Accounting

OIG Work Plan Update

Kirk Delperdang, Healthcare Director

November 15, 2017

The Office of Inspector General’s (OIG) work plan has undergone a facelift. Gone are the days of waiting for the shiny, new work plan for the coming year(s). The OIG has abandoned this annual ritual in favor of a flexible and dynamic process in which adjustments are made throughout the year. This new process is designed to both anticipate and respond to emerging issues in the healthcare community with the personnel and resources at OIG’s disposal. Therefore, for those of you waiting patients for the OIG annual report and work plan, wait no more. Effective June 15, 2017, the OIG has been updating their Work Plan and website monthly. The OIG Work Plan has historically been the planning document and roadmap for the OIG’s areas of concentration, projects, audits, and evaluations that are currently underway or planned to be addressed in the coming year(s). OIG projects cover the Department and include the Centers for Medicare & Medicaid Services (CMS), public health agencies such as the Centers for Disease Control and Prevention (CDC) and National Institutes of Health (NIH), and human resources agencies such as Administration for Children and Families (ACF) and the Administration on Aging. Here is a sampling of items that were recently revised or added to the OIG Work Plan during October 1:

Specialty Drugs

Medicaid spending on specialty drugs has rapidly increased. There is no standard definition for specialty drugs. They may be expensive; be difficult to handle, monitor or administer; or treat rare, complex or chronic conditions. The OIG will describe States' definitions of, and payment methodologies for, Medicaid specialty drugs and determine how much States paid for specialty drugs. The OIG will also review strategies that States use to manage specialty drug costs, such as formularies, cost sharing, step therapy, and prior authorization.

Bariatric Surgeries

Bariatric surgery is performed to treat comorbid conditions associated with morbid obesity. Medicare Parts A and B cover certain bariatric procedures if the beneficiary has (1) a body mass index of 35 or higher, (2) at least one co-morbidity related to obesity, and (3) been previously unsuccessful with medical treatment for obesity (CMS, Medicare National Coverage Determinations Manual, Pub. No. 100-03, chapter 1, part 2, § 100.1). Treatments for obesity alone are not covered. The Comprehensive Error Rate Testing program's special study of certain Healthcare Common Procedure Coding System codes for bariatric surgical procedures found that approximately 98 percent of improper payments lacked sufficient documentation to support the procedures (CMS, Medicare Quarterly Provider Compliance Newsletter, "Guidance to Address Billing Errors," volume 4, issue 4, July 2014). The OIG will review supporting documentation to determine whether the bariatric services performed met the conditions for coverage and were supported in accordance with Federal requirements (Social Security Act, §§ 1815(a) and 1833(e)).

Telehealth Services

Medicare Part B covers expenses for telehealth services on the telehealth list when those services are delivered via an interactive telecommunications system, provided certain conditions are met (42 CFR § 410.78(b)). To support rural access to care, Medicare pays for telehealth services provided through live, interactive videoconferencing between a beneficiary located at a rural originating site and a practitioner located at a distant site. An eligible originating site must be the practitioner's office or a specified medical facility, not a beneficiary's home or office. The OIG will review Medicare claims paid for telehealth services provided at distant sites that do not have corresponding claims from originating sites to determine whether those services met Medicare requirements.

Comparison of Provider-Based and Freestanding Clinics

Provider-based facilities often receive higher payments for services than freestanding clinics. The OIG will review and compare Medicare payments for physician office visits in provider-based clinics and freestanding clinics to determine the difference in payments made to the clinics for similar procedures. They will also assess the potential impact on Medicare and beneficiaries of hospitals' claiming provider-based status for such facilities.

Medicare Part D Rebates Related to drugs Dispense by 340B Pharmacies

Drug manufacturer rebates reduce the cost of the Part D program to beneficiaries and the Government. Manufacturers frequently do not pay rebates for Part D prescriptions filled at 340B covered entities and contract pharmacies since they are already providing a discount on the purchase of the drug. The Medicare Part D program does not share in the purchase discounts. Savings could be realized if requirements similar to those of the Medicaid Drug Rebate Program that require manufacturers to pay rebates were adopted by the Medicare Part D program. The OIG will determine the upper bound of what could be saved if pharmaceutical manufacturers paid rebates for drugs dispensed through the Medicare Part D program at 340B covered entities and contract pharmacies. The OIG Work Plan can be found at the following website location:

Responsibility, Arranger, Includer, Harmony, Communication

Kirk Delperdang

Healthcare Director

Kirk Delperdang is a Healthcare Director at Lutz with over 28 years of experience. He provides healthcare enrollment services to clients with a focus on Medicare providers and reimbursement analyses. In addition, he is responsible for leading Lutz's cost report service line.

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About

OIG Work Plan Update

Specialty Drugs

Bariatric Surgeries

Telehealth Services

Comparison of Provider-Based and Freestanding Clinics

Medicare Part D Rebates Related to drugs Dispense by 340B Pharmacies

Kirk Delperdang

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