The 2012 OIG Work Plan

Written by on December 5, 2011 in Law & Finance - No comments

By Kimberly Licata

Each year in October, the United States Department of Health and Human Services, Office of the Inspector General (OIG) releases a work plan to identify its priorities for the coming fiscal year. The OIG Work Plan traditionally gives providers valuable insight into arrangements or activities that the OIG believes are sensitive to fraud and abuse. Each year, the OIG Work Plan includes some initiatives from the prior year(s) along with new concerns. Be aware of these initiatives and address applicable initiatives in your compliance program and/or policies and procedures. Further safeguard your practice by seeking appropriate advice if you determine that one or more of these initiatives could affect your practice. The following article briefly summarizes the portions of the FY 2012 Work Plan that affect physicians.

New Initiatives in the FY 2012 Work Plan

High Cumulative Part B Payments: The OIG will review payment systems controls that identify high cumulative Medicare Part B payments to physicians and suppliers to determine whether these controls are in place to identify such payments and assess their effectiveness. The OIG’s prior work has concluded that unusually high Medicare payments may indicate incorrect billing or fraud and abuse.

Physician-Owned Distributors of Spinal Implants: The OIG will determine the extent to which physician-owned distributors (PODs) provide spinal implants purchased by hospitals and whether PODs are associated with high use of spinal implants. The Work Plan notes that Congress has expressed concern that PODs could create conflicts of interest and safety concerns for patients.

Incident-To Services: The OIG will review physician billing for incident-to services to determine whether payment for such services has a higher error rate than that for non-incident-to services. The OIG will assess CMS’s ability to monitor incident-to services. The OIG expresses concern that the incident-to services may be performed by unqualified individuals, may expose beneficiaries to care that does not meet professional standards of quality, and may be vulnerable to overutilization.

Impact of Opting Out of Medicare: Motivated by a growing number of physicians opting out of Medicare, the OIG will review the extent of opting out and determine whether these physicians are submitting claims to Medicare. The OIG will examine whether particular areas of the country have seen higher opt out rates and any potential impact on beneficiaries.

Evaluation and Management Services: Use of Modifiers During the Global Surgery Period: The OIG will review the appropriateness of the use of certain claims modifier codes during the global surgery period and determine whether Medicare payments for claims where modifiers were used during the global surgery period were in compliance with Medicare requirements. Prior OIG review indicates that improper use of modifiers during this time resulted in improper payments for Evaluation and Management (E/M) services that were otherwise included in the global payment.

Physician-Administered Drugs and Biologicals: The OIG launches a new initiative to compare Medicare and Medicaid payments for commonly used physician-administered drugs and biologicals to assess current reimbursement of ASP plus 6 percent and opportunities for savings through changes to Part B.

Continuing Initiatives in the FY 2012 Work Plan

Compliance with Assignment Rules: The OIG remains interested in the extent to which providers comply with assignment rules and the extent to which beneficiaries may be being inappropriately billed in excess of Medicare-allowed amounts.

Place-of-Service Errors: The OIG continues to review physician coding of Medicare Part B claims for services performed in ambulatory surgery centers (ASCs) and hospital outpatient departments to confirm proper place-of-service coding (and associated level of reimbursement).

Evaluation and Management Services: Coding of Claims, During Global Surgery Periods, and Improper Payments: The OIG will continue to review trends in coding of claims for E/M services, including an ongoing initiative relate to E/M services provided during global surgery periods (and therefore, they should be billed and reimbursed as part of the global surgery fee). Last year’s Work Plan included the OIG’s first year of reviewing E/M claims to determine whether coding patterns vary by provider type;  this initiative is continued in 2012. Also new in 2011, and continued in 2012, is the OIG’s review of potentially inappropriate payments for E/M services.

Medicare Payments for Part B Imaging Services: The OIG continues to assess whether Medicare payments for Part B imaging services reflect expenses incurred and whether utilization rates reflect industry practices. The OIG is particularly interested in the practice expense component and equipment utilization rate.

Excessive Payments for Diagnostic Radiology: The OIG continues to review high-cost diagnostic radiology tests to assess medical necessity and to deny payment (or request a refund for overpayment) for the unnecessary tests. The OIG also continues to assess ordering patterns by primary care physicians versus specialists for the same treatment.

Medicare Payments for Sleep Testing and Appropriateness of Medicare Payments for Polysomnography: The OIG continues its interest in the appropriateness of Medicare payments for sleep test procedures, including payments to physicians and independent diagnostic testing facilities for these tests. Unnecessary tests are not covered and subject a provider to refund any overpayment.

Laboratory Part B Payments for Glycated Hemoglobin A1C Tests and Trends in Laboratory Utilization: The OIG continues last year’s initiative into reviewing the number and types of laboratory tests ordered by physicians and examining how physician specialty, diagnosis, and geographic difference in the practice of medicine affect laboratory test ordering.

Comprehensive Outpatient Rehabilitation Facilities (CORFs): The OIG is concerned about “potentially inappropriate” lease arrangements between physician landlords and CORFs. Expect the OIG to perform site visits and reviews of associated arrangements.

Medicare Payments for Part V Claims with G Modifiers: Previously, the OIG investigated use of the GY modifier, and this year, the OIG will review Medicare payments made from 2002 to 2010 for claims on which providers used certain G modifiers that indicate that Medicare denial was expected. The OIG will identify atypically high billers who are using these modifiers. A recent OIG review identified $4 million in potentially inappropriate payments for pressure-reducing support surface claims billed with G modifiers, indicating the provider’s expectation that Medicare would (but did not) deny these claims as not reasonable and necessary.

Payments for Services Ordered or Referred by Excluded Providers: The OIG’s review of payments for services ordered or referred by excluded providers continues. This initiative also examines CMS’s oversight mechanisms to identify and prevent improper payments for services based on orders or referrals by excluded providers.

Error-Prone Providers under Medicare Parts A and B: The OIG will continue to target error-prone providers through reviews of sampled claims submitted by the top error-prone providers to (in)validate claims and request refunds for projected overpayments.

Virtually all physicians are affected by one or more of these initiatives. The government has had tremendous financial success in aggressively pursuing fraud and abuse initiatives. With the changes in health care reform that broaden the government’s power and reduce the level of intent necessary to find a provider has committed fraud and abuse, physicians must make themselves aware of the government’s plans. Assess your current practices to determine whether these are reasonable and sufficient to protect against the OIG’s concerns. Remember these are the areas that the OIG sees as easy targets for recouping valuable cash and overpayments from providers. You never want to be an easy target when prevention is a phone call (or policy review) away!

Editor’s Note: Ms. Licata is an attorney at Poyner Spruill, who practices health law and participates on the Firm’s Emerging Technologies and Privacy and Information Security teams. These comments are not intended to establish an attorney-client relationship and are not intended to be legal advice.

Kim Licata
is an attorney practicing in the Health Law Section of Poyner Spruill, LLP. She focuses her practice on providing regulatory, compliance, and litigation advice to health care providers from the perspective of a former in-house counsel and business person. She may be reached at and (919) 783-2949.


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