OIG: Trends, Reports and Issues: FY2019

© 1996-2019 Abbey & Abbey, Consultants, Inc. Slide # 1
OIG Update and
New Issues for 2019
Version 18.5 – 2019
Notes © 1996-2019, Abbey & Abbey, Consultants, Inc.
CPT®
Codes – © 2018-2019 AMA
Sponsored By:
Beaverton Regional Hospital
Beaverton, Oregon
Presented By:
Duane C. Abbey, Ph.D., CFP
Abbey & Abbey, Consultants, Inc.
Duane@aaciweb.com http://www.aaciweb.com
http://www.APCNow.com http://www.HIPAAMaster.com

This workshop and other material provided are designed to provide accurate and
authoritative information. The authors, presenters and sponsors have made every
reasonable effort to ensure the accuracy of the information provided in this
workshop material. However, all appropriate sources should be verified for the
correct ICD-9-CM Codes, ICD-10-CM Diagnosis Codes, ICD-10-PCS Procedure
Codes, CPT/HCPCS Codes and Revenue Center Codes. The user is ultimately
responsible for correct coding and billing.
The author and presenters are not liable and make no guarantee or warranty;
either expressed or implied, that the information compiled or presented is error-
free. All users need to verify information with the Fiscal Intermediary, Carriers,
other third party payers, and the various directives and memorandums issued by
CMS, DOJ, OIG and associated state and federal governmental agencies. The
user assumes all risk and liability with the use and/or misuse of this information.
Disclaimer

Presentation Faculty
Duane C. Abbey, Ph.D., CFP – Dr. Abbey is a healthcare consultant and educator with over 20
years of experience. He has worked with hospitals, clinics,
physicians in various specialties, home health agencies and other health care providers.
His primary work is with optimizing reimbursement under various Prospective Payment
Systems. He also works extensively with various compliance issues and performs
chargemaster reviews along with coding and billing audits.
Dr. Abbey is the President of Abbey & Abbey, Consultants, Inc. A wide range of consulting
services is provided across the country including charge master reviews, APC compliance
reviews, in-service training, physician training, and coding and billing reviews.
Dr. Abbey is the author of fourteen books on health care, including:
•“Non-Physician Providers: Guide to Coding, Billing, and Reimbursement”
•“Emergency Department: Coding, Billing and Reimbursement”, and
•“Chargemasters: Strategies to Ensure Accurate Reimbursement and Compliance”.
Recent books include: “Compliance for Coding, Billing & Reimbursement A Systematic
Approach to Developing a Comprehensive Program”, “Introduction to Healthcare Payment
Systems”, “Fee Schedule Payment Systems” and “Prospective Payment Systems” from
Taylor and Francis. He has just finished the fourth book in the Healthcare Payment System
Series; “Cost-Based, Charge-Based and Contractual Payment Systems”.

OIG Issues - 2019
Introduction
 Healthcare Compliance – A Very Broad Spectrum!
 CERT/OIG/CMS/DOJ/RAC Investigations, Audits, Techniques
 Corporate Integrity Agreements (CIAs)
 Hospital Compliance Areas
• Conditions of Participations (CoPs)
• Conditions for Payment (CfPs)
• Physician Relations
• Organizational Structuring  Provider-Based Rule (PBR)
 Physician and Clinic Compliance Areas
• Coding and Billing
• Medical Necessity
 Other Providers  HHA, Hospice, SNF, Ambulance, MAs, Drugs, DME
 Specialized and/or Cross Cutting Areas
• EMTALA – Emergency Medical Treatment and Labor Act
• Telemedicine/Telehealth
• Integrated Delivery Systems  Multiple Areas!
• EHRs  Quality Initiatives

 Specialized Areas Continued
 Observation Services  See Over 2-Midnight Rule
 Durable Medical Equipment (DME)
 HIPAA – Privacy, TSC, Security, NPIs
 OIG Compliance Guidance
 Federal Register Entries
 Compliance Alerts – OIG Special Reports
 Advisory Opinions
 OIG Work Plans  Look At Five Years
 Legislative Changes – Social Security Act
 Medicare Modernization Act of 2003
 Deficit Reduction Act of 2005
 Tax Relief and Health Care Act of 2006
 Affordable Care Act of 2010
 MACRA 2015 + BiBA 2015 + 21st
Century Cures Act + BiBA 2018
 Hospital Compliance Infrastructure
 Personnel
 Project Prioritization versus Resource Availability
 OIG Work Plans  Keep Getting Longer and More Complex Each Year
 RACs Can Use OIG Identified Issues
OIG Issues - 2019
Introduction

 To Understand The OIG Work Plan Process
 To Appreciate the Importance of the Various Reports Issued by the OIG
 To Review Issues for FY2019
 To Review Any Recent Reports Involving Fraud and Abuse
 To Understand the RAC Development and Approval of Issues
 To Identify OIG Trends For Issues and Their Relationship to RAC Issue
Development
 To Identify Compliance Issues That Need To Be Addressed By Physicians,
Hospitals, Facilities and Other Health Care Providers
 To Identify And Review Various Reports Issued By The OIG Relative To
Audits And Studies Performed As A Part Of The OIG’s Work Plans
 To Assess Which Issues Will Develop and Eventually Be Investigated by
the RACs and Other Federal Auditors
 To Look for Trends Relative to the OIG Work Plan Issues
 Action Steps That Should Be Taken By Hospitals and Other Healthcare
Providers
• Note: This is a complex area that continues to change over time.
Look for trends and prepare for the future!
• We will look at a sampling of OIG issues for 2018 through 2014.
Some are new and some have carried over from previous years.
OIG Issues - 2019
Objectives

OIG Issues - 2019
Associated Activities and Reports
 GAO Assessments
 Congressional Offices
 Predictive Analytic Efforts
 Pre-Payment Audits
 Continuing Pronouncements and Interpretations From CSM
 Example: Over 2-Midnight Rule
 Reports from Various OIG Studies
 Example: Questionable Billing For Polysomnography Services –
October 2013
 Example: Improper Payments For Evaluation And Management
Services Cost Medicare Billions In 2010 – May 2014
• This is a particularly important report. Improper E/M level coding
(both up and down) is in the 50% range.
 Compendium of Unimplemented Recommendations
 OIG Med-Year Work Plan
 OIG Work Plan – Discrete Process Becoming Continuous
 Main Work Plan Issued On or About October 1st
Of Each Year
 Now more of a continuous process with issues listed throughout the
year. There is still an emphasis on October 1st
– Beginning of the FY.

