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The OIG Issues a Work Plan for 2013

Posted By Administration, Wednesday, October 17, 2012

On October 2, 2012, the Office of Inspector General for the Department of Health and Human Services released an outline of planned efforts and investigations for year 2013. A summary of some of the topics included in the 2012 plan, which ISIS members may find of interest, is provided below. To review the full Work Plan you may visit:

Additionally, on October 24, 2012 the OIG will launch a webcast – which will remain on their website for viewing at any time. A roughly 30 minute program on emerging trends in combating fraud, waste and abuse and priorities for 2013. To obtain more information on the program please visit:

Summary of selected topics in the 2013 OIG Work Plan:

• Electrodiagnostic Testing—Questionable Billing

Review of Medicare claims data to identify questionable billing for electrodiagnostic testing and determine the extent to which Medicare utilization rates differ by provider specialty, diagnosis, and geographic area for these services.

• Diagnostic Radiology—Medical Necessity of High-Cost Tests

Review Medicare payments for high-cost diagnostic radiology tests to determine whether they were medically necessary and the extent to which the same diagnostic tests are ordered for a beneficiary by primary care physicians and physician specialists for the same treatment

• Physicians—Error Rate for Incident-To Services Performed by Nonphysicians

Review physician billing for "incident-to” services to determine whether payment for such services had a higher error rate than that for non-incident-to services. The OIG will also assess Medicare’s ability to monitor services billed as "incident-to.” Medicare Part B pays for certain services billed by physicians that are performed by nonphysicians incident to a physician office visit.

A 2009 OIG review found that when Medicare allowed physicians’ billings for more than 24 hours of services in a day, half of the services were not performed by a physician. Uqualified nonphysicians performed 21 percent of the services that physicians did not personally perform. Incident-to services are a program vulnerability in that they do not appear in claims data and can be identified only by reviewing the medical record. They may also be vulnerable to overutilization and expose beneficiaries to care that does not meet professional standards of quality.

• Physicians - Place-of-Service Coding Errors

Review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. Federal regulations provide for different levels of payments to physicians depending on where services are performed. Medicare pays a physician a higher amount when a service is performed in a nonfacility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ambulatory surgical center.

• Evaluation and Management Services—Potentially Inappropriate Payments Determine the extent to which CMS made potentially inappropriate payments for E/M services in 2010 and the consistency of E/M medical review determinations.

Review multiple E/M services for the same providers and beneficiaries to identify electronic health records (EHR) documentation practices associated with potentially improper payments. Medicare contractors have noted an increased frequency of medical records with identical documentation across services.

• Off-Label Use of Medicare Part B Drugs

Review off-label and off-compendia use of certain Medicare Part B prescription drugs and determine the extent to which specified compendia provide support for coverage. Identify CMS oversight mechanisms related to off-label use of drugs.

For prescription drugs to be covered, Federal law generally requires that they be prescribed according to medically accepted indications, such as those approved by the Food and Drug Administration (FDA) or supported in one or more of the authoritative drug compendia identified by the Secretary of Health and Human Services (HHS). Therefore, most drugs are covered when used off-label as long as one of the designated compendia has determined that there is sufficient evidence that the drug is safe and effective for treating the condition.

• Physicians’ and Hospitals’ Experiences With Drug Shortages

Determine the extent to which hospitals report drug shortages. Determine the extent to which physicians/providers of selected Part B-covered drugs in short supply report difficulty acquiring those drugs.

During shortages, physicians/hospitals may have to ration their supplies of certain drugs; delay treatments; use different drugs, which may be less effective; or resort to potentially untrustworthy sources to acquire drugs. The OIG states it will ask providers to describe their behavior when facing a drug shortage as well as any effect on pricing, quality of care, and market availability.

• Manufacturer Sales of Prescription Drugs in Short Supply

Quantify the effect of drug shortages on manufacturer sales. According to FDA, a record number of drugs were in short supply in 2010 and the number of drug shortages continued to grow in 2011. The OIG will also use data from CMS to determine the extent to which demand and average sales prices of drugs changed when the drugs were reportedly in shortage. For any drug that did not show substantial decline in unit during the shortage quarter, the OIG will analyze Part B claims data to determine whether there was an increase in Part B utilization during that period.

• FDA—Oversight of Wholesale Prescription Drug Distributors

Assess the adequacy of FDA’s oversight of wholesale prescription drug distributors and determine the extent to which FDA ensures that States are licensing wholesalers according to applicable State and Federal laws. All drug wholesalers must be licensed under State licensing systems, which must in turn meet the FDA guidelines.

• Local Coverage Determinations—Impact on Physician Fee Schedule, Services, and Expenditures

Determine to what extent Part B services and items paid under the Medicare Physician Fee Schedule are affected by Local Coverage Determinations (LCD) and the variation in coverage of these services and items as a result. The OIG will also assess CMS’s efforts to evaluate and adopt new LCDs for national coverage as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).

Medicare delegates the establishment of LCDs to third-party contractors. A contractor may establish an LCD to enforce its decision about whether a particular item or service is considered reasonable and necessary and is therefore covered under Medicare. These coverage decisions are not national, meaning Medicare could pay for a service for a beneficiary in one location, but deny payment for that service to a beneficiary elsewhere.

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