Office of the Inspector General Releases Work Plan for FY 2011

October 7, 2010

The Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) recently released its General Work Plan for FY 2011, which offers descriptions of activities that OIG intends to begin or continue with respect to HHS programs and operations in FY 2011. This Work Plan provides the areas where OIG plans to generally focus its investigative, enforcement and compliance activities in the coming year.

Areas of the plan that McGuireWoods has identified as of particular interest to hospitals, long-term care providers, ambulatory surgery centers, dialysis facilities, durable medical equipment suppliers, and pharmaceutical companies are set forth below.


First, OIG states that it intends to review cost reports of hospitals that claim provider-based status for their inpatient and outpatient facilities, to determine whether such a designation is appropriate and the impact of inappropriately claiming this status. In addition, OIG plans to review high-payment Medicare claims to ascertain whether they were appropriate, since such claims may be incorrect for some reason.

This examination will include outpatient claims where payments surpassed charges and certain Healthcare Common Procedure Coding System codes with unusual billing. Also, OIG will review Centers for Medicare and Medicaid Services (CMS) data to find out whether teaching hospitals made duplicate claims for graduate medical education payments. Finally, OIG intends to review Medicare payments made for beneficiaries with another form of insurance, since Medicare should only be a secondary insurer in such a situation.

Home Health Agencies (HHA) & Nursing Facilities

OIG plans on reviewing Medicare Part B service and medical supply payments for beneficiaries’ home healthcare to limit inappropriate payments to outside suppliers. Most such services and supplies are included in the HHA prospective payment, and when provided under an HHA plan of care, payments for outside suppliers are included in the prospective payment. Additionally, OIG intends to review HHA conformity with various pieces of the home health prospective payment system, and analyze trends in HHA activities because total payments to HHAs have grown significantly between 2000 and 2008.

Other Providers & Suppliers

First, OIG intends to examine changes made to the revised ambulatory surgery center (ASC) payment system and the method used to calculate ASC payment rates. Also, OIG plans to review whether CMS has made inappropriate payments for evaluation and management (E&M) services. CMS instructs that the code for service should be based on the content of the service, and proper documentation should support the code used, but some documentation has been identical across services.

Additionally, CMS only pays for services that are reasonable and necessary to diagnose and treat an illness or injury, so OIG intends to review whether Medicare payments for sleep test procedures conducted at sleep disorder clinics were appropriate and met Medicare requirements. Further, OIG will review to what degree Medicare payments are being made for services ordered or referred by excluded providers. Finally, the Social Security Act limits Medicare coverage for end stage renal disease (ERSD) beneficiaries who receive coverage due to special circumstances. OIG intends to review claims for these beneficiaries to determine to what extent they continue to receive Medicare benefits after their coverage should have terminated.

Medical Equipment & Supplies

OIG intends to review the correctness of payments by Medicare Part B for various types of durable medical equipment (DME) by isolating high-volume claim DME suppliers to establish whether payments were proper.

Medicare Part A & Part B Contractor Operations

The Recovery Audit Contractor (RAC) program, which attempts to discover and recover Medicare overpayments, will undergo review by the OIG.

If you have any questions about the OIG’s Work Plan or the areas where OIG plans to generally focus its investigative, enforcement and compliance activities in the coming year, please contact one of the authors or a member of McGuireWoods’ Healthcare Team.