OIG 2008 Work Plan - Non-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.

Long Term Care Hospital Payments for Interrupted Stays
The OIG will review certain payments made to long term care hospitals (LTCH). Pursuant to Federal regulations at 42 CFR § 412.531, special payment provisions apply to interrupted stays at LTCHs. As defined in 42 CFR § 412.531, an interrupted stay occurs when a beneficiary is discharged from an LTCH to certain kinds of facilities and then returns to the same LTCH within specified periods of time. They will determine whether payments for interrupted stays made to LTCHs were correct.

Long Term Care Hospital Short Stay Outliers
The OIG will review payments for cases discharged from LTCHs with lengths of stay well below the average for their DRGs, which are referred to as short stay outliers (SSO). Section 123 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA), Pub. L. No. 106-113, mandated the implementation of a Prospective Payment System (PPS) for LTCH facilities. Between 1995 and 2003, Medicare payments for LTCHs increased from $836 million to more than $2.7 billion. In 2002, Medicare began paying LTCHs under a PPS based on the same DRGs as those for inpatient acute-care hospitals. However, CMS applies a larger base payment to LTCHs. Their review will focus on the distribution of and payment amounts for SSO cases. They also will review cases that only marginally exceeded the SSO threshold.

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.

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.

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.