 OIG FY2018 Work Plan
 The OIG continues to expand and shift emphasis in some cases.
 The scope and number of issues is expanding.
 Many of our old favorites continue to appear, sometimes in modified
form.
 There are also many new or revived issues.
• Questionable Billing Patterns/Characteristics
 Home Health
 Nursing Homes
 Ambulances
• Outlier Payments  Different Payment Systems
• Nursing Home Compliance Plan
• Provider-Based Status  See H.R. 1314 Budget Section 603
• DME Issues and Related Costs
• Long-Term Care Hospitals
• QIOs  Anticipate Over 2-Midnight Audits to be Reviewed by OIG
• MACs
 Look for multi-year issues in slightly revised form.
 There are a number of sub-trends within the issues identified for study
by the OIG.
 What is not there? 855s, NPPs, MSP, ???
OIG Issues - 2019
FFY2018 Update

OIG Issues - 2019
Selected Reports
 Selected Reports – Completed Studies Conducted by OIG
 CMS Paid Practitioners for Telehealth Services That Did Not Meet
Medicare Requirements (A- 05-16-00058) – Issued April 2018
 Most Medicare Claims for Replacement Positive Airway Pressure
Device Supplies Did Not Comply with Medicare Requirements ( A-04-17-
04056) - Issued June 2018
 CMS Did Not Detect Some Inappropriate Claims for Durable Medical
Equipment in Nursing Facilities(OEI-06-16-00380) - Issued June 2018
 Medicare Improperly Paid Providers for Nonemergency Ambulance
Transports to Destinations Not Covered by Medicare (A- 09-17-03018) -
Issued July 2018
 Medicare Improperly Paid Providers for Items and Services Ordered by
Chiropractors (A- 09-17-03002) - Issued July 2018
 Medicare Made Improper and Potentially Improper Payments for
Emergency Ambulance Transports to Destinations Other Than
Hospitals or Skilled Nursing Facilities (A- 09-17-03017) - Issued August
2018
 Medicare Improperly Paid Hospitals Millions of Dollars for Intensity-
Modulated Radiation Therapy Planning Services (A- 09-16-02033) -
Issued August 2018

OIG Issues - 2019
Selected Reports
 CMS Is Taking Steps To Improve Oversight of Provider-Based Facilities,
but Vulnerabilities Remain (OEI-04-12-00380) – Issued June 2016
 Nationwide Analysis of Common Characteristics in OIG Home Health
Fraud Cases (OEI-05-16-00031) – Issued June 2016
 Medicare: Vulnerabilities Related to Provider Enrollment and
Ownership Disclosure (OEI-04-11-00591) – Issued May 2016
 Medicare Benefit Integrity Contractors' Activities in 2012 and 2013: A
Data Compendium (OEI-03-13-00620) – Issued May 2016
 Hospices Should Improve Their Election Statements and Certifications
of Terminal Illness (OEI 02-10-00492) – Issued September 2016
 Medicare Improperly Paid Millions of Dollars for Unlawfully Present
Beneficiaries for 2013 and 2014 – Mandatory Report (A-07-15-01159) –
Issued September 2016
 Medicaid Incentive Payments for Adopting Electronic Health Records
(multiple reports) – Issued August–October 2016
 Hospital Electronic Health Record Contingency Plans (OEI-01-14-00570)
– Issued July 2016

OIG Issues - 2019
Selected Reports
 Wisconsin Physicians Service Paid Providers for Hyperbaric Oxygen
Therapy Services That Did Not Comply With Medicare Requirements
(February 2018 A-01-15-00515)
 New Jersey Claimed Hundreds of Millions in Unallowable or
Unsupported Medicaid School-Based Reimbursement (November 2017
A-02-15-01010)
 Medicare Compliance Review of Rush University Medical Center
(November 20917 A-05-16-00062)
 Medicare Inappropriately Paid Acute-Care Hospitals for Outpatient
Services They Provided to Beneficiaries Who Were Inpatients of Other
Facilities (September A-09-16-02026)
 Vulnerabilities Remain in Medicare Hospital Outlier Payments
(September 2017 A-07-14-02800)
 CMS Paid Practitioners For Telehealth Services That Did Not Meet
Medicare Requirements (April 2018 A-05-16-00058)
 Many Medicare Claims For Outpatient Physical Therapy Services Did
Not Comply With Medicare Requirements (March 2018 A-05-14-00041)

OIG Issues - 2019
Acronyms
 ACA – Affordable Care Act
 ACO – Accountable Care Organization
 CMS – Centers for Medicare & Medicaid Services
 CY – FY – Calendar Year & Fiscal Year (Technically, FFY)
 DOJ – Department of Justice
 EHR – Electronic Health Record
 GAO – General Accountability Office
 MA – Medicare Advantage (See Part C)
 MACRA – Medicare Access and CHIP Reauthorization Act – 2015
 OMB – Office of Management and Budget
 SSA – Social Security Act – See Also Social Security Administration
 Note: In Federal Registers see the term ‘Act’.

