8 New Items on the OIG 2013 Work Plan to Impact Acute Care Hospitals

The Office of the Inspector General (OIG) released its fiscal year 2013 Work Plan, last month, in which it listed a number of new items it will be pursuing.  These new items appear to be specifically targeted to reducing the amount the Centers for Medicare and Medicaid Services (CMS) will have to pay for services provided to beneficiaries in acute care hospitals, and to practices claiming Provider-Based status.

The OIG 2013 Work Plan

1. As an overall approach, the OIG will be planning to look at how different types of hospitals had different billing for patient stays, and whether or not they were in compliance with the CMS requirements for in-patient billing as revised in 2008.
2. The OIG will also be looking at recommending that the DRG window for the In-Patient Prospective Payment System (IPPS) be extended from the current 3 days prior to admission to 14 days.  It is projected that the CMS could realize a substantial savings by bundling all the out-patient services provided up to 14 days prior to admission into the in-patient DRG payment.
3. Another new area that the OIG will be looking at is that of billing a patient discharge when, in fact, the billing should have been for a transfer.
4. Along this same vein, they will now also be looking at transfers to a swing bed unit in another hospital, especially since those beds do, in fact, swing back and forth between acute and non-acute status.
5. Billing for cancelled surgical procedures is another new item the OIG will be looking at. It appears that there have been many instances in which a patient has been admitted for a surgical procedure which was then cancelled and a subsequent procedure was billed at a higher rate along with the bill for a cancelled surgery.
6. The OIG will also be reviewing Medicare payments for mechanical ventilation to assure that the beneficiaries actually received mechanical ventilation for 96 or more hours to qualify for specific DRG payments.
7. Another new item the OIG will be looking at is more addressed to physician practices than to hospitals, but is listed under the Hospital section.  Specifically they will be looking at Medicare payments to non-hospital owned practices that billed services using the higher paying provider-based status which allows a sub-ordinate facility to bill as an extension of the hospital itself.
8. Finally, the OIG will now start looking at the billing practices of hospitals that acquired ambulatory surgery centers (ASCs) and converted them to higher paying hospital out-patient departments.

In addition to the above new items that relate specifically to savings on payments to acute care hospitals there are others that address issues with quality improvement organizations working with hospitals, critical access hospitals, long term hospitals, rehabilitation units, hospice and nursing homes.

The financial impact of the OIG’s 2013 Work Plan looks to be far reaching and potentially very detrimental to the way hospitals are being reimbursed.

Staying Informed

Many aspects of how medical care is regulated is going through a major overhaul, and hospitals and medical clinics should be paying close attention. Audits are being conducted with intense scrutiny in an effort to eliminate fraud and improve the delivery of health care services. Much of the need to do this has arisen from recent issues such as hospitals being overpaid for patient care, leading to a fractured and unreliable system. To smooth out the kinks, HHS’ Office of Inspector General (OIG) has created a work plan for 2013 that details a strict set of standards that are expected to be upheld. To ensure your organization passes an audit with flying colors, it is vital that you understand what rocks the OIG will be looking under.

Part of the reason for 2013’s OIG work plan has been so beefed up is from suspicions that hospitals are being overpaid for patients who are readmitted to their facility on the same day they were released, or patients who are discharged to other facilities. The post discharge process utilized by hospitals that are being evaluated will be considered to determine accurate billing is being done; 100 investigators have been tasked with the job. Another thing the OIG is looking into is bundling payments together for services received within a 14 day time period prior to patient admission. This would lower fees significantly, and could therefore impact revenue as a result – a factor the OIG is considering.

The workplan for 2013 will also include generalized information on how hospital inpatient billing practices have changed since 2008. The investigations will also extend to Recovery Audit Contractors (RACs) to make sure the results on their reports make sense and are fair. And the OIG is hoping to lower the number of Medicare patients that are readmitted within 30 days from 18% to 10%.

Improvements for All

While the OIG’s work plan may cause a lot of providers to feel as though they’re walking on egg shells, the point is essentially meant to improve the medical industry as a whole. The goal is to encourage physicians to perform the highest quality of care while remaining compliant and receiving the greatest return for treatments provided. Ultimately, the integrity and trust in the medical system will be improved – a major pro, no matter what side of the fence you’re on.

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