OIG 2008 Work Plan - Acute Hospitals

Annually in October, the OIG releases its Work Plan for the coming Fiscal Year.  The HHS Office of Inspector General Work Plan previews OIG projects that are scheduled in the upcoming year for each of the major entities within the Department of Health and Human Services:

- Centers for Medicare and Medicaid Services

- Public Health Service Agencies

- Administrations for Children, Family, and Aging         

Information is also provided on projects related to issues that cut across departmental programs, including state and local government use of Federal funds, as well as the functional areas of the Office of the Secretary. Some of the projects described in the Work Plan are statutorily required, such as the audit of the department’s financial statements, which is mandated by the Government Management Reform Act.  The Work Plan can serve as an invaluable guide for professionals and organizations to identify the targets of OIG scrutiny and enforcement activity. The 2008 Work Plan covers the full spectrum of healthcare and human services, from medical necessity and coding issues to clinical trials and care provided in nursing homes.  Below are hot topics being targeted in the 2008 OIG Workplan:

Hospital Capital Payments
The OIG will review Medicare inpatient capital payments. Capital payments are a hospital’s expenditures for assets such as equipment and facilities. The basic methodology for determining capital prospective rates is found at 42 Code of Federal Regulations (CFR) § 412.308. The OIG will determine whether capital payments to hospitals are appropriate. They will also examine the methodology used to update capital rates and analyze the appropriateness of the payment level.

Inpatient Prospective Payment System Wage Indices
The OIG will review hospital and Medicare controls over the accuracy of the hospital wage data used to calculate wage indices for the IPPS. Hospitals must accurately report wage data for CMS to properly calculate the wage index in accordance with section 1886(d)(3) of the Social Security Act. Their prior work found hundreds of millions of dollars in misreported wage data. They will determine whether hospitals have complied with Medicare requirements for reporting wage data and determine the effect on the Medicare program of incorrect diagnosis-related group (DRG) reimbursement caused by inaccurate wage data. They will also examine the appropriateness of using hospital wage indices for other provider types.

Special Payment Provisions for Patients Who Are Transferred to Onsite Providers and Readmitted to Long Term Care Hospitals
The OIG will review the application of special payment provisions for patients who were transferred to onsite providers and readmitted to LTCHs. Pursuant to Federal regulations at 42 CFR § 412.532, if an LTCH discharges patients to specified colocated providers and directly readmits more than 5 percent of the total number of its Medicare inpatients discharged from that setting, special payment provisions apply. They will determine whether the special payment provisions were appropriately applied.

Special Payment Provisions for Long Term Care Hospitals Discharging Beneficiaries to Colocated or Satellite Providers
The OIG will review the application of special payment provisions for LTCHs discharging beneficiaries to colocated hospitals or satellite providers. Pursuant to Federal regulations at 42 CFR § 412.534, special payment provisions apply if an LTCH’s or LTCH satellite facility’s discharged Medicare inpatient population that was admitted to the LTCH or satellite facility from the colocated hospital exceeds the applicable threshold outlined in the regulations. In these situations, payments to the LTCH may be reduced. They will determine whether the special payment provisions were appropriately applied.

Medicare Disproportionate Share Payments
The OIG will review Medicare disproportionate share (DSH) payments made to hospitals. Under section 1886(d)(5)(F)(i)(I) of the Social Security Act, Medicare makes additional payments to acute care hospitals that serve a significantly disproportionate number of low-income Medicare and Medicaid patients. Medicare DSH payments have been steadily increasing, and previous OIG work has identified overpayments in this area. They will determine whether these payments were made in accordance with Medicare criteria set forth in section 1886(d)(5)(F)(vii) of the Social Security Act. They will review various components of the calculation methodology as set forth in section 1886(d)(5)(F)(v)-(vi) of the Social Security Act, determine whether the hospitals' classifications are appropriate, and examine the total amounts of uncompensated care costs that hospitals incur.

Provider Bad Debts
The OIG will review Medicare bad debts claimed by acute care inpatient hospitals, LTCHs, inpatient rehabilitation facilities, inpatient psychiatric facilities, and SNFs to determine whether they were reimbursable. Pursuant to Federal regulations at 42 CFR § 413.89, uncollectible debts related to unpaid deductible and coinsurance amounts may be claimed as Medicare bad debt if specific criteria are met. They will determine whether the bad debt payments were appropriate under Medicare regulations and whether recoveries of prior year writeoffs were properly used to reduce the cost of beneficiary services for the period in which the recoveries were made.

Compliance With Medicare’s Transfer Policy
The OIG will review coding of claims submitted by hospitals for erroneously coded discharges that should have been coded as transfers. Pursuant to Federal regulations at 42 CFR § 412.4 (e), a hospital discharging a beneficiary is paid the full DRG payment. In contrast, under 42 CFR § 412.4(f), a hospital that transfers a beneficiary to another facility is paid a graduated per diem rate, not to exceed the full DRG payment that would have been made if the beneficiary had been discharged without being transferred. They will determine whether claims were appropriately coded.

We again encourage management to periodically refer to the OIG Work Plan and use it as a tool to measure the Hospital's policies and procedures and determine if they are in check with the OIG’s interpretations. As a reference, we have included on our website a chart detailing all the topics addressed in the OIG Work Plans from 1997 to 2008. To view, click here.