OIG Issues - 2019
Medicare Identifier Cards
 CMS Medicare Beneficiary Identifier Card
 The Medicare Access and CHIP Reauthorization Act of 2015 requires
CMS to remove Social Security Numbers from Medicare cards and, as a
result, CMS is replacing the existing health insurance claim number
with a Medicare Beneficiary Identifier (MBI). We will conduct a series of
reviews to assess controls in place to distribute and implement usage
of the MBI. We will (1) determine the number and nature of Medicare
cards returned as undeliverable and the extent to which CMS tracks
and follows up on Medicare cards returned as undeliverable, (2) assess
CMS's safeguards in place to protect the MBI, and (3) conduct a review
of payments to providers to determine whether Medicare cards deemed
high risk and cards mailed and returned as undeliverable are being
used for inappropriate items and services. (2018)

OIG Issues - 2019
Podiatry
 Medicare Part B Payments for Podiatry and Ancillary Services
 Medicare Part B covers podiatry services for medically necessary
treatment of foot injuries, diseases, or other medical conditions
affecting the foot, ankle, or lower leg. Part B generally does not cover
routine foot-care services such as the cutting or removal of corns and
calluses or trimming, cutting, clipping, or debridement (i.e., reduction
of both nail thickness and length) of toenails. Part B may cover these
services, however, if they are performed (1) as a necessary and integral
part of otherwise covered services, (2) for the treatment of warts on the
foot, (3) in the presence of a systemic condition or conditions, or (4) for
the treatment of infected toenails. Medicare generally does not cover
evaluation and management (E&M) services when they are provided on
the same day as another podiatry service (e.g., nail debridement
performed as a covered service). However, an E&M service may be
covered if it is a significant separately identifiable service. In addition,
podiatrists may order, refer, or prescribe medically necessary ancillary
services such as x-rays, laboratory tests, physical therapy, durable
medical equipment, or prescription drugs. Medicare requirements.
(2019)

OIG Issues - 2019
SNF
 Nursing Facility Staffing: Reported Levels and CMS Oversight
 Staffing levels in nursing facilities can impact residents' quality of care.
Nursing facilities that receive Medicaid and Medicare payments must
provide sufficient licensed nursing services 24 hours a day, including a
registered nurse for at least 8 consecutive hours every day. CMS uses
auditable daily staffing data, called the Payroll-Based Journal, to
analyze staffing patterns and populate the staffing component of the
Nursing Home Compare websiteâ€”a site that enables the public to
compare the results of health and safety inspections, the quality of care
provided at nursing facilities, and staffing at nursing facilities. The first
of two reports will be a data brief that describes nursing staffing levels
reported by facilities to the Payroll-Based Journal. The second report
will examine CMS's efforts to ensure data accuracy and improve
resident quality of care. (2019)

OIG Issues - 2019
SNF
 CMS Oversight of Nursing Facility Staffing Levels
 Staffing levels in nursing facilities can impact residents' quality of care.
Nursing facilities that receive Medicaid and Medicare payments must
provide sufficient licensed nursing services 24 hours a day, including a
registered nurse for at least 8 consecutive hours every day. CMS uses
auditable daily staffing data, called the Payroll-Based Journal, to
analyze staffing patterns and populate the staffing component of the
Nursing Home Compare website - a site that enables the public to
compare the results of health and safety inspections, the quality of care
provided at nursing facilities, and staffing at nursing facilities. We will
examine nursing staffing levels reported by facilities to the Payroll-
Based Journal and CMS's efforts to ensure data accuracy and improve
resident quality of care by both enforcing minimum requirements and
incentivizing high quality staffing above minimum requirements. (2018)

OIG Issues - 2019
DRG Transfer Policy
 Follow-up Review on Inpatient Claims Subject to the Post-Acute-Care
Transfer Policy
 Medicare makes the full Medicare Severity Diagnosis-Related Group
(MS-DRG) payment to a hospital that discharges an inpatient
beneficiary "to home." Under the post-acute-care transfer policy,
however, for certain qualifying MS-DRGs, Medicare pays a hospital that
transfers an inpatient beneficiary to post-acute care a per diem rate for
each day of the stay, not to exceed the full MS-DRG payment that would
have been made if the inpatient beneficiary had been discharged to
home. A prior OIG review identified Medicare overpayments to
hospitals that did not comply with Medicare's post-acute-care transfer
policy (42 CFR § 412.4(c)). We found that hospitals transferred patients
to certain post-acute-care settings but improperly claimed the higher
reimbursement associated with discharges "to home." Specifically,
these hospitals used incorrect patient discharge status codes on their
claims by indicating that their patients were discharged "to home"
rather than transferred to a post-acute-care setting (e.g., home health
services, skilled nursing facilities (SNFs), non-Inpatient Prospective
Payment System (IPPS) hospitals or hospital units). recommendations
and stated that it will update the CWF edits. (2019)

OIG Issues - 2019
DRG Transfer Policy
 Hospitals' Compliance with Medicare's Transfer Policy With the
Resumption of Home Health Services and the Use of Condition Codes
 Medicare payments to acute care hospitals for inpatient stays under
Medicare Part A are made on the basis of prospectively set rates.
Normally, Medicare pays a hospital discharging a beneficiary the full
amount for the corresponding diagnosis-related group (DRG). In
contrast, a hospital that transfers a beneficiary to another facility or to
home health services is paid a graduated per diem rate, not to exceed
the full DRG payment. When transferring a patient to home health
services, the hospital can apply specific condition codes to the claim
and receive the full DRG payment. The hospital is responsible for
coding the bill on the basis of its discharge plan for the patient or
adjusting the claim if it finds out that the patient received postacute
care after the discharge. We will determine whether Medicare
appropriately paid hospitals' inpatient claims subject to the postacute
care transfer policy when (1) patients resumed home health services
after discharge or (2) hospitals applied condition codes to claims to
receive a full DRG payment. (2018)

OIG Issues - 2019
Critical Care E/M Coding
 Physicians Billing for Critical Care Evaluation and Management Services
 Critical care is defined as the direct delivery of medical care by a
physician(s) for a critically ill or critically injured patient. Critical care is
usually given in a critical care area such as a coronary, respiratory, or
intensive care unit, or the emergency department. Payment may be
made for critical care services provided in any location as long as the
care provided meets the definition of critical care. Critical care is
exclusively a time-based code. Medicare pays physicians based on the
number of minutes they spend with critical care patients. The physician
must spend this time evaluating, providing care and managing the
patient's care and must be immediately available to the patient. This
review will determine whether Medicare payments for critical care are
appropriate and paid in accordance with Medicare requirements. (2018)

