Deeper Than the Headlines: How Compliance Professionals Can Use the OIG Semiannual Report

We all “report up” to somebody at some point and that goes for the OIG, too, in their regular reports to Congress. Recently, the OIG submitted its Semiannual Report to Congress for the period of Oct. 1, 2016 to March 31, 2017. Reading the OIG’s reports can give healthcare providers and entities a little taste of where the OIG is spending their time auditing and hints at where they will focus their efforts in the near future. It’s probably a good idea to review the topics in case your organization provides some of the services. There were a few sections in particular that caught my eye.

Chiropractic Services:

In October of 2016, the OIG issued report A-09-14-02033 which concluded that if beneficiary treatments extended beyond 12 treatments in a year, it was increasingly likely that the individual services were medically unnecessary. Additionally, the OIG had performed four separate reviews of individual chiropractors and found that Medicare made improper payments for chiropractic services that were medically unnecessary, incorrectly coded, insufficiently documented, or not documented. In fact, their most recent report on chiropractic services estimated that $358.8 million (82 percent) of the $438.1 million paid by Medicare for chiropractic services were unallowable. As a result of the work and recommendations made by OIG about chiropractic services, CMS agreed to determine a reasonable number of chiropractic services necessary to actively treat spinal subluxation and identify services for review in excess of that number. Additionally, they agreed to improve the education of chiropractors on Medicare coverage requirements for chiropractic services.

Cochlear Devices:

Many previous OIG reports have outlined the issues that some hospitals have had with failing to report credits received from manufacturers for replaced medical devices and OIG states they’ve already identified approximately $10 million in Medicare overpayments because of these failures.

One specific example includes cochlear devices (hearing aids) as reported in the OIG’s report A-01-15-00508, November 2016:

For the 116 incorrectly billed claims the OIG identified, hospitals received $2.7 million in Medicare overpayments. OIG made the following recommendations, all of which CMS agreed with:

(1) verify the $1.4 million in identified overpayments that hospitals stated they refunded to Medicare during our review

(2) recover $686,000 in identified overpayments for calendar years (CY) 2013 and 2014 that had not been refunded to Medicare

(3) assist hospitals in returning the agreed-upon overpayments of $553,000 for CY 2012 claims that are outside the Medicare 4-year reopening period

(4) educate hospitals on how to appropriately bill for and report medical devices replaced without cost to the hospital or beneficiary, including cochlear devices.

2-Midnight Rule:

CMS implemented the 2-midnight rule to address concerns about hospitals’ use of short inpatient and long outpatient stays. The rule establishes that inpatient payment is generally appropriate if physicians expect beneficiaries’ care to last at least 2 midnights; otherwise, outpatient payment is generally appropriate. During the OIG’s review, they identified several vulnerabilities in hospital billing under Medicare’s 2-midnight policy, including a large number of potentially inappropriate short inpatient stays and an increased number of beneficiaries in outpatient stays paying more and having limited access to skilled nursing facility (SNF) services compared to inpatients.

OIG recommended that organizations explore ways to ensure that beneficiaries receiving hospital care in outpatient status have similar cost-sharing protections and access to SNF care as beneficiaries receiving similar hospital care in inpatient status. These findings and recommendations can be found in OIG report OEI-02-15-00020, December 2016.

Future Efforts:

Looking to the future, OIG plans to track its own performance in priority areas, such as the following:

(1) protecting beneficiaries from prescription drug abuse

(2) reducing improper payments for home health services in fraud “hot spots”

(3) improving program integrity for the Child Care and Development Fund grant programs

(4) maximizing the effectiveness of State Medicaid Fraud Control Units.

Like I said, the report is lengthy and contains many more examples of the work OIG has performed over the last six months. If you’re in the compliance field, it’s worth reviewing in case your organization is providing any of the services outlined in the report.

Questions or Comments?