Two Important OIG Work Plan Updates in September 2023

While the OIG didn’t add a high number of items to its Work Plan in September 2023, the updates it did make are critical.

Diagnosis Coding Audits

Earlier this year, the Inspector General Christi Grimm highlighted the OIG’s concern with upcoding in Medicare Part C. She stated, “Conduct related to the Medicare Advantage risk adjustment program raises significant concerns for patients and providers, and for the financial integrity of Medicare.” In simpler terms, she said, “…the financial incentives created by risk adjustment may be driving upcoding in the severity of diagnoses to garner additional payments.”

With this backdrop in mind, the OIG added a Work Plan item in September that outlines their intention to audit Medicare Part C unlinked chart review diagnosis codes.

Medicare Advantage (MA) organizations are required under 42 CFR § 422.310(b) to “…submit to CMS (in accordance with CMS instructions) the data necessary to characterize the context and purposes of each item and service provided to a Medicare enrollee by a provider, supplier, physician, or other practitioner.”

CMS instructions permit MA organizations to perform chart reviews of enrollee medical records to identify diagnosis codes that providers either did not originally submit to the MA organization or erroneously provided to the MA organization. There are some chart reviews known as unlinked chart reviews. For these types of reviews, CMS does not require an MA organization to identify the specific date of service for the previously unreported diagnosis codes.

Miscoded diagnosis codes could cause CMS to inappropriately pay MA organizations.

Because of the potential for overpayment, the OIG plans to audit these unlinked chart reviews. They plan to focus their efforts on enrollees who had diagnoses identified from unlinked chart reviews that resulted in increased risk-adjusted payments from CMS to MA organizations. The OIG will determine if these diagnosis codes used in the risk adjustment programs followed the requirements necessary for the payments received.

Recall the July 2023 updates we shared recently (https://www.healthicity.com/blog/5-new-oig-work-plan-items-added-july-2023). There were three Work Plan items added at that time related to diagnosis coding and Medicare Advantage.

With this new September Pork plan item, it appears the words Ms. Grimm shared are ringing true about all those participating in Medicare Advantage:

“As managed care continues to grow and the associated dollars get larger, providers may be offered new ways to partner with plans to increase revenue in ways that did not exist under a fee-for-service system. When assessing those new options, know that scrutiny in managed care does not end at the doors of insurance companies. Organizations that do business with managed care plans should be adapting compliance programs to reflect the growth of managed care in Medicare and Medicaid.”

Durable Medical Equipment, Prosthetics, Orthotics, and Supplies

DMEPOS, or Durable Medical Equipment, Prosthetics, Orthotics, and Supplies is a sub-industry in healthcare that has seen its share of compliance issues. In fact, the OIG has published a compliance program guidance document just for this sector of healthcare (https://oig.hhs.gov/documents/compliance-guidance/804/frdme.pdf).

Many years ago, Congress mandated a competitive bidding program for DMEPOS through passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The statute requires that Medicare replace the current fee schedule payment methodology for selected DMEPOS items with a competitive bid process. The competitive bidding process is administered by CMS (https://www.cms.gov/medicare/payment/fee-schedules/dmepos-competitive-bidding). Under law, the OIG is required to assess the way in which CMS conducts the process and the subsequent pricing determinations.

This OIG Work Plan item announces the OIG’s intent to review the process used by CMS to conduct competitive bidding and to make subsequent pricing determinations during round 2021 of the competitive bidding program.

The OIG has done similar work in the past. To see an example of prior results, see the following report https://oig.hhs.gov/oas/reports/region5/51600051.asp.

Conclusion

Compliance programs are best served when they regularly review the OIG Work Plan and adjust their own program’s work accordingly.

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