Updates to the 2016 OIG Work Plan

Did You Receive an OCR Notice for the Phase 2 Audit? What’s Next?
Exposed: National Health Care Fraud Takedown 2016

Fighting fraud, waste and abuse continues to be the focus of the Department of Health and Human Services (HHS) and the Office of the Inspector General (OIG). Almost 80 percent of HHS’ budget is spent on Medicare, Medicaid and CHIP totaling near $985 M for FY 2015.   The ongoing goal for Center for Medicare and Medicaid Services (CMS) is to achieve an accurate and appropriate Medicare payment system and to increase the efficiency of identification and recovery of improper payments.  The mid- year update of the 2016 OIG Work Plan includes all of the current updates, revisions and deletions.  Future changes will include oversight of hospice care, certification surveys and hospice-worker licensure requirements, skilled nursing facilities’ compliance with patient admission requirements and evaluation of CMS’ Fraud Prevention System.

One notable deletion from the mid-year update is the removal of the OIG’s evaluation of the Office of Civil Rights for the adequacy of oversight of the covered entities and business associates regarding protection of electronic PHI.  Let this serve as a warning that the OCR HIPAA Phase 2 audits are underway using the revised OCR comprehensive audit protocols.


Highlights of the OIG’s new and revised updates for hospitals, providers, nursing homes and home health are as follows:


HOSPITALS- New and Revised Updates:

  • Outpatient Outlier Payments for Short-Stay Claims

The OIG will address excessive outpatient patient outlier payments which are a result of hospital outpatient services which allow access to care by beneficiaries that may otherwise not be available but exceed normal Medicare payments.  The goal of these outlier payments is to help the providers who accept these unusually expensive cases but the OIG will examine any unnecessarily inflated charges by the hospital that are not cost-based.

  • Intensity-Modulated Radiation Therapy

The OIG will review outpatient payments for IMRT services specifically identifying services that should not be billed if part of  developing the IMRT plan.

  • Medicare Oversight of Provider Based Status

The OIG will examine the provider–based status for hospital owned provider-based facilities that are billing as hospital outpatient departments.  This status can result in higher payments for similar services which also affects the beneficiaries’ costs. The Medicare Payment Advisory Commission is recommending that the same Medicare payments should be made for similar services.

  • Analysis of Salaries Included in Hospital Cost Reports

Currently, there are no limits on salaries that can be included in hospital cost reports. The OIG will analyze the salary amounts attributed to overall operating costs and determine possible areas of cost savings.



  • Skilled Nursing Facility Prospective Payment System Requirements

The OIG will assess compliance with the prospective payment system requirement for SNF eligibility which requires a 3-day inpatient hospital stay within 30 days of the SNF admission.

  • Potentially Avoidable Hospitalizations of Medicare and Medicaid Eligible Nursing Home

The OIG will review nursing homes for prevention, detection and management of urinary tract infections (UTIs). The goal is to avoid costs of unnecessary hospitalizations for UTI treatment  which is a similar payment adjustment approach that is currently in place for costs related to hospital acquired catheter UTI.

  • National Background Check Program for Long-Term-Care Employees

For those participating States, the OIG will examine the procedures as well as the outcomes for background checks on prospective employees or providers for long-term-care facilities or providers .


HOME HEALTH- New and Revised Updates:

  • Medicare Home Health Fraud Indicators

Due to a long history of fraud, waste and abuse in Home Health, the OIG is  identifying risk areas in billing by looking back at CY 2014 and CY 2015.

  • Oversight and Effectiveness of Medicaid Waivers

With the increase in State Medicaid waivers, the OIG will review the use, efficiency and effect on Federal costs for the  State Medicaid waiver programs

  • Home Health Prospective Payment System Requirements

Billing for home health has been highly scrutinized since the OIG determined 1 in 4 Home Health Agencies (HHAs) had billing errors which have attributed to the $1B in Medicare overpayments since 2010.  New HHAs are designated as high risk by CMS.   The documentation supporting claims paid by Medicare will be evaluated for part-time or intermittent skilled nursing care, other skilled care services such as physical, occupational, and speech therapy, medical social work and home health aide services.



  • CMS’ Implementation of New Medicare Payment System for Clinical Diagnostic Laboratory Tests – Mandatory Review

CMS is replacing the Medicare Part B payment system for diagnostic laboratory tests with a market-based approach that uses rates paid to laboratories by private payers. The OIG will assess the implementation and effect of the new system

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