Key Highlights of the Fiscal Year 2016 OIG Work Plan

Introduction

On November 2, 2015, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its annual Work Plan for Fiscal Year (FY) 2016. The 2016 Work Plan sets forth planned audits and evaluations with indicators for whether the work was in progress at the start of FY 2016, revised for FY 2016, or represents a new project to be implemented in FY 2016 and beyond.

Review of the FY 2016 Work Plan reveals a significant overlap in the OIG’s audits and evaluations for FY 2016 and FY 2015. However, the FY 2016 Work Plan also sets forth a number of new focus areas including: medical device credits; physician referrals and orders of Medicare services and supplies; the Centers for Medicare & Medicaid Services (CMS) management of the ICD-10 implementation; and Medicaid specialty drug pricing and reimbursement. The Work Plan also identifies several areas that have been revised since FY 2015 including: hospice general inpatient care; covered uses for Medicare Part B drugs; review of financial interests reported under the Open Payments Program; and CMS oversight of States’ Medicaid information systems security controls.

The OIG directs a vast majority of its resources toward safeguarding the integrity of the Medicare and Medicaid programs. This brief highlights select new and revised OIG reviews that impact Medicare and Medicaid providers and suppliers. This brief also identifies reviews with expected issue dates beyond FY 2016. Strategic Management selected reviews based on current client practice areas, high risk areas, and new initiatives. The OIG Office of Audit Services (OAS) or the OIG Office of Evaluation and Inspection (OEI) perform the reviews noted below. Health care providers and organizations may use the FY 2016 OIG Work Plan to identify corporate compliance risks, prioritize audit focus areas, and facilitate compliance program activities.

Medicare Part A & Part B

Hospitals

Medicare Oversight of Provider-Based Status (Revised) – Provider-based status allows hospital-owned and operated facilities to bill as hospital outpatient departments. The higher Medicare payments for services furnished at provider-based facilities may increase beneficiaries’ coinsurance liabilities. The Medicare Payment Advisory Commission has expressed concerns regarding the financial incentives related to provider-based status and stated that Medicare should seek to pay similar amounts for similar services. The OEI will determine the number of provider-based facilities that hospitals own and evaluate CMS’s provider-based billing oversight methods. The OEI will further determine whether provider-based facilities meet regulatory requirements[1] and whether any challenges surround the provider-based attestation review process.

Medical Device Credits for Replaced Medical Devices (New) – Medical devices implanted during inpatient or outpatient procedures may require replacement due to defects, recalls, or other complications. Federal regulations[2] require reducing Medicare payments for the replacement of implanted devices. Prior OIG reviews have determined that Medicare Administrative Contractors (MACs) have made improper payments to hospitals for inpatient and outpatient claims for replaced medical devices. The OAS will determine whether Medicare payments for replaced medical devices followed Medicare requirements.