OIG Unveils Work Plan for 2001

January 15, 2001

John W. McDaniel

For physician groups treating Medicare patients, a new work plan for the year from the Office of Inspector General (OIG) shows that the OIG will examine physician-billing patterns regarding patient care. The work plan from the OIG of the federal Department of Health and Human Services clearly demonstrates that it wants physicians to substantiate medical necessity through appropriate and complete documentation and to make appropriate and accurate links between diagnosis coding (ICD-9-CM) and procedural coding (CPT-4).

The work plan for 2001 released in November identifies nine areas in which it will concentrate its investigations this year. Given the OIG’s intense efforts to curb what it believes are fraudulent and abusive patterns of behavior among health care providers, all medical practices should be developing and implementing medical practice compliance programs, particularly for coding and reimbursement.

In September, the OIG recommended that all physician practices establish standards for complying with federal regulations regarding Medicare reimbursement by developing a code of conduct and by writing policies and procedures to ensure compliance. In making its recommendations last year, the OIG issued guidelines to help explain many issues particularly troubling to physicians. (The recommendations, Compliance Program Guidance for Individual and Small Group Physician Practices, are on the Internet at www.hhs.gov/oig/new.html).

Physicians should take advantage of the fact that the OIG is one of the few federal agencies that issue reports in advance of its investigative plans for the future and be mindful of these specific target areas.

In addition to listing nine areas specific to physician practices where it will concentrate its auditing and investigative efforts this year, the OIG has identified other areas of investigation as well (see sidebar). The nine areas are:
1. Physicians at teaching hospitals
2. Reassignment of physician benefits
3. Podiatrists’ Medicare billings
4. Podiatry services
5. Advance beneficiary notices
6. Critical care codes
7. Bone-density screening
8. The role of nonphysician practitioners
9. Services and supplies incident to physicians’ services.

1. Physicians at teaching hospitals (PATH). This initiative is designed to verify compliance with Medicare rules governing payment for physician services provided in teaching hospitals and to ensure that claims accurately reflect the level of service provided to patients. Previous OIG work in this area suggested that many providers were not in compliance with applicable Medicare reimbursement policies.
PATH audits have led to huge repayments by many teaching hospitals since prior OIG audits have found that physician services were not billed at the correct level. This area is being continued for investigation in order to verify compliance with Medicare rules.

2. Reassignment of physician benefits. The OIG will evaluate the practice of allowing physicians to reassign their billing numbers to clinics. Clinics that employ more than one doctor may accept reassignment of the physicians’ billing numbers, thus allowing the clinic to handle all billing and keep all fees for physician-provided services, usually in exchange for paying a flat fee or salary to the physicians. Known as reassignment of benefits, this practice is convenient for physicians and the clinic business office. Typically, in these instances, the physician never sees what is billed under his or her physician number. This practice shifts the accountability and liability for billing abuses away from the physician to the clinics. The OIG will examine past reassignment abuses to determine specific vulnerabilities.

The issue of reassignment has led to upcoding in some cases and can increase the potential for fraudulent claims. Physicians need to evaluate the practice of reassigning their billing numbers to clinics because the OIG is focusing on the “855 Reassignment Form,” believing that it has become a document that can be used for fraud and abuse.

3. Podiatrists’ Medicare billings. The OIG wants to determine the extent to which podiatrists improperly bill Medicare. An OIG audit of a podiatrist in one state disclosed an error rate of 99%, and the OIG believes it has anecdotal evidence that suggests that claims from other podiatrists may represent a significant problem.
By focusing on podiatrists, the OIG may be signaling that it believes there is a general lack of knowledge among this group of specialists about the appropriate use of evaluation and management codes. Obviously, the OIG would be concerned about any lack of knowledge because many physicians already have insufficient or poor documentation and often fail to provide substantiation of medical necessity. Audits of podiatry practices have found high billing error rates and upcoding in several states, and prior settlements indicate that some podiatrists have billed for medically unnecessary services or for services never provided.

4. Podiatry Services. The OIG will review a sample of podiatry claims to determine if the services have met the coverage policy of the federal Health Care Financing Administration (HCFA), which runs Medicare, and to gain a better understanding of the factors affecting what the OIG considers an extreme variation in allowed charges per thousand beneficiaries. From 1992 through 1995, for example, Medicare expenditures for nail debridement increased 46%, while Medicare expenditures for all other Part B services increased only 18%.

