BY CINDY SANDERS

Elizabeth Warren

Each year, the Office of Inspector General (OIG) of the Department of Health and Human Services outlines its 12-month plan of action to improve the efficiency and effectiveness of federal healthcare programs. The Work Plan, which covers a range of federal health programming, targets items that are considered vulnerable to fraud and abuse, thus signaling potential areas of investigation.

Within the purview of the Medicare program, several red flags should serve as a warning to providers and administrators to review their policies and make sure their facilities are within the letter of the law.

Elizabeth Warren, a law partner affiliated with the Healthcare Industry Practice Area of Bass, Berry & Sims PLC — which has offices in Knoxville, Memphis and Nashville — outlined some of the key areas of interest for hospitals, long-term care providers and practices.

Warren noted that the OIG releases a plan such as this every year and that there was no indication the oversight organization was stepping up what it normally does. While the plan appears to be "business as usual," Warren did add that it should still serve as a road map to providers to help them avoid pitfalls in the coming year.

For hospitals, Warren said an area of interest for 2007 would be how rebates are disclosed on cost reports. This interest is specific to rebate checks … not volume discounts. The Work Plan indicated the OIG would review a sampling of such reports.

"Basically, they're going to pull information from vendors and then pull cost reports from the hospitals and see if they match up," Warren explained. "It's fine to get a rebate as long as you report it properly."

She added, "Often when they do these types of things, that may be the launching pad for a larger investigation or focus enforcement initiative."

However, Warren speculated, "If most people comply, that will probably be the end of it."

Warren said the OIG would also continue oversight of specialty hospitals, which has been an area of interest since 2003 when Congress issued the moratorium.

"The moratorium has expired, but CMS has made it clear they're going to continue to focus on physician-owned specialty hospitals, which is not surprising. If you didn't already know it, you are still under the gun to a degree," she said of such facilities. "I think there is still the potential for regulatory changes that could have an adverse impact."

Warren said the Work Plan identified an intention to focus on patient safety and quality of care within specialty hospitals and specifically mentioned examining policies on staffing requirements.

Also of specific interest are inpatient rehabilitation facilities and outpatient physical therapy, which are named in several investigative reviews.

With inpatient services, Warren said there have been payment changes, and the OIG is following up on compliance. One technical billing issue being targeted is to see if the rules of "transfer" or "discharge" are being properly followed. When a patient is transferred, payment is split between two facilities. With a discharge and then re-admittance, each facility is paid at a higher rate.

"So there certainly is an incentive to perhaps not code it correctly, and I also think it is a technically difficult (rule) so it might not be as cut and dried as it seems," she noted.

She continued, "Physical therapy is an area where I think people can get tripped up. To qualify for payment, you have to have a plan to restore some function or show improvement." She noted the therapy really couldn't be just for maintenance or comfort. "There has to be some kind of goal in mind that you achieve in order to be covered by Medicare."

The OIG is also looking for duplicate claims from providers … in particular, therapy claims being made to both Medicare Part A and Part B. In a separate line item, they are also focusing attention on comprehensive outpatient rehabilitation facilities (CORFs).

"They have reviewed CORFs in the past and found significant amounts of unallowable or questionable therapy services so it looks like they are going to focus further on medical necessity and whether there is adequate documentation," she warned.

For skilled nursing facilities, the OIG plans to look at consolidated billing rules in the coming year. Several years ago, the rule was changed so that the SNF (skilled nursing facility) receives one payment to cover everything with a few exceptions, such as physician time, Warren explained. Therefore with only a handful of exemptions, suppliers should contract with the SNF and receive payment directly from them.

"The government views the SNF as getting the full payment, and the SNF is responsible for going downstream and paying other vendors," Warren said. However, she added, "They (the OIG) feel at times they are getting billed twice by the SNF and the supplier."

Warren added that this rule change has been in effect for several years and should not be a surprise to anyone. However, questionable billing remains enough of an issue to warrant the OIG's scrutiny.

For individual physicians, the OIG plans to look at the relationship with billing service companies. Warren speculated that the OIG might be looking at arrangements such as whether the physician pays the billing service a flat rate or on a percentage basis.

"The government generally does not favor percentage fees," Warren noted. She added that the more involved the billing company is with actually determining coding, the greater the perceived risk for abuse.

"Anytime you have the government looking at a relationship like this, it could lead to either regulatory changes or enforcement actions," she said.

Another area of interest with physicians is "incident to" services.

"That's an area that seems to be difficult for people to comply with fully," she stated.

In order to bill as "incident to," the physician must be onsite. While the doctor doesn't have to witness the service, such as a therapy session, he or she must be available in case an issue arises.

"There is a lot of potential for people to get sloppy here … the doctor leaves and someone else goes ahead with a simple procedure, or sometimes you may be doing everything correctly but not documenting it properly," Warren said.

"The OIG has said in the past that 'if you didn't document correctly, then we're going to assume it wasn't done correctly,' which is kind of aggressive. If you're not careful, your billing can get out of sync with your practice," she pointed out.

Finally, Warren added, a great deal of emphasis in the Work Plan is focused on Medicare Part D — the new prescription drug benefit — to ensure the program is being run properly.




December 2006