The Office of Inspector General (OIG) is administered by the Secretary of Health and Human Services (HHS). There are six offices within HHS OIG:
The following is the OIG’s published mission:
Our mission, as mandated by the Inspector General Act of 1978, 5 U.S.C. App., is to conduct and supervise audits and investigations relating to the programs and operations of HHS; provide leadership and coordination and recommend policies for activities designed to promote economy, efficiency, and effectiveness in the administration of, and to prevent and detect fraud and abuse in, such programs and operations; and provide a means for keeping the Secretary of HHS and Congress informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action.
The OIG reports both to the HHS Secretary and to Congress. The OIG's essential tasks are conducted through a nationwide network of audits, investigations, and inspections performed by the following OIG components:
OFFICE OF INSPECTOR GENERAL ORGANIZATION CHART
Through this provision providers and entities that hire or contract with excluded individuals or entities to provide items or services to Federal program beneficiaries may be subject to a civil monetary penalty (CMP) of up to $10,000 for each service or item furnished by the excluded entity and an additional penalty of up to three times the amount claimed as well as possible exclusion themselves.
The OIG lists the following effects of exclusion:
Prior to hiring an individual or contracting with an agency verify that they have not been excluded from Federal programs by searching the online OIG List of Excluded Individuals.
THE OIG WORKPLAN
The 2009 OIG Work Plan includes the following Medicare and Medicaid areas deemed “most worthy of attention” in 2009:
Hospital Ownership of Physician Practices
(OEI; 00-00-00000; expected issue date: FY 2009; new start)
Medicare Secondary Payer
We will review Medicare payments for beneficiaries who have other insurance. Pursuant to the Social Security Act, § 1862(b), Medicare payments for such beneficiaries are required to be secondary to certain types of insurance coverage. We will assess the effectiveness of current procedures in preventing inappropriate Medicare payments for beneficiaries with other insurance coverage. For example, we will evaluate procedures for identifying and resolving credit balance situations, which occur when payments from Medicare and other insurers exceed the providers’ charges or the allowed amount.
(OAS; W-00-08-35317; various reviews; expected issue date: FY 2010; work in progress)
Physician Billing for Medicare Hospice Beneficiaries
We will review the extent of Part B billing for physician services provided to Medicare hospice beneficiaries. The regulations at 42 CFR § 418.304 list the physician services that are already covered by Medicare under the hospice benefit. The regulation provides that, for physicians employed by or in an arrangement with the hospice, payments for certain services are reimbursed to the hospice as part of the hospice payment, while other services are paid to the hospice under the Part B MPFS. Physicians may receive reimbursement for hospice services under Medicare Part A or Part B. This study is a follow-up to recent OIG studies on hospice care. We will determine the frequency of and total expenditures for physician services under Part A and Part B for hospice beneficiaries. We will identify whether physicians double-billed hospice services to Part A and Part B.
(OEI; 00-00-00000; expected issue date: FY 2009; new start)
Place of Service Errors
We will review physician coding of place of service on Medicare Part B claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments. Federal regulations at 42 CFR § 414.22(b) (5) (i) (B) provide for different levels of payments to physicians depending on where the services are performed. Medicare pays a physician a higher amount when a service is performed in a nonfacility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ASC. We will determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments.
(OAS; W-00-08-35113; various reviews; expected issue date: FY 2009; work in progress)
Medicare Practice Expenses Incurred by Selected Physician Specialties
We will review the actual expenses of selected physician specialties. Physician services include medical and surgical procedures, office visits, and medical consultations. Physicians are paid for services pursuant to the MPFS, which covers the major categories of costs including the physician professional cost component, malpractice costs, and practice expense. The Social Security Act, § 1848(c)(1)(B), defines “practice expense” as the portion of the resources used in furnishing the service that reflects the general categories of expenses, such as office rent, wages of personnel, and equipment. We will determine whether Medicare payments for physician services performed by selected specialties are comparable to the actual expenses incurred by the physicians in providing services and operating their practices.
(OAS; W-00-09-35219; various reviews; expected issue date: FY 2009; new start)
Physicians’ Medicare Services Performed by Nonphysicians
(OEI; 09-06-00430; expected issue date: FY 2009; work in progress)
Medicare Payments for Unlisted Procedure Codes
We will review the accuracy of Medicare payments for services billed using unlisted procedure codes. Unlisted procedure medical codes are miscellaneous codes used by service providers only when there are no specific Healthcare Common Procedure Coding System (HCPCS) codes that accurately identify the medical service furnished. The Social Security Act, § 1848(a) (1), establishes the MPFS, which provides a payment amount for almost all HCPCS codes, as the basis for Medicare reimbursement for physician services. However, unlisted procedure codes are not paid under the fee schedule. The Medicare contractors that process such claims suspend them for individual review and manual pricing. We will examine provider usage of procedure codes for services not listed in the HCPCS.
