On November 2, HHS OIG released its FY 2016 Work Plan.  The Work Plan summarizes new and ongoing OIG reviews with respect to HHS programs and operations, providing an advance notice to the industry, policymakers, and the public regarding OIG’s activities.  The Work Plan includes several new and revised initiatives focused on the activities of providers, drug and device manufacturers, insurance carriers, the states, and CMS.  Among its new initiatives, OIG announced that it will review payments to hospitals for replaced medical devices, examine claims from skilled nursing facilities (SNFs) for compliance with documentation requirements, and review outpatient claims for services provided during inpatient stays.

OIG announced the following new initiatives pertaining to hospitals, nursing homes, and hospices:

• Medical device credits for replaced medical devices—OIG will determine whether Medicare payments for replaced medical devices were made in accordance with Medicare requirements.  Under Medicare regulations, payment is reduced for devices replaced due to defects, recalls, and mechanical complications.
• Medicare payments during MS-DRG payment window—OIG will review Medicare payments to acute care hospitals to determine whether certain outpatient claims billed to Medicare Part B for services provided during inpatient stays were allowable. 
• SNF prospective payment system requirements—OIG will review compliance with applicable federal laws and various aspects of the SNF prospective payment system, including the documentation requirement in support of the claims paid by Medicare.  OIG has previously concluded that SNFs increasingly billed for the highest level of therapy even though key beneficiary characteristics remained largely the same. 
• Accountable care organizations: strategies and promising practices—OIG will review accountable care organizations that participate in the Medicare Shared Savings Program, and describe their performance with respect to quality measures and cost savings. 

OIG also announced revisions to the following initiatives pertaining to hospitals, nursing homes, and hospices:

• Medicare oversight of provider-based status—OIG previously announced that it would “determine the extent to which provider-based facilities meet CMS’s criteria.”  In the FY 2016 Work Plan, OIG specified that it would also determine the number of provider-based facilities that hospitals own, the extent to which CMS has methods to oversee provider-based billing, and whether there were any challenges associated with the provider-based attestation review process. 
• Hospice general inpatient care—OIG previously announced that it would assess the appropriateness of hospices’ inpatient care claims and the content of patients’ election statements, including a review of medical records to address concerns of the misuse of hospice inpatient level of care.  In the FY 2016 Work Plan, OIG elaborated that it will review beneficiaries’ plans of care and determine whether they meet key requirements.  
• Review of financial interests reported under the Open Payments Program—OIG previously announced that it would determine the number and nature of financial interests reported under the Open Payments Program, including whether the required data for physician and teaching hospital payments are accurately and completely displayed on the public website.  In the FY 2016 Work Plan, OIG clarified that it will examine whether these data are valid.

Additionally, OIG announced several new initiatives focused on other types of healthcare suppliers.  OIG will: 

• Review whether physicians and non-physician practitioners who ordered or referred services, supplies, and durable medical equipment were legally eligible to do so. 
• Examine whether anesthesia services filed on Part B claims were provided in connection with a related Medicare service. 
• Assess whether Medicare payments to physicians for evaluation and management (E/M) services during home visits were reasonable and made in accordance with Medicare requirements.  OIG will also examine payments for prolonged E/M services for compliance with Medicare requirements. 
• Examine payments to histocompatibility laboratories. 
• Investigate whether the quality of ambulatory surgical centers is adequately assessed and made available to the public. 

The Work Plan includes several new and revised initiatives examining states’ and CMS’s oversight of healthcare providers.  As new initiatives, OIG will examine whether state survey agencies verified correction plans for deficiencies identified during nursing home recertification surveys, and the extent to which CMS validates hospital inpatient quality reporting data.  OIG also announced revisions to three initiatives: one investigating the collection and verification of provider ownership information by the states and CMS; another reviewing states’ experiences with enhanced provider screening; and a third reviewing payment suspensions by states during pending investigations of credible fraud allegations. 

In addition to initiatives aimed at healthcare providers, the states, and CMS, the Work Plan contains initiatives aimed at drug manufacturers and insurance carriers.  OIG usually publishes a mid-year update to its annual work plan in May.

Reporter, Igor Gorlach, Houston TX, +1 713 276 7326, igorlach@kslaw.com.