What Can Providers Expect by Andrew Wachler

On October 1, 2007, the Department of Health and Human Services (HHS) Office of Inspector
General (OIG) issued its 2008 annual Work Plan, which outlines the key focus areas and projects the
OIG intends to pursue during the 2008 fiscal year (FY 2008). The OIG Work Plan is available in its
entirety from the OIG website.
Approximately 80 percent of the OIGs resources are devoted to projects within the Medicare and
Medicaid programs. These projects include audits, evaluations, investigations, and legal activities.
This article will highlight a few of the areas within the Medicare and Medicaid programs that the
OIG identified as focus areas for FY 2008. Physicians and other healthcare providers and suppliers
providing services billed to Medicare and Medicaid are well-advised to review the sections of the
Work Plan applicable to the services they provide, and review their existing compliance efforts, in
the context of anticipated OIG activity for the upcoming year.
Although the 2008 Work Plan outlines the OIGs intended areas of activity for the fiscal year ahead,
the OIG also has noted that work planning is a dynamic process that continues after the publication
of its annual Work Plan. Thus, after analyzing current events and emerging issues as they arise, the
OIG may add new activities or cancel or delay planned activities, as it deems appropriate. At the
time of the Work Plans publication in October 2007, the OIG announced that it would focus on the
following issues related to Medicare and Medicaid, among others, during FY 2008:
A. Medicare
1. Hospitals
As in previous annual Work Plans, the OIG outlined several areas of focus and initiatives it has
planned for FY 2008 regarding Medicare payments made to hospitals.
New in the 2008 Work Plan, the OIG articulated heightened interest in Medicare payments made to
long-term care hospitals. Accordingly, long-term care hospitals may see increased investigations and
audit activity during FY 2008. The OIG enumerated multiple areas of focus with respect to these
hospitals.
Also in FY 2008, the OIG will review physician-owned specialty hospitals for indicators of patient
care and safety. The OIG cited concerns raised about the appropriateness of care and about whether
staffing levels were appropriate at specialty hospitals.
2. Home Health Agencies
The OIG will review national data collected regarding home health agencies survey and certification
findings, particularly with respect to any findings of deficiency. The OIG will consider whether
agencies with a history of noncompliance with certification standards perform differently during
cyclical survey and certification than agencies without a history of noncompliance with certification
standards. This analysis will be conducted in an effort to determine whether sanctions are effective
when placed upon agencies with findings of deficiencies.
The OIG will also consider whether services billed by home health agencies were appropriately
coded, fully documented, and properly billed.

3. Nursing Homes and Hospice

The OIG plans to review hospice services provided to Medicare beneficiaries who reside in nursing
facilities and assess the appropriateness of payments for hospice care for these services.
4. Physicians and Other Health Professionals
The 2008 Work Plan includes several areas of focus regarding Medicare services billed by physicians
and other health professionals. These areas of focus include, but are not limited to, the areas listed
below. Notably, diagnostic testing is a significant area of focus for the OIG in FY 2008, as evidenced
by numerous projects identified in these areas:
Place of service billing errors
E/M services billed during global surgery periods
Selected physician services
Services billed incident to
Psychiatric services
Services performed by clinical social workers
Polysomnography services
Pain Management services
High-frequency chiropractic treatments
Business relationships and MRI
Geographic areas with a high-frequency of ultrasound services
Geographic areas with a high-density of IDTFs
Medicare reassignment rules
5. Durable Medical Equipment
As in previous years, the OIG identified multiple focus areas regarding Medicare payments for
durable medical equipment supplies. The multiple areas of focus outlined by the 2008 OIG Work
Plan demonstrate that durable medical equipment suppliers remain subject to high-scrutiny by the
OIG, and thus these suppliers must be highly vigilant about compliance with Medicare and Medicaid
regulations and policy.
6. Part B Drug Reimbursement
The OIG will review Medicare Part B drug reimbursement. Among other topics, the OIG will review
drug manufacturers methodologies for computing the average sales price for Part B medications,
and will assess manufacturers compliance with the statutory requirements for determining the

average sales price of these medications.

7. Medicare Part D Administration
The OIG will continue to monitor the administration of the Medicare prescription drug benefit in
2008. Among other areas of focus, the OIG will consider the following:
* Whether duplicative claims have been made for medications (e.g. whether claims submitted under
Medicare Part D were also submitted under Part A or B);
* Whether employer controls for the Retirement Drug Subsidy (RDS) program are sufficient;
* Whether CMS methodology for reviewing and approving Medicare Part D sponsor bids is
appropriate; and
* Whether sponsors compliance programs are effective and compliant with federal regulations. The
OIG cited a previous report finding that some sponsors compliance plans did not address all of the
required elements concerning fraud.
8. Medicare Cross-Cutting Issues
As mandated by the Tax Relief and Health Care Act of 2006, section 203, the OIG plans to conduct a
series of studies of serious medical errors, known as never events. The OIG will study the incidence,
facility response, and payments associated with these events. The studies will include an evaluation
of medical error reporting and provider response, as well as other targeted studies.
B. Medicaid
In FY 2008, the OIG will also focus its attention upon various aspects of Medicaid payments. Among
other areas of focus, the OIG will consider all of the following:
Medicaid payments made to hospitals
Medicaid long-term and community care
Medicaid mental health services
Other Medicaid services
Medicaid State Childrens Health Insurance Program (SCHIP)
Medicaid administration
TOP MANAGEMENT AND PERFORMANCE CHALLENGES
Recently, the OIG acknowledged that many projects on which it intends to focus in FY 2008 pose
management and performance challenges that must be addressed with novel strategies, in addition
to the current management strategies the Department of Health and Human Services (HHS) has
implemented. The OIG published a publication, Top Management and Performance Challenges,
which is available from OIGs website, and outlines these management challenges and the steps the
OIG is taking to address these challenges.

The management challenges specified by the OIG include all of the following:
Oversight of Medicare Part D
Integrity of Medicare Payments
Appropriateness of Medicaid and SCHIP Payments
Medicaid Administration
Quality of Care
Public Health Emergency Preparedness and Response
Oversight of Food, Drug, and Medical Device Safety
Grants Management
Integrity of Information Technology Systems and Infrastructure; and
Ethics Program Oversight and Management

Notably, Medicare providers and suppliers practicing in the areas listed above should be aware that
there is even more governmental scrutiny on these areas than on other areas outlined in the 2008
Work Plan. The OIG is actively taking steps to address these perceived risk and management
challenges.