2014

Recently, the Office of Inspector General (the “OIG”), the enforcement arm for the United States Department of Health and Human Services (“HHS”)¹ , released its Fiscal Year 2015 Work Plan. Therein, the OIG “summarizes new and ongoing reviews and activities that OIG plans to pursue with respect to HHS programs and operations during the current fiscal year and beyond.” Each year, the OIG publishes its Work Plan to categorize those areas of focus due to “limitations in the money appropriated to OIG.” 

In 2015, the OIG will focus primarily on the billing, payment and quality of care issues with respect to hospitals, nursing homes, hospices, and home health care agencies. The OIG will further address issues related to medical equipment and supply companies. These practice groups represent the primary focus of the OIG’s Work Plan and 2015 enforcement activities. 

Other practice areas do not escape all enforcement focus, however. With respect to ambulatory surgery centers (“ASC”), OIG will address the following issues:

1. The appropriateness of Medicare’s methodology for setting ASC payment rates under the revised payments system;
2. Whether a disparity exists between the ASC and hospital outpatient department payment rates for similar procedures;
3. An examination of Medicare claims data to assess the entent of questionable billing within ASCs; and
4. An examination of whether certain ASC ground transport services were appropriate.

With respect to diagnostic and imaging services, the OIG will direct its 2015 focus to:

1. Review Medicare payments for high-cost diagnostic radiology tests to determine whether the tests were medically necessary.² 
2. Review of Medicare Part B payments “to determine whether they reflect the expenses incurred and whether the utilization rates reflect industry practices.” The OIG will look to actual and realistic practice expenses upon which the physician fee schedule is based, e.g. office rent, malpractice insurance, wages and equipment. 

The OIG also will direct some limited focus on chiropractic practices, ophthalmologists, physical therapists and sleep disorder clinics. The OIG focus, with respect to these practice areas, is limited to particularities within the practices. 

ASCs and imaging and diagnostic facilities should find some comfort with the OIG’s Work Plan. Specifically, certain areas of focus relate to whether the current rate structures and fee schedules are “fair.” For example, the OIG will examine whether a disparity exists between the ASC and hospital outpatient department payment rates for similar procedures. Any practitioner or ASC owner will certainly readily acknowledge the obvious answer to this examination. However, reading between the lines, one would think the OIG’s primary focus is on whether the actual disparity is justified or logical. 

In making this determination, the OIG will look to the 2008 change in Federal law requiring the HHS to implement the revised ASC payments system modeled on the Outpatient Prospective Payment System. 42 CFR § 416.171. Of course, the OIG has no regulatory power. It merely can demonstrate findings and propose recommendations to HHS. However, the sheer examination alone is a topic of encouragement.

¹OIG summarizes its purpose as follows: “Our organization was created to protect the integrity of HHS programs and operations and the well-being of beneficiaries by detecting and preventing fraud, waste, and abuse; identifying opportunities to improve program economy, efficiency, and effectiveness; and holding accountable those who do not meet program requirements or who violate Federal health care laws. Our mission encompasses more than 100 programs administered by HHS at agencies such as the Centers for Medicare & Medicaid Services, Administration for Children and Families, Centers for Disease Control and Prevention, Food and Drug Administration, and National Institutes of Health.”

²Medicare only pays for services that are “reasonable and necessary.” Social Security Act § 1862(a)(1)(A)

For more information about this topic please contact: 

Rich Haskin, Esq, Partner 
Gibbs Giden Locher Turner Senet & Wittbrodt LLP 
7450 Arroyo Crossing Parkway, Suite 270
Las Vegas, Nevada 89113
email: rhaskin@gibbsgiden.com 

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