Earlier OIG audits have shown an apparent failure by podiatrists to meet the Medicare definition of “reasonable and customary services.” Furthermore, the OIG believes podiatrists generally are not as familiar as other specialists are with the logic behind linking appropriate procedures to a specific diagnosis.

5. Advance Beneficiary Notices (ABNs). The OIG will examine the use of ABNs, which physicians must give to Medicare beneficiaries prior to treatment if they provide services that they know or believe Medicare does not consider medically necessary or for which Medicare will not provide reimbursement. The OIG also will examine the financial effect of ABNs on beneficiaries and providers. OIG has evidence that the use of ABNs varies widely.

6. Critical care codes. The OIG will examine the use of two critical care codes that may be billed to Medicare only if the patient is critically ill and requires constant attention by a physician. Payment for critical care is based on the time spent with the patient. The OIG will examine claims data to determine whether some physicians may be billing inappropriately for critical care and identify any other potential vulnerabilities.

7. Bone-density screening. The OIG will evaluate the effect of the recent standardization and expansion of Medicare coverage for bone-density screening. As the number of claims for bone-density screening increases, there are questions about the appropriateness and quality of some services.

When billing for bone-density screening, physicians should be aware that this issue relates to medical necessity since many physicians do not meet screening requirements when billing for this test. Also, it is important to link the appropriate procedure to the patient’s diagnosis.

8. The role of nonphysician practitioners. The OIG will describe the scope of services that nonphysician practitioners provide to Medicare beneficiaries and identify any potential vulnerabilities that may have emerged since the Balanced Budget Act was passed in 1997.

For practices that use nurse practitioners, clinical nurse specialists, or physician assistants, it is important to identify the scope of services these individuals provide to Medicare beneficiaries and understand that the OIG’s major concern involves quality of care issues. The OIG wants to determine whether physicians are improperly billing for services provided by nonphysician practitioners.

9. Services and supplies incident to physicians’ services. The OIG will evaluate the conditions under which physicians bill “incident-to” services and supplies. Physicians may bill for the services provided by allied health professionals, such as nurses, technicians, and therapists, as incident to their professional services. Incident-to services, which are paid at 100% of the Medicare physician fee schedule, must be provided by an employee of the physician and under the physician’s direct supervision. Because little information is available on the types of services being billed, questions persist about the quality and appropriateness of these billings.

“Incident to” billing and the issues involving “physician direct supervision” have been a concern for the OIG for some time. Physicians should evaluate the appropriateness and quality of these billings since the OIG’s focus is on whether physicians are on the premises to supervise these medical services properly.

As with any matter involving Medicare and the OIG, it is extremely important that physicians first understand all of the issues. Then, physicians must review their practices to ensure that they are in compliance. The best way to ensure compliance is for physicians to follow the OIG’s recommendations to develop and implement a medical practice compliance program for coding and reimbursement. Having such a program may be the only way to help prevent an audit and avoid a penalty.

__________________________________
Other Areas of Interest
In addition to the nine primary areas of interest that the Office of Inspector General (OIG) has identified in its work plan for this year, the OIG of the federal Department of Health and Human Services has outlined several other physician-related target areas that it will focus on this year. Among these areas are the following:

Clinical Laboratory Improvement Amendments (CLIA) Certifications. The OIG will determine whether laboratories are conducting tests and billing Medicare within the scope of their certifications under the CLIA.

Medicare billings for cholesterol testing. The OIG will determine whether cholesterol tests billed to Medicare are medically necessary and coded accurately. Total cholesterol testing can be used to monitor many patients, but Medicare claims show a preponderance of billing for lipid panels, which include HDL cholesterol and triglycerides also.

Rural health clinics. The OIG will follow up on its previous study of rural health clinics to determine whether its recommendations have been implemented.
Physician incentive plans. The OIG will review physician incentive plans included in contracts between physicians and managed care organizations. As part of this review, the OIG will consider clauses in these contracts that could affect the quality of care.

Medicare Part B. The most common Part B violation involves false provider claims to obtain payments. The OIG will investigate a broad range of suspected fraud and present cases for both criminal and civil prosecution.

Outpatient prospective payment system. The OIG will evaluate the effectiveness of internal controls, coding, and whether the services provided are medically necessary. Physicians should pay particular attention to coding for evaluation and management and critical care. —JWM