OIG Releases 2006 Work Plan

The OIG’s message is clear: When Medicare Part D takes effect January 1, the feds will be watching. The OIG spelled out detailed plans for monitoring the massive drug-benefit program in its 2006 Work Plan, released yesterday.

In addition to a new Part D section, next year’s Work Plan includes several familiar items geared toward providers. Investigators will continue to monitor organ acquisition costs, claims for coronary artery stents, and restraint-related deaths. The 2006 Work Plan also brings several new items–including projects related to treatment for dialysis patients, and payments for inpatient psychiatric and rehabilitation stays.

“It’s what I would consider very consistent with past work plans,” says Robert A. Wade, Esq., a partner with Baker & Daniels in South Bend, IN. "There are areas that continue to ebb and flow and change. Providers need to analyze the Work Plan annually. If they believe that there’s any risk within their internal operations for an item on the Work Plan, then it's incumbent on them to review that area.”

Medicare Part D

The effect of Medicare Part D on providers is “anyone’s guess,” says James Kopf, president of Health Care Oversight, a consulting firm in New Canaan, CT and former director of program investigation for the OIG. Questions remain surrounding who is responsible for covering self-administered, take-home prescription drugs. “There’s no clarification as to who is going to pay and how it’s going to be billed,” Kopf says.

Providers should also be wary of kickback arrangements under Part D. “The pharmacy benefit managers can, more or less, say what kind of drugs are going to be used. They may be receiving a kickback for using a more expensive drug,” Kopf says.

The OIG is training special agents to review relationships under Part D for “kickbacks, billing for services not rendered, false statements, prescription shorting in institutional settings, and telephone scams,” according to the 2006 Work Plan.

To monitor Part D, the OIG will assess

  • the extent to which Medicare beneficiaries are aware of the program’s low-income subsidy
  • true out-of-pocket costs to beneficiaries
  • the marketing of Part D benefits
  • CMS’s coordination and oversight of auto-enrollment of Medicaid beneficiaries into Medicare Part D plans
  • the coordination between Medicare Parts B and D, to prevent duplicate payments
  • fraud and abuse controls over the prescription drug card programDialysisThe 2006 Work Plan lists several projects related to dialysis treatment, including an investigation of observation payments for patients admitted to receive dialysis services.

    “If a patient is only in the hospital to receive dialysis services, then they should be admitted as an outpatient instead of an inpatient,” Wade says. “If the patient is admitted as an inpatient, then the hospital receives a DRG payment which is higher than the hourly payment under observation.”

    Other dialysis-related projects include

  • Medicare reimbursement for end-stage renal disease (ESRD) drugs
  • separately billable laboratory services under the ESRD program
  • CMS and state agency oversight of quality of care at ESRD facilitiesOther key areasThe OIG plans to determine whether hospitals receive appropriate reimbursement for new technologies.

    Additionally, the OIG plans several reviews of outpatient services. Investigators plan to pursue unbundling, DRG coding, “inpatient-only” services in the outpatient setting, and the appropriateness of payments for multiple procedures, repeat procedures, and global surgeries.

    The Work Plan covers the spectrum of healthcare, from medical necessity and coding issues to Medicaid drug reimbursement and care provided in nursing homes. Here is a run-down of other projects slated for coming year:


  • Adjustments for graduate medical education—The OIG will determine whether reimbursements reflect audit adjustments for graduate medical education.
  • Inpatient psychiatric hospitals—The OIG will determine whether payments to inpatient psychiatric hospitals were appropriate, including payments for outliers and interrupted stays.
  • Inpatient rehabilitation–late assessments—The OIG will determine whether hospital payments were appropriate when patient assessments were entered late.Physicians
  • Initial preventive physicals—The OIG will evaluate the impact of initial preventative physical examinations on Medicare payments and physician billing practices.
  • Billing service companies—The OIG will examine arrangements between billing companies and their clients (e.g., physician practices).
  • “Long-distance” physician claims—The OIG will review claims for face-to-face physician encounters where a significant distance separated the practice and the beneficiary’s home.Nursing homes
  • Dually eligible residents under Medicare Part D—The OIG will determine whether dual-eligible residents maintain the same medications under Medicare Part D.
  • Skilled nursing facility (SNF) consecutive inpatient stays—The OIG will determine the medical necessity of SNF care for beneficiaries with consecutive inpatient stays.
  • SNF payments for day of discharge—The OIG will determine whether Medicare is inappropriately paying SNFs for services on the day of discharge.

To read the OIG’s Work Plan, go to http://oig.hhs.gov/publications/docs/workplan/2006/WorkPlanFY2006.pdf

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