(OEI; 00-00-00000; expected issue date: FY 2010; new start)
Medicare Billings With Modifier GY
We will review the appropriateness of providers’ use of modifier GY on claims for services that are not covered by Medicare. CMS’s “Medicare Carriers Manual,” Pub. No. 14-3, pt. 3, § 4508.1, states that modifier GY is to be used for coding services that are statutorily excluded or do not meet the definition of a covered service. Beneficiaries are liable, either personally or through other insurance, for all charges associated with the provision of these services. Pursuant to CMS’s “Medicare Claims Processing Manual,” Pub. No. 100-04, ch. 1, § 60.1.1, providers are not required to provide beneficiaries with advance notice of charges for services that are excluded from Medicare by statute. As a result, beneficiaries may unknowingly acquire large medical bills that they are responsible for paying. In FY 2006, Medicare received over 53 million claims with a modifier GY and denied claims totaling over $400 million. We will examine patterns and trends for physicians’ and suppliers’ use of modifier GY.
Medicare Payment for Chemotherapy Drug Administration Services
(OEI; 09-08-00190; expected issue date: FY 2009; work in progress)
Laboratory Test Unbundling by Clinical Laboratories
We will review the extent to which clinical laboratories have inappropriately unbundled laboratory profile or panel tests to maximize Medicare payments. Pursuant to the “Medicare Claims Processing Manual,” Pub. No. 100-04, ch. 16, § 90, to ensure the accuracy of payments, Medicare contractors must group together individual laboratory tests that clinical laboratories can perform at the same time on the same equipment and then consider the price of related profile tests. Payment for individual tests must not exceed the lower of the profile price or the total price of all the individual tests. We will determine whether clinical laboratories have unbundled profile or panel tests by submitting claims for multiple dates of service or by drawing specimens on sequential days. We will also determine the extent to which the Medicare carriers have controls in place to detect and prevent inappropriate payments for laboratory tests.
(OAS; W-00-09-35222; various reviews; expected issue date: FY 2010; new start)
Monitoring Medicare Part B Drug Prices: Comparing Average Sales Prices to Widely Available Market Prices
We will periodically review WAMPs for selected prescription drugs covered by Part B and compare them to ASPs for those drugs. In 2005, Medicare began paying for most Part B drugs using a new methodology based on the ASP. The Social Security Act, § 1847A(d), enacted by section 303(c)(1) of the MMA, mandates that OIG compare ASPs to WAMPs (if any) for Part B drugs and notify the Secretary, at such times as the Secretary may specify, if the ASP for a selected drug exceeds the WAMP by a threshold of 5 percent. We will compare ASPs to WAMPs and identify drug prices that exceed the threshold.
(OEI; 00-00-00000; various studies; expected issue date: FY 2009; new start)
Monitoring Medicare Part B Drug Prices: Comparing Average Sales Prices to Average Manufacturer Prices
We will periodically review Medicare Part B drug prices by comparing ASPs to AMPs. In 2005, Medicare began paying for most Part B drugs using a new methodology based on the ASP. The Social Security Act, § 1847A(d), enacted by section 303(c)(1) of the MMA, mandates that OIG compare ASPs to AMPs for Part B drugs and notify the Secretary, at such times as the Secretary may specify, if the ASP for a selected drug exceeds the AMP by a threshold of 5 percent. We will compare ASPs to AMPs for Part B drugs and identify drug prices that exceed the threshold.
(OEI; 03-08-00530; 03-08-00450; various studies; expected issue date: FY 2009; work in progress)
Variation of Laboratory Pricing
We will review the extent of variation in laboratory test payment rates among Medicare contractors. The Social Security Act, § 1833(h), requires the Secretary to establish a payment fee schedule for clinical diagnostic laboratory tests. In 2007, Medicare payments for laboratory services exceeded $6 billion. Prior OIG work found that Medicare had paid significantly higher prices than other payers for certain laboratory tests. We will analyze claims data to determine pricing variances among Medicare contractors for the most commonly performed tests.