OIG Issues - 2019
Radiation Therapy Planning
 Review of Outpatient 3-Dimensional Conformal Radiation Therapy Planning
Services
 3-Dimensional Conformal Radiation Therapy (3D-CRT) is a radiation
therapy technique that allows doctors to sculpt radiation beams to the
shape of a patient's tumor. 3D-CRT is provided in two treatment
phases: planning and delivery. Hospitals bill Medicare for developing a
3D-CRT treatment plan using Current Procedural Terminology code
77295. Automated prepayment edits prevent additional payments for
separately billed radiation planning services if they are billed on the
same date of service as the 3D-CRT treatment plan. However, Medicare
allows additional payments if they are billed on a different date of
service (e.g., 1 day before). For a form of radiation similar to 3D-CRT,
Medicare requirements prohibit payments for separately billed radiation
planning services when they are billed on a different date of service.
We will determine the extent of potential savings to Medicare if it had
implemented the same requirements for 3D-CRT planning services.
(2018)

OIG Issues - 2019
Global Surgical Package
 Review of Post-Operative Services Provided in the Global Surgery Period
 Section 523 of Medicare Access and CHIP Reauthorization Act of 2015
(MACRA) requires CMS to collect data on post-operative services
included in global surgeries and requires OIG to audit and verify a
sample of the data collected. We will review a sample of global
surgeries to determine the number of post-operative services
documented in the medical records and compare it to the number of
post-operative services reported in the data collected by CMS. We will
verify the accuracy of the number of post-operative visits reported to
CMS by physicians and determine whether global surgery fees
reflected the actual number of post-operative services that physicians
provided to beneficiaries during the global surgery period. (2018)

OIG Issues - 2019
Part D - Drugs
 Denials and Appeals in Medicare Part D
 CMS uses a capitated payment model to pay private insurers that
provide and administer Medicare Part D benefits. Capitated payment
models are on a payment-per-person rather than a payment-per-service
basis, and they can create an incentive to deny access to services or
payment in order to increase an insurer's profits. Beneficiaries can
appeal denied prescriptions and payments to multiple levels of review
within the administrative appeals process. We will examine national
trends and CMS's oversight of prescription drug denials in Part D
during 2014-2016. We will determine the extent to which denials that
have been appealed to each level of review were overturned. We will
also examine variations in appeals and overturned denials across Part
D contracts and evaluate CMS's efforts to monitor and address
inappropriate denials in Part D. (2018)

OIG Issues - 2019
Part C – Medicare Advantage
 Denials and Appeals in Medicare Part C
 CMS uses a capitated payment model to pay private insurers that
provide health care services under Medicare Part C. Capitated payment
models are on a payment-per-person rather than a payment-per-service
basis, and they can create an incentive to deny access to services or
payment in order to increase an insurer's profits. We will examine
national trends and CMS's oversight of denied care and payment in
Part C during 2014-2016. Beneficiaries and providers can appeal denied
services and payments to multiple levels of review within the
administrative appeals process. We will determine the extent to which
denials that have been appealed to each level of review were
overturned. We will examine variations in appeals and overturned
denials across Part C contracts. We will also evaluate CMS's efforts to
monitor and address inappropriate denials in Part C. (2018)

OIG Issues - 2019
Hospice
 Medicare Payments Made Outside of the Hospice Benefit
 According to 42 CFR 418.24(d), in general, a hospice beneficiary waives
all rights to Medicare payments for any services that are related to the
treatment of the terminal condition for which hospice care was elected.
The hospice agency assumes responsibility for medical care related to
the beneficiary's terminal illness and related conditions. Medicare
continues to pay for covered medical services that are not related to
the terminal illness. Prior OIG reviews have identified separate
payments that should have been covered under the per diem payments
made to hospice organizations. We will produce summary data on all
Medicare payments made outside the hospice benefit, without
determining the appropriateness of such payments, for beneficiaries
who are under hospice care. In addition, we will conduct separate
reviews of selected individual categories of services (e.g., durable
medical equipment, prosthetics, orthotics and supplies, physician
services, outpatient) to determine whether payments made outside of
the hospice benefit complied with Federal requirements. (2018)

OIG Issues - 2019
Cardiac/Pulmonary Rehabilitation
 Medicare Part B Outpatient Cardiac and Pulmonary Rehabilitation Services
 Medicare Part B covers outpatient cardiac and pulmonary rehabilitation
services. For these services to be covered, however, they must be
medically necessary and comply with certain documentation
requirements. Previous OIG work identified outpatient cardiac and
pulmonary rehabilitation service claims that did not comply with
Federal requirements. We will assess whether Medicare payments for
outpatient cardiac and pulmonary rehabilitation services were
allowable in accordance with Medicare requirements. We will also
determine whether potential risks in outpatient cardiac and pulmonary
rehabilitation programs continue to exist. (2018)

OIG Issues - 2019
CMS Collection of OIG Identified Overpayments
 CMS Medicare Overpayment Recoveries Related to Recommendations in
OIG Audit Reports
 HHS is responsible for resolving Federal audit report recommendations
related to its activities, grantees, and contractors within 6 months after
formal receipt of the audit reports. From October 1, 2014, to December
31, 2016, OIG issued 153 audit reports that related to the Medicare
program and that contained 193 monetary recommendations totaling
$648 million. Of the $648 million in recommended overpayment
recoveries, CMS agreed to collect $566 million applicable to 190
recommendations. We will determine the extent to which CMS: (1)
collected agreed upon Medicare overpayments identified in OIG audit
reports and (2) took corrective action in response to the
recommendations in our prior audit report examining CMS'
overpayment recoveries (A-04-10-03059). In that report, we
recommended that CMS enhance its systems and procedures for
recording, collecting, and reporting overpayments. We also
recommended that CMS provide guidance to its contractors on how to
document that overpayments were actually collected. (2018)

OIG Issues - 2019
Orthotic Devices
 Questionable Billing for Off-the-Shelf Orthotic Devices
 Since 2014, claims for three off-the-shelf orthotic devices (L0648,
L0650, and L1833) have grown by 97 percent and allowed charges have
grown by 116 percent, reaching $349 million in 2016. The Social
Security Act states that no payment may be made under Medicare Part
B for any expenses incurred for items that "are not reasonable and
necessary for the diagnosis or treatment of illness or injury or to
improve the functioning of a malformed body member." A Medicare
Administrative Contractor (MAC) has identified improper payment rates
as high as 79 percent for L0648, 88 percent for L0650, and 91 percent
for L1833 within its jurisdiction. A top concern of the MAC is a lack of
documentation of medical necessity in patients' medical records. We
will examine factors associated with questionable billing for the three
orthotic devices, and describe the billing trends for these devices from
2014 - 2016. Specifically, we will evaluate the extent to which Medicare
beneficiaries are being supplied these orthotic devices without an
encounter with the referring physician within 12 months prior to their
orthotic claim and will analyze billing trends on a nation-wide scale.
(2018)

