2014 OIG Work Plan Released and 2 Midnight Rule

2 Midnight Rule Enforcement Delay

On Friday, the Centers for Medicare & Medicaid Services (CMS) announced that they will delay auditing and enforcement of the 2 midnight rule until after September 30, 2014.  This will allow the agency time to continue to review the impact of the rule, issue additional guidance and allow hospitals additional time to implement changes to their policies, procedures and processes in order to comply with the rule.

To read this announcement in its entirety, click on this link: http://cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/InpatientHospitalReviews.html

OIG FY 2014 Work Plan

Also on Friday, the Office of Inspector General (OIG) published the fiscal year 2014 Work Plan which describes activities that the OIG plans to initiate or continue with respect to the U.S. Department of Health and Human Services (HHS) programs for the current fiscal year.

Below is a summary of the new activities and recurring issues for hospitals and physicians.


For hospitals, the OIG plans to initiate the following new activities:

  • New inpatient admission criteria – Determine the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary payments.  This review will also determine how billing varied among hospitals in FY 2014.
  • Medicare costs associated with defective medical devices – Review Medicare claims to identify the costs resulting from additional utilization of medical services associated with defective medical devices and determine the impact on the Medicare Trust Fund.
  • Comparison of provider-based and free-standing clinics – Review and compare Medicare payments for physician office visits in provider-based and free-standing clinics to determine the difference in payments for similar procedures.  The OIG will also assess the potential impact of hospitals’ claiming provider-based status on the Medicare program.
  • Outpatient evaluation and management (E/M) services billed at the new-patient rate – Review Medicare outpatient payments made to hospitals for E/M clinic visits billed at the new-patient rate to determine whether they were appropriate and recommend recovery of overpayments.
  • Nationwide review of cardiac catheterization and heart biopsies – Review Medicare payments for right heart catheterizations (RHC) and heart biopsies billed during the same operative session and determine if hospitals complied with Medicare billing requirements.
  • Payments for patients diagnosed with Kwashiorkor – Review Medicare payments made to hospitals for claims that include a Kwashiorkor diagnosis to determine whether the diagnosis is adequately supported by medical record documentation.
  • Bone marrow or stem cell transplants – Review Medicare payments made to hospitals for bone marrow or stem cell transplants to determine whether they were paid in accordance with Federal rules and regulations.
  • Oversight of hospital privileging – Determine how hospitals assess medical staff candidates prior to granting initial privileges, including verification of credentials and review of the National Practitioner Databank.

The OIG plans to continue the following activities for hospitals:

  • Impact of provider-based status on Medicare billing – Determine the impact of subordinate facilities in hospitals billing Medicare as being hospital-based (provider-based) and the extent these facilities meet CMS’s criteria.
  • Critical access hospitals: Payment policy for swing-bed services – Compare reimbursement for swing-bed services at critical access hospitals (CAHs) to the same level of care obtained at traditional skilled nursing facilities (SNF) to determine whether Medicare could achieve savings through a more cost effective payment methodology.
  • Critical access hospitals: Beneficiary costs for outpatient services – Determine the costs to Medicare beneficiaries for outpatient services received at CAHs.
  • Inpatient and Outpatient Payments to Acute Care Hospitals – Review compliance with billing requirements for payments made to hospitals.
  • Long-term-care hospitals: Billing patterns associated with interrupted stays – Identify readmission patterns in long-term-care hospitals (LTCHs) to determine the extent LTCHs readmit patients after a certain number of days, thereby billing Medicare for higher paying new stays and separate payments instead of for interrupted stays.  The OIG will also determine the extent co-located LTCHs readmit patients from the providers with which they are co-located.
  • Medicare’s Reconciliations of Outlier Payments – The review of CMS’s timely reconciliation of outlier payments will continue.
  • Duplicate Graduate Medical Education Payments – Review data from CMS’s Intern and Resident Information System (IRIS) to determine whether duplicate or excessive graduate medical education (GME) payments have been claimed.
  • Inpatient claims for mechanical ventilation – Review Medicare payments for inpatient hospital claims with certain Medicare Severity-Diagnosis Related Group (MS-DRG) assignments that require mechanical ventilation to determine whether hospitals’ DRG assignments and resultant Medicare payments were appropriate.
  • Outpatient Dental Claims – Hospital outpatient payments will continue to be reviewed for compliance with Medicare requirements.


The OIG plans to continue the following activities for physician services:

  • Compliance with Assignment Rules – Review whether providers are complying with assignment rules and determine to what extent beneficiaries are inappropriately billed in excess of amounts allowed by Medicare.
  • Place-of-Service Errors – Review whether payments made to physicians have the proper place-of-service code.
  • E/M Services: Potentially Inappropriate Payments – Review E/M services for inappropriate payments and identify EHR that appears cloned.
  • Part B Imaging Services – Part B imaging services will continue to be reviewed to determine whether the services reflect expenses incurred and whether the utilization rates reflect industry practices.
  • Diagnostic Radiology Services: Excessive Payments – Medical necessity will continue to be reviewed as well as duplicate services.

We recommend Medicare providers review the Work Plan for Fiscal Year 2014 in its entirety.  We also recommend providers conduct proactive audits of the applicable areas identified in the newest work plan.

HC Healthcare Consulting staff includes certified coders, physicians, consultants certified in healthcare compliance and statisticians that are available to provide expert assistance with your Medicare and Medicaid compliance programs.

To read the complete OIG Fiscal Year 2014 Work Plan, please click on the following link:  http://oig.hhs.gov/reports-and-publications/workplan/index.asp

DISCLAIMER:  This post contains only summary information and highlights; it should be read in conjunction with the full article or document provided as a link.  Any advice or recommendations given is general and specific questions should be directed to professional counsel.

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