The OIG issued its work plan for 2015

By Sumita Saxena, Senior Consultant, The Verden Group

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) released its Work Plan for Fiscal Year 2015 on October 31, 2014. The work plan offers an annual perspective regarding the OIG’s planned areas of focus for investigation and enforcement activities in the coming year.

Below are a few notable areas of interest from this year’s work plan. The work plan contains many other areas under review and is a worthwhile read to understand specific concerns in areas not highlighted in this post.

Hospital Inpatient Admission Criteria – “Two Midnight Rule”

The OIG intends to review the impact of new inpatient admission criteria on hospital billing, Medicare payments and beneficiary copayments. Specifically, OIG will review how billing varied among hospitals in the 2014 fiscal year. The new inpatient admission criteria went into effect in fiscal year 2014, after the OIG identified millions of dollars of overpayments to hospitals for short inpatient stays that should have been billed as outpatient stays. The new inpatient admission criteria state that physicians should admit for inpatient care only those beneficiaries who are expected to need at least two nights of hospital care (the “two midnight” rule). Beneficiaries requiring care that is expected to last fewer than two nights should be treated as outpatients. The OIG is expected to issue a report in 2016 regarding the impact of the new inpatient admission criteria on hospital billing.

Provider-Based Facilities

The OIG will continue in its focus on provider-based facilities as set forth in its 2014 work plan. Provider-based facilities are hospital outpatient departments and are often located off-campus. The facilities tend to be paid more than freestanding clinics are for similar Medicare services, to account for the generally higher levels of overhead and infrastructure necessary to qualify as a hospital-based facility. Unlike at physician practice clinics, services at a provider-based facility are reimbursed for both a technical fee (for the hospital) and a professional fee (for the physician). The OIG will continue to review the extent to which provider-based facilities meet the provider-based criteria set by the Centers for Medicare and Medicaid Services (CMS). Also, the OIG plans to continue to review and compare Medicare payments for physician office visits in provider-based facilities and freestanding clinics to determine the potential impact on the Medicare program of these different payments and whether they are justified.

Outpatient Evaluation and Management (E&M) Codes

The OIG will review Medicare outpatient payments for E&M services to determine whether such services were correctly coded as “new” or “established.” The OIG stated that preliminary work indicates that overpayments have occurred as a result of hospitals indicating that a patient was “new” when the patient should have been coded as “established” under the federal regulations. Federal regulations distinguish between “new” and “established” patients based on whether the patient has been seen as a registered inpatient or outpatient of the hospital within the preceding three years.

Protected Health Information

The fiscal year 2015 work plan affirms that the OIG will continue to concentrate a great deal of their enforcement efforts on the security and vulnerabilities of protected health information (PHI) contained in electronic health records (EHR). The continued scrutiny of data security housed in EHRs is consistent with the goals of the OIG Strategic Plan 2014-2018, where the OIG identified EHRs as one of its key focus areas until at least 2018.

The 2015 work plan is available to download on the OIG’s website:

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