OIG Issues - 2019
Provider-Based Clinics/Operations
 Comparison of Provider-Based and Freestanding Clinics
 Provider-based facilities often receive higher payments for some
services than freestanding clinics. The requirements that a facility must
meet to be treated as provider-based are at 42 CFR § 413.65(d). We will
review and compare Medicare payments for physician office visits in
provider-based clinics and freestanding clinics to determine the
difference in payments made to the clinics for similar procedures. We
will also assess the potential impact on Medicare and beneficiaries of
hospitals' claiming provider-based status for such facilities. (2016-2017)
• Provider-Based Clinics is an ongoing issues that appears in
different forms. See BiBA 2015 Section 603 and 21st
Century Act.

OIG Issues - 2019
DRG Coding Issue
 Medicare Claims on Which Hospitals Billed for Severe Malnutrition
 Many elderly Medicare patients, especially those who are severely ill,
are malnourished. Malnutrition can result from such things as the
treatment of another condition, inadequate treatment or neglect, or the
general deterioration of a patient's health. Hospitals are allowed to bill
for the treatment of malnutrition on the basis of the severity of the
condition -- mild, moderate or severe, and whether it affects patient
care. This review would assess the accuracy of Medicare payments for
the treatment of severe malnutrition. Severe malnutrition is classified
as a major complication or comorbidity (MCC). Adding an MCC to a
Medicare claim can result in a higher Medicare payment because the
claim is coded at a higher Diagnosis Related Group. Our objective is to
determine whether providers are complying with Medicare billing
requirements when assigning diagnosis codes for the treatment of
severe types of malnutrition on inpatient hospital claims. (Revised
2017)
• This issue has been around for a number of years.

OIG Issues - 2019
DRG Coding Issue
 Payments for Patients Diagnosed with Malnutrition
 Kwashiorkor is a form of severe protein malnutrition that generally
affects children living in tropical and subtropical parts of the world
during periods of famine or insufficient food supply. It is typically not
found in the United States. A diagnosis of kwashiorkor on a claim
substantially increases the hospitals' reimbursement from Medicare.
Prior OIG reviews have identified inappropriate payments to hospitals
for claims with a kwashiorkor diagnosis. We will review Medicare
payments made to hospitals for claims that include a diagnosis of
kwashiorkor to determine whether the diagnosis is adequately
supported by documentation in the medical record. We will roll up the
results of our audits of Medicare hospital payments for kwashiorkor to
provide Centers for Medicare & Medicaid Services with cumulative
results and make recommendations for any appropriate changes to the
program.
• This is a more specific form for the general malnutrition issue.

OIG Issues - 2019
Part A and B
 Review of Medicare Payments for Bariatric Surgeries
 Bariatric surgery is performed to treat comorbid conditions associated
with morbid obesity. (A comorbid condition exists simultaneously with
another medical condition.) Medicare Parts A and B cover certain
bariatric procedures if the beneficiary has (1) a body mass index of 35
or higher, (2) at least one comorbidity related to obesity, and (3) been
previously unsuccessful with medical treatment for obesity (CMS,
Medicare National Coverage Determinations Manual, Pub. No. 100-03,
chapter 1, part 2, § 100.1). Treatments for obesity alone are not covered.
The Comprehensive Error Rate Testing program's special study of
certain Healthcare Common Procedure Coding System codes for
bariatric surgical procedures found that approximately 98 percent of
improper payments lacked sufficient documentation to support the
procedures (CMS, Medicare Quarterly Provider Compliance Newsletter,
"Guidance to Address Billing Errors," volume 4, issue 4, July 2014). We
will review supporting documentation to determine whether the
bariatric services performed met the conditions for coverage and were
supported in accordance with Federal requirements (Social Security
Act, §§ 1815(a) and 1833(e)). (2017)

OIG Issues - 2019
Telehealth Services – Coding/Billing
 Review of Medicare Payments for Telehealth Services
 Medicare Part B covers expenses for telehealth services on the
telehealth list when those services are delivered via an interactive
telecommunications system, provided certain conditions are met (42
CFR § 410.78(b)). To support rural access to care, Medicare pays for
telehealth services provided through live, interactive videoconferencing
between a beneficiary located at a rural originating site and a
practitioner located at a distant site. An eligible originating site must be
the practitioner's office or a specified medical facility, not a
beneficiary's home or office. We will review Medicare claims paid for
telehealth services provided at distant sites that do not have
corresponding claims from originating sites to determine whether
those services met Medicare requirements. (2017)
• See also the Medicaid Program

OIG Issues - 2019
Disproportionate Share
 Incorrect Medical Assistance Days Claimed by Hospitals
 The Medicare program, like the Medicaid program, includes provisions
under which Medicare-participating hospitals that serve a
disproportionate share of low-income patients may receive
disproportionate share hospital payments. In Medicare,
disproportionate share hospital payments to providers are based on
Medicaid patient days that the hospitals furnish. Providers report these
Medicaid patient days on the Medicare cost reports that Medicare
administrative contractors review and settle. Because Medicare
disproportionate share hospital payments are the result of calculations
to which a number of sometimes complex factors and variables
contribute, they are at risk of overpayment. We will determine whether,
with respect to Medicaid patient days, Medicare administrative
contractors properly settled Medicare cost reports for Medicare
disproportionate share hospital payments in accordance with Federal
requirements. (2017)
• See Also Ongoing Issues with Cost Report

OIG Issues - 2019
Intensity-Modulated Radiation Therapy
 Intensity-Modulated Radiation Therapy
 Intensity-modulated radiation therapy (IMRT) is an advanced mode of
high-precision radiotherapy that uses computer-controlled linear
accelerators to deliver precise radiation doses to a malignant tumor or
specific areas within the tumor. IMRT is provided in two treatment
phases: planning and delivery. Certain services should not be billed
when they are performed as part of developing an IMRT plan. Prior OIG
reviews identified hospitals that incorrectly billed for IMRT services. We
will review Medicare outpatient payments for IMRT to determine
whether the payments were made in accordance with Federal
• This issue will not go away. This is a complex coding area with
increasing volumes.

