Kusserow on Compliance: OIG adds six new projects in December to its Work Plan

In 2017, the HHS OIG moved to regularly update updating its Work Plan. In December, the OIG added six new projects that set forth various audits and evaluations that are underway or planned in the current fiscal year and beyond. In conducting its work, the OIG assesses relative risks in HHS programs and operations to identify those areas most in need of attention. In evaluating potential projects to undertake, the OIG considers a number of factors, including mandates set forth in laws, regulations, or other directives; requests by Congress, HHS management, or the Office of Management and Budget; top management and performance challenges facing HHS; work performed by other oversight organizations (e.g., GAO); management’s actions to implement OIG recommendations from previous reviews; and potential for positive impact. In addition to working on projects that often result in audits, reviews, and reports, the OIG also engages in a number of legal and investigative activities that are separately reported.

New Projects Added

  1. Status Update on States’ Efforts on Medicaid-Provider Enrollment. Provider enrollment is the gateway to billing in the Medicaid program. If this gateway is not guarded, Medicaid is at risk of fraud, waste, and abuse. Prior OIG work found many states had yet to complete fingerprint-based criminal background checks and site visits. CMS agreed with this and moved ahead to assist, however, CMS continues to extend the deadline for completion of fingerprint-based criminal background checks, indicating that states are still working on provider enrollment. The OIG plans to determine the extent to which states have completed fingerprint-based criminal background checks and site visits. For those not completing these steps, the OIG will inquire about challenges preventing them from completing this effort.


  1. Review of CMS Systems Used to Pay Medicare Advantage Organizations. CMS has designed its Medicare Part C systems to capture the necessary data in order to make increased hierarchical condition categories (HCC) payments to MA organizations. CMS is transitioning to a new data system to make these payments. The OIG will review the continuity of data maintained on current Medicare Part C systems, specifically instances in which CMS made an increased payment to an MA organization for a HCC and determine whether CMS’s systems properly contained a requisite diagnosis code that mapped to that HCC.


  1. State Compliance With Requirements for Reporting and Monitoring Critical Incidents. CMS requires states to implement an incident reporting system to protect the health and welfare of the Medicaid beneficiaries who receive services in community-based settings or nursing facilities. OIG previously found that some states did not always comply with federal and state requirements for reporting and monitoring critical incidents such as abuse and neglect. The OIG will review additional state Medicaid agencies to determine whether the selected states are in compliance with the requirements for reporting and monitoring critical incidents. The work will focus on beneficiaries residing in both community-based settings and nursing facilities.


  1. Paper Check Medicaid Payments Made to Mailbox-Rental Store Addresses. The CMS Medicaid Manual sets forth general federal requirements for adequate documentation of Medicaid claims. Potential providers are required to submit an application to bill for Medicaid services, and potential providers can choose to be paid by an electronic funds transfer (EFT) or a paper check. They must also list their practice and correspondence addresses. Because of theft, forgery, or alteration, the issuance of paper checks to providers carries more risk than using an EFT. The GAO reported identifying potential issues with Medicare-provider addresses and revealed that payments made to a provider with a mailbox-rental store, vacant, or invalid practice address increase the potential risk of fraud, waste, or abuse. The OIG will assess whether similar problems exist with the Medicaid program. Specifically, the OIG will determine if Medicaid payments issued by paper checks and sent to providers with mailbox-rental locations were for unallowable services.


  1. Prescription Opioid Drug Abuse and Misuse Prevention – Prescription Drug Monitoring Programs. Opioid abuse and related overdoses is a national epidemic and according to the Centers for Disease Control and Prevention (CDC), more than 33,000 people died in 2015 from overdoses involving opioids. HHS, through the CDC and the Substance Abuse and Mental Health Services Administration (SAMHSA), provides funding to States to prevent opioid abuse and misuse. Funding is provided by the CDC’s Prescription Drug Overdose: Prevention for States program and SAMHSA’s Strategic Prevention Framework for Prescription Drugs program. The OIG intends to identify actions state agencies have taken using federal funds for enhancing prescription drug monitoring programs (PDMPs) to achieve program goals—improving safe prescribing practices and preventing prescription drug abuse and misuse—and in doing so determine whether they complied with federal requirements. This series of audits will include states that have had a high number of overdose deaths, have a significant increase in the rate of drug overdose deaths, or received HHS funding to enhance their PDMPs.


  1. Impact of the Indian Health Service (IHS) Delivery of Information Technology/Information Security Services and Opioid Prescribing Practices. IHS has a decentralized management structure that is separated into two major categories: Headquarters and 12 Area Offices. The Area Offices are responsible for overseeing 26 hospitals, 59 health centers, and 32 health stations, some of which are located in remote locations. The OIG found that hospitals with limited cybersecurity resources struggle to implement information technology improvements and update the IHS electronic heath record system. The OIG will analyze and compare information technology/information security (IT/IS) operations and opioid prescribing practices at five IHS hospitals to determine whether (1) IHS’s decentralized management structure has affected its ability to deliver adequate IT/IS services in accordance with federal requirements and (2) hospitals prescribed and dispensed opioids in accordance with IHS policies and procedures.