(OEI; 05-08-00400; expected issue date: FY 2009; work in progress)
Providers Billing More Time Than Is Feasible in a Day
We will review services provided by physicians to determine whether claims are submitted for more time than is feasible in a day. Prior partnership audits in one State identified significant improper claims submission and service upcoding by physicians. We will analyze provider claims to identify providers with potential billing problems.
(OAS; W-00-09-31137; various reviews; expected issue date: FY 2009; new start)
Medicare/Medicaid Credit Balances
We will review providers, including independent laboratories and hospitals, to determine whether there are Medicare/Medicaid overpayments in patient accounts with credit balances. For Medicare, the Social Security Act, § 1862(b), and 42 CFR pt. 411 require participating providers to furnish information about payments made to them and to refund any monies incorrectly paid. For Medicaid, the Social Security Act, § 1902(a)(25), regulations at 42 CFR pt. 433, subpart D, and various State laws require that Medicaid be the payer of last resort and that providers identify and refund overpayments received. Prior OIG work has identified Medicare/Medicaid overpayments in patients’ accounts with credit balances.
(OAS; W-00-08-31311; various reviews; expected issue date: FY 2009; work in progress)
States’ Accountability Over Medicaid Drug Rebate Programs
We will conduct follow-up reviews to determine whether States have established adequate accountability and internal controls over their Medicaid drug rebate programs. Federal regulations at 45 CFR § 433.32 require that financial management systems provide for effective control over and accountability for all funds, property, and other assets. During our follow-up reviews, we will review State Medicaid agencies’ collection of brand-name drug manufacturer rebates for physician-administered drugs since the passage of the DRA. Pursuant to section 6002 of the DRA, States are required to collect data necessary to enable them to collect rebates on physician-administered drugs. Previous OIG work found that the majority of States were not collecting Medicaid rebates for physician-administered drugs and that most States had weaknesses in accountability and internal controls over their drug rebate programs. We will determine whether States have established adequate internal controls over their Medicaid drug rebate programs. We will also determine whether State Medicaid agencies followed Federal regulations when collecting brand-name drug manufacturer rebates for physician-administered drugs.
HEALTH CARE FRAUD
The OIG continues to focus on the investigation of fraud committed against the Medicare and Medicaid programs. The OIG performs investigations in conjunction with other law enforcement agencies, such as the Federal Bureau of Investigation (FBI), the United States Postal Inspection Service, the Internal Revenue Service (IRS), and State Medicaid Fraud Control Units (MFCU).
OIG actively investigates individuals, facilities, or entities that bill or are alleged to have billed Medicare and/or Medicaid for services not rendered, claims that manipulate payment codes in an effort to inflate reimbursement amounts, and false claims submitted to obtain program funds. The OIG also investigates business arrangements for violations of the Federal health care anti-kickback statute and the statutory limitation on self-referrals by physicians.
Check the OIG List of Excluded Individuals prior to hiring an individual or contracting with an individual or entity. Remember, the Exclusion Program is not limited to physicians. Nurses, pharmacists, lab personnel, administrators, billing staff and other practice staff are subject to exclusion from federal healthcare programs.
If you have not done so already, begin developing a voluntary compliance program. The American Medical Association recommends that practices adopt a compliance audit and monitoring program based on the seven components outlined in “Compliance Program Guidance for Individual and Small Group Physician Practices,” published by the OIG on September 25, 2000.
The seven components of the Compliance Program Guidance are:
The OIG developed this Guidance to assist physician practices in developing their own voluntary compliance program and to prevent the submission of erroneous claims or unlawful conduct involving the Federal health care programs.
The OIG states that the development and implementation of a voluntary compliance program will show that your practice is making additional good faith efforts to submit claims appropriately. Furthermore, it sends an important message to your employees that while the practice recognizes that mistakes will occur, employees have an affirmative, ethical duty to come forward and report erroneous or fraudulent conduct, so that it may be corrected.
The OIG is cognizant of the resource limitations that may face a small physician group and they emphasize that practices are not required to fully implement all seven components. Instead, they suggest that practices focus first on those components which are most likely to provide an identifiable benefit based on the practice’s specific history with billing and compliance issues.
The OIG has identified the following four high risk areas for physicians:
The OIG recommends that practices perform a self-audit at least once a year to determine whether:
Finally, even if you do not currently have a compliance program, perform a self-audit focusing on the four high risk areas listed above. Review the current year’s OIG Work Plan to identify areas of vulnerability and risk that the OIG will be focusing on and include these items in your self-audit.
OTHER RESOURCES AVAILABLE ON
Special Advisory Bulletins
Office of Audit Services Reports
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