OIG Issues - 2019
Outlier Payments/Cost Report
 Reconciliations of Outlier Payments
 Outliers are additional payments that Medicare provides to hospitals for
beneficiaries who incur unusually high costs. The original outlier
payments are based on the cost-to-charge ratio from the most recently
settled cost report. The actual cost-to-charge ratio for the year in which
the service was provided is available only at the time of cost report
settlement for that year. Centers for Medicare & Medicaid Services
performs outlier reconciliations at the time of cost report settlement.
Without timely reconciliations and final settlements, the cost reports
remain open and funds may not be properly returned to the Medicare
Trust Fund (42 CFR § 412.84(i)(4)). We will review Medicare outlier
payments to hospitals to determine whether Centers for Medicare &
Medicaid Services performed necessary reconciliations in a timely
manner to enable Medicare contractors to perform final settlement of
the hospitals' associated cost reports. We will also determine whether
the Medicare contractors referred all hospitals that meet the criteria for
outlier reconciliations to Centers for Medicare & Medicaid Services.

OIG Issues - 2019
Medical Device Payments
 Payment Credits for Replaced Medical Devices That Were Implanted
 Certain medical devices are implanted during an inpatient or outpatient
procedure. Such devices may require replacement because of defects,
recalls, mechanical complication, etc. Federal regulations require
reductions in Medicare payments for the replacement of implanted
devices that are due to recalls or failures (42 CFR §§ 412.89 and 419.45).
Prior OIG reviews have determined that Medicare Administrative
Contractors made improper payments to hospitals for inpatient and
outpatient claims for replaced medical devices. We will determine
whether Medicare payments for replaced medical devices were made in
accordance with Medicare requirements.

OIG Issues - 2019
Hospital Payments
 Selected Inpatient and Outpatient Billing Requirements
 This review is part of a series of hospital compliance reviews that focus
on hospitals with claims that may be at risk for overpayments. Prior
OIG reviews and investigations have identified areas at risk for
noncompliance with Medicare billing requirements. We will review
Medicare payments to acute care hospitals to determine hospitals'
compliance with selected billing requirements and recommend
recovery of overpayments. Our review will focus on those hospitals
with claims that may be at risk for overpayments. (2017)
• We really need to have more information as to what the OIG is
going to investigate.
• Note that the OIG is willing to focus on hospitals that historically
have had problems. CMS seems to take a more universal
perspective when checking for overpayments.
• See: A-04-17-08055, A-01-15-00515, A-05-16-00064, A-04-16-04049, A-
05-16-00062

OIG Issues - 2019
Wage Data
 Review of Hospital Wage Data Used to Calculate Medicare Payments
 Hospitals report wage data annually to Centers for Medicare & Medicaid
Services, which is then used to calculate wage index rates to account
for different geographic area labor market costs. Prior OIG wage index
work identified hundreds of millions of dollars in incorrectly reported
wage data and resulted in policy changes by Centers for Medicare &
Medicaid Services with regard to how hospitals reported deferred
compensation costs. We will review hospital controls over the
reporting of wage data used to calculate wage indexes for Medicare
payments (SSA §§ 1886(d)(3) and 1886(d)(3)(E)).
• Although this does not appear a particularly

OIG Issues - 2019
Over 3-Midnight Rule
 Skilled Nursing Facility Prospective Payment System Requirements
 Medicare requires a beneficiary to be an inpatient of a hospital for at
least 3 consecutive days before being discharged from the hospital to
be eligible for skilled nursing facility (SNF) services (SSA § 1861(i)). If
the beneficiary is subsequently admitted to an SNF, the beneficiary is
required to be admitted either within 30 days after discharge from the
hospital or within such time as it would be medically appropriate to
begin an active course of treatment. Prior OIG reviews found that
Medicare payments for SNF services were not compliant with the
requirement of a 3-day inpatient hospital stay within 30 days of an SNF
admission. We will review compliance with the SNF prospective
payment system requirement related to a 3-day qualifying inpatient
hospital stay.
• Note that Total Knee Replacements have been removed from the
inpatient only listing.

OIG Issues - 2019
Home Health Coding/Billing & Documentation
 Home Health Compliance with Medicare Requirements
 The Medicare home health benefit covers intermittent skilled nursing
care, physical therapy, speech-language pathology services, continued
occupational services, medical social worker services, and home health
aide services. For CY 2014, Medicare paid home health agencies (HHAs)
about $18 billion for home health services. Centers for Medicare &
Medicaid Services's Comprehensive Error Rate Testing (CERT)
program determined that the 2014 improper payment error rate for
home health claims was 51.4 percent, or about $9.4 billion. Recent OIG
reports have similarly disclosed high error rates at individual HHAs.
Improper payments identified in these OIG reports consisted primarily
of beneficiaries who were not homebound or who did not require
skilled services. We will review compliance with various aspects of the
home health prospective payment system and include medical review
of the documentation required in support of the claims paid by
Medicare. We will determine whether home health claims were paid in
accordance with Federal requirements.
• This is a high growth rate area.

OIG Issues - 2019
Chiropractic Services
 Chiropractic Services - Part B Payments for Noncovered Services
 Part B pays only for a chiropractor's manual manipulation of the spine
to correct a subluxation if there is a neuro-musculoskeletal condition
for which such manipulation is appropriate treatment (42 CFR §
410.21(b)). Chiropractic maintenance therapy is not considered to be
medically reasonable or necessary and is therefore not payable
(Centers for Medicare & Medicaid Services's Medicare Benefit Policy
Manual, Pub. No. 10002, Ch. 15, § 30.5B). Prior OIG work identified
inappropriate payments for chiropractic services. Medicare will not pay
for items or services that are not "reasonable and necessary" (SSA §
1862(a)(1)(A)). We will review Medicare Part B payments for chiropractic
services to determine whether such payments were claimed in
accordance with Medicare requirements.
• Basically the Medicare program does not like chiropractic services
and this coverage is severely limited.
• See also ordering and referring issues particularly for diagnostic
services.