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG 2017 Work Plan projects relating to hospitals

The OIG released the 2017 Work Plan that summarizes new and ongoing reviews and activities they plans to pursue.  They removed items that were completed, postponed, or canceled, as well as those “Revised” items.  The major focus of the OIG is on the programs of CMS, which include Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).  These programs account for more than 80 percent of HHS’s budget with total Federal program spending of $986 billion for FY 2016.  Medicare alone accounted for approximately $595 billion, which includes inpatient hospital, skilled nursing, home health, hospice, and physician services payments, as well as incentive payments for adopting health information technology, such as electronic health records (EHRs). CMS uses Medicare Administrative Contractors to administer Medicare Part A and Medicare Part B and to process claims for both parts for more than 37 million people and approximately $371 billion in payments. In addition, Medicare expended over $85 billion in Part D benefit payments in CY 2015, serving over 41 million beneficiaries. The following projects are those related to hospital.

  1. Hyperbaric oxygen (HBO) therapy. Determine whether Medicare payments related to HBO outpatient claims were reimbursed in accordance with Federal requirements.
  2. Incorrect Medical Assistance Days Claimed by Hospitals. Determine whether Medicare administrative contractors properly settled Medicare cost reports for Medicare disproportionate share hospital payments in accordance with Federal requirements.
  3. Inpatient Psychiatric Facilities. Determine whether such facilities complied with Medicare documentation, coverage, and coding requirements for stays that resulted in outlier payments.
  4. Inpatient rehabilitation (rehab) hospitals. Assess a sample of rehabilitation hospital admissions to determine whether the patients participated in and benefited from intensive therapy; and identify reasons patients were not able to participate and benefit from therapy.
  5. Intensity-modulated radiation therapy (IMRT). Determine whether the payments were made in accordance with Federal requirements.
  6. Outpatient Outlier Payments for Short-Stay Claims. Determine the extent of potential Medicare savings if hospital outpatient stays were ineligible for an outlier payment.
  7. Comparison of Provider-Based and Freestanding Clinics. Determine the difference in payments made to the clinics for similar procedures; and assess the potential impact on Medicare and beneficiaries of hospitals’ claiming provider-based status for such facilities.
  8. Reconciliations of Outlier Payments. Determine whether CMS performed necessary reconciliations in a timely manner to enable Medicare contractors to perform final settlement of the hospitals’ associated cost reports, as well as whether the Medicare contractors referred all hospitals that meet the criteria for outlier reconciliations to CMS.
  9. Hospitals’ Use of Outpatient and Inpatient Stays Under Medicare’s Two-Midnight Rule. Determine how hospitals’ use of outpatient and inpatient stays changed under Medicare’s two-midnight rule by comparing claims for hospital stays in the year prior to and the year following the effective date of that rule; and the extent to which the use of outpatient and inpatient stays varied among hospitals.
  10. Medicare Costs Associated with Defective Medical Devices. Identify the costs to Medicare resulting from additional use of medical services associated with defective or recalled medical devices.
  11. Payment Credits for Replaced Medical Devices That Were Implanted. Determine whether Medicare payments for replaced medical devices were made in accordance with Medicare requirements.
  12. Medicare Payments for Overlapping Part A Inpatient Claims and Part B Outpatient Claims. Determine whether outpatient claims billed to Medicare Part B for services provided during inpatient stays were made in accordance with Federal requirements.
  13. Selected Inpatient and Outpatient Billing Requirements. Determine hospitals’ compliance with selected billing requirements and recommend recovery of overpayments. Focus will be on those hospitals with claims that may be at risk for overpayments.
  14. Duplicate Graduate Medical Education Payments. Assess the effectiveness of preventing duplicate payments for DGME costs; and any appropriate payments.
  15. Indirect Medical Education Payments. Determine whether the IME payments were calculated properly.
  16. Outpatient Dental Claims. Roll up the results of our audits of Medicare hospital outpatient payments for dental services to provide CMS with cumulative results and make recommendations for any appropriate changes to the program.
  17. Nationwide Review of Cardiac Catheterizations and Endomyocardial Biopsies. Review Medicare payments to hospitals nationwide for outpatient RHCs and endomyocardial biopsies performed during the same patient encounter.
  18. Payments for Patients Diagnosed with Kwashiorkor. Roll up the results of our audits of Medicare hospital payments for kwashiorkor to provide CMS with cumulative results and make recommendations for any appropriate changes to the program.
  19. Review of Hospital Wage Data Used to Calculate Medicare Payments. Review hospital controls over the reporting of wage data used to calculate wage indexes for Medicare payments.
  20. CMS Validation of Hospital-Submitted Quality Reporting Data. Determine the extent to which CMS-validated hospital inpatient quality reporting data are accurate and complete.
  21. Long-Term-Care Hospitals Adverse Events in Postacute Care for Medicare Beneficiaries. Identify factors contributing to these events and determine the extent to which the events were preventable.
  22. Hospital Preparedness and Response to Emerging Infectious Diseases. Describe hospitals’ efforts to prepare for the possibility of public health emergencies resulting from emerging infectious disease threats; review use of HHS resources; and identify lessons and challenges faced by hospitals as they prepare to respond to emerging infectious disease threats.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2016 Strategic Management Services, LLC. Published with permission.