to "a more cost-effective payment methodology" when patients are provided traditional skilled nursing care. 

Currently, there is no established length-of-stay limit for swing bed utilization in critical access hospitals.

Long-term care hospital interrupted-stay payment

Prior investigations by the OIG "has identified vulnerabilities in CMS's ability to detect readmissions and appropriately pay for interrupted stays" in long-term care facilities, which require a Medicare payment adjustment.

"An interrupted stay occurs when a patient is discharged from an LTCH for treatment and services that are not available at the LTCH and is readmitted after a specific number of days."

Recovery Audit Contractors

Because previous OIG and Government Accountability Office reports found problems with Recovery Audit Contractors' (RACs') ability to identify and report potential fraud, "and with CMS's handling of vulnerabilities identified by RACs," a new program will look at RACs performance and results under the Medicaid program.

State Medicaid programs were required to establish such programs by the end of 201.

"The RACs were initially established to conduct postpayment reviews to identify Medicare overpayments and underpayments," the work plan said.  "The Affordable Care Act expanded the use of RACs to Medicaid."

Affordable Care Act

In addition to the office's many other projects, 29 deal with implementation of the 2010 healthcare reform laws, including eight labeled as new projects for 2013.

They include

• A review of federal grants to states to establish insurance exchanges with an eye to assure that the exchanges prevent fraud, waste, and abuse.

• Two reviews will look into the creation of Consumer Operated and Oriented Plans, or CO-OPs. One involves an investigation of the process CMS uses to select recipients of $3.4 billion in new funding for CO-OPs. These funds go to organizations vying to be qualified nonprofit health insurance issuers, and help get loans to pay their startup costs and meet state solvency requirements.

• The OIG will look at whether home health agencies are complying with a requirement that physicians who certify Medicare beneficiaries as eligible for home health services actually have face-to face encounters with them.

• The OIG will examine whether Medicare payments for power mobility devices, such as wheelchairs, meet requirements and "whether savings can be achieved by Medicare for rentals rather than lump-sum purchase for certain" devices.

• The office will determine how frequently Medicare officials should make onsite visits to providers and suppliers identified by CMS as moderate or high risk for fraud.

• The office will review the extent to which state Health Insurance Assistance Programs (SHIPs) provide Medicare with fraud information. Special funding for fraud detection was provided to SHIPs for this purpose.

• Officials will review state Medicaid agencies' processes for enrolling and monitoring medical equipment suppliers. "In a recent OIG report on Medicaid suppliers, more than 15% of the suppliers failed to meet at least one enrollment standard."

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