OIG Issues - 2019
Physical Therapy – Independent & High Utilization
 Physical Therapists - High Use of Outpatient Physical Therapy Services
 Previous OIG work found that claims for therapy services provided by
independent physical therapists were not reasonable, were not
properly documented, or the therapy services were not medically
necessary. Medicare will not pay for items or services that are not
"reasonable and necessary" (SSA § 1862(a)(1)(A)). We will review
outpatient physical therapy services provided by independent
therapists to determine whether they were in compliance with Medicare
reimbursement regulations. Our focus is on independent therapists
who have a high utilization rate for outpatient physical therapy
services. Documentation requirements for therapy services can be
found in Centers for Medicare & Medicaid Services's Medicare Benefit
Policy Manual, Pub. No. 100-02, Ch. 15, § 220.3.

OIG Issues - 2019
Medicare Advantage & Risk Adjustment
 Risk Adjustment Data - Sufficiency of Documentation Supporting
Diagnoses
 Payments to Medicare Advantage organizations are risk adjusted on the
basis of the health status of each beneficiary. Medicare Advantage
organizations are required to submit risk adjustment data to Centers
for Medicare & Medicaid Services in accordance with Centers for
Medicare & Medicaid Services instructions (42 CFR § 422.310(b)), and
inaccurate diagnoses may cause Centers for Medicare & Medicaid
Services to pay Medicare Advantage organizations improper amounts
(Social Security Act §§ 1853(a)(1)(C) and (a)(3)). In general, Medicare
Advantage organizations receive higher payments for sicker patients.
Centers for Medicare & Medicaid Services estimates that 9.5 percent of
payments to Medicare Advantage organizations are improper, mainly
due to unsupported diagnoses submitted by Medicare Advantage
organizations. (2017)
• MA programs continue to gain in popularity for both Medicare
beneficiaries and MAOs. Proper diagnosis coding and supporting
documentation are critical. Anticipate significant future activity.

OIG Issues - 2019
Medicare Advantage & Risk Adjustment
 Risk Adjustment Data - Sufficiency of Documentation Supporting
Diagnoses
 Prior OIG reviews have shown that medical record documentation does
not always support the diagnoses submitted to Centers for Medicare &
Medicaid Services by Medicare Advantage organizations. We will
review the medical record documentation to ensure that it supports the
diagnoses that Medicare Advantage organizations submitted to Centers
for Medicare & Medicaid Services for use in Centers for Medicare &
Medicaid Services's risk score calculations and determine whether the
diagnoses submitted complied with Federal requirements.

OIG Issues - 2019
Medicare Advantage Payments After Death
 Medicare Part C Payments for Service Dates After Individuals' Dates of
Death
 Centers for Medicare & Medicaid Services pays Medicare Advantage
organizations for Part C benefits prospectively. A prior OIG review of
deceased beneficiaries (OEI-04-12-00130) determined that Medicare
improperly made $23 million in payments in 2011, of which $20 million
was directly related to Medicare Part C payments that were made that
year after beneficiaries' deaths. Federal regulations require that
Medicare Advantage organizations disenroll a beneficiary from its
Medicare Advantage plan on the death of the individual, which is
effective the first day of the calendar month following the month of
death. We will determine whether prospective payments made after a
beneficiaries' date of death were in accordance with Medicare

OIG Issues - 2019
3-Day Payment Window
 Review of Medicare Payments for Nonphysician Outpatient Services
Provided Under the Inpatient Prospective Payment System
 Under the Medicare Part A inpatient prospective payment system
(IPPS), hospitals are paid a predetermined amount per discharge for
inpatient hospital services furnished to Medicare beneficiaries, as long
as the beneficiary has at least one benefit day at the time of admission.
The prospective payment amount represents the total Medicare
payment for the inpatient operating costs associated with a
beneficiary’s hospital stay. Inpatient operating costs include routine
services, ancillary services (e.g., radiology and laboratory services),
special care unit costs, malpractice insurance costs, and preadmission
services. Accordingly, hospitals generally receive no additional
payments for nonphysician outpatient services furnished shortly before
and during inpatient stays. Medicare makes a duplicate payment if it
makes a separate Part B payment to providers for such nonphysician
outpatient services. (2017)
• This issue has been around, in various forms, for years. Proper
coding and billing is still an issue.

OIG Issues - 2019
CPAP and BiPAP DME
 Positive Airway Pressure Device Supplies — Supplier Compliance with
Documentation Requirements for Frequency and Medical Necessity
 Beneficiaries receiving continuous positive airway pressure or
respiratory assist device therapy (PAP) require replacement of the
device’s supplies (e.g. mask, tubing, headgear, and filters) when they
wear out or are exhausted. Medicare payments for these supplies in
2014 and 2015 were approximately $953 million. Prior OIG work found
that suppliers automatically shipped PAP device supplies when no
physician orders for refills were in effect. For supplies and accessories
used periodically, orders or certificates of medical necessity must
specify the type of supplies needed and the frequency with which they
must be replaced, used, or consumed (Centers for Medicare & Medicaid
Services’s Medicare Program Integrity Manual, Pub. 100-08, Ch. 5, §§
5.2.3 and 5.9). Beneficiaries or their caregivers must specifically
request refills of repetitive services and/or supplies before suppliers
dispense them (Centers for Medicare & Medicaid Services’s Medicare
Claims Processing Manual, Pub. 100-04, Ch. 20, § 200). We will review
claims for frequently replaced PAP device supplies to determine
whether documentation requirements for medical necessity, frequency
of replacement, and other Medicare requirements are met. (2017)

OIG Issues - 2019
Outlier Payments & Cost Report
 Outpatient Outlier Payments for Short-Stay Claims
 CMS makes an additional payment (an outlier payment) for hospital
outpatient services when a hospital’s charges, adjusted to cost, exceed
a fixed multiple of the normal Medicare payment (Social Security Act
(SSA) § 1833(t)(5)). The purpose of the outlier payment is to ensure
beneficiary access to services by having Medicare share in the financial
loss incurred by a provider associated with extraordinarily expensive
individual cases. Prior OIG reports have concluded that hospitals’ high
charges, unrelated to cost, lead to excessive inpatient outlier
payments. We will determine the extent of potential Medicare savings if
hospital outpatient short stays (same day or over one midnight) were
ineligible for an outlier payments. Prior to a nationwide review, we plan
to perform several reviews at one or more hospitals to determine
whether outpatient outlier payments to hospitals are associated with
extraordinarily expensive individual cases. (2017)

OIG Issues - 2019
DME
 Payments for Medicare Services, Supplies, and DMEPOS Referred or
Ordered by Physicians-Compliance
 Centers for Medicare & Medicaid Services requires that physicians and
nonphysician practitioners who order certain services; supplies; and/or
durable medical equipment, prosthetics, orthotics, and supplies
(DMEPOS) be Medicare-enrolled physicians or nonphysician
practitioners and be legally eligible to refer and order services,
supplies, and DMEPOS (Patient Protection and Affordable Care Act §
6405). If the referring or ordering physician or nonphysician
practitioner is not eligible to order or refer, then Medicare claims
should not be paid. We will review select Medicare services, supplies,
and DMEPOS referred or ordered by physicians and nonphysician
practitioners to determine whether the payments were made in
accordance with Medicare requirements. (2017)

OIG Issues – 2018
Hospice Related
 Hospice Home Care — Frequency of Nurse On-Site Visits to Assess Quality
of Care and Services
 In 2013, more than 1.3 million Medicare beneficiaries received hospice
services from more than 3,900 hospice providers, and Medicare
hospice expenditures totaled $15.1 billion. Hospices are required to
comply with all Federal, State, and local laws and regulations related to
the health and safety of patients (42 CFR § 418.116). Medicare requires
that a registered nurse make an on-site visit to the patient's home at
least once every 14 days to assess the quality of care and services
provided by the hospice aide and to ensure that services ordered by
the hospice interdisciplinary group meet the patient’s needs (42 CFR §
418.76(h)(1)(i)). We will determine whether registered nurses made
required on-site visits to the homes of Medicare beneficiaries who were
in hospice care. (2017)

OIG Issues – 2018
Other Providers/Suppliers
 Ambulance Services – Supplier Compliance with Payment Requirements
 Medicare pays for emergency and nonemergency ambulance services
when a beneficiary’s medical condition at the time of transport is such
that other means of transportation would endanger the beneficiary
(SSA § 1861(s)(7)). Medicare pays for different levels of ambulance
service, including basic life support, advanced life support, and
specialty care transport (42 CFR § 410.40(b)). Prior OIG work found that
Medicare made inappropriate payments for advanced life support
emergency transports. We will determine whether Medicare payments
for ambulance services were made in accordance with Medicare
requirements. (Revised 2017)

OIG Issues - 2019
RAC Issues
 Where do the RACs find the issues that they will investigate?
 How hard it is for the RACs to obtain approval from CMS for a given issue
or series of issues?
 Do the current (i.e., last five years) issues from the OIG gives the RACs
additional information for possible investigations?
 The OIG conducts audits on a wide range of topics, but the number of
actual healthcare providers involved is relatively small.
 The RACs focus on specific approved issues, but their coverage of
healthcare providers is quite broad.
 Do you anticipate that any of the OIG issues that we have discussed may
become RAC issues in the future?
 Are there different nuances for these possible issues that are of concern?
 Example – The concept of ‘incident-to’ has vastly different implication
for physicians versus hospitals in terms of payment issues.

OIG Issues – 2018
RAC Issues
 RAC Pause – Difficulties at the OMHA – Backlog of Cases
 Many cases probably involve short inpatient admissions.
 See the new Over 2-Midnight Rule  QIO Audits
 Statistical approaches to address backlog.
 See also, changes in the Appeals Process.
 New RAC Contracts – 5 Regions (4 Regional + 1 National)
 Current RAC Issues
 Possible Future RAC Issues
 Use of Data Mining and Analytics
 RACs have developed and continue to use data mining and analytical
programs to identify possible areas for recoupment.
 Now pre-payment analytics are being developed.
 Also, the OIG is now going to use analytic software for targeting
possible audits.
 Prepayment Audit Demonstration Project

OIG Issues - 2019
Performing Audits and Reviews
 Given all the work plan issues, what should you do?
 Hospital vs. Clinics vs. Other Types of Providers
 Reading and Studying OIG Findings, Conclusions and Recommendations
 How do you set up an auditing program?
 Who should perform audits and reviews?
 Internal
 External (Independent Review Organization – IRO)
 What is a probe audit?
 What is the purpose of a probe audit?
 What is RAT-STATS?
 Where can I get this software?
http://www.oig.hhs.gov/organization/OAS/ratstat.html
 Does the OIG actually use this?
 How do I determine sample sizes?
 How do I ‘randomly’ select cases?
 What does ‘extrapolate the results’ mean?
 Can OIG/Medicare audits be challenged?

 Enormous Challenges for Healthcare Compliance
 We Have Discussed/Reviewed Certain Areas  There are more!!
• Discrete vs. Continuous Process – OIG Work Plan(s)
• What is the relationship between RAC and OIG issues?
 Advent of the Medicare RAC Program
 Issues carry over from OIG/DOJ/CMS to RAC audits
 Now a Medicaid RAC program is being initiated
 Review Pertinent OIG Issues - 2019 Back To 2014
 Look at current year and previous four or five years.
 Watch for reports resulting from the investigations as delineated in the
annual OIG Work Plan
 Watch for trends – Try to anticipate issues before they arise
• It is much easier to address concerns at the current time versus
trying to go back in time.
 Need For Audit and Reviews – Internal vs. External
 Modify audit and review programs based, to some extent, on the OIG
concerns.
 Be certain that you understand the issue as stated by the OIG and then
expand and think in broader terms.
OIG Issues - 2019
Summary & Conclusions

OIG: Trends, Reports and Issues: FY2019

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