OIG Work Plan 2017 + Lutz Healthcare Accounting & Consulting

OIG Work Plan 2017



The OIG (Office of Inspector General) Work Plan for 2017 is a blend of “oldies-but-goodies” as well as some new issues.  There are a significant number of issues for which the OIG has only scratched the surface on in their past reviews.  For these issues, the reviews and scrutiny will become more intense.  The OIG continues to data mine, accumulate data, analyze, and push forward with their agenda to “protect the integrity of HHA and operations and the well-being of beneficiaries by detecting and preventing fraud, waste, and abuse; identifying opportunities to improve program economy, efficiency, and effectiveness; and holding accountable those who do not meet program requirements or who violate Federal health care laws”.  The OIG mission is an enormous one, and one they take very seriously.  As such, it is prudent for all healthcare providers to be aware of the OIG work plan and objectives during their strategic planning process, as well as daily operations.  Below are a few highlights from the 2017 OIG Work Plan we believe should be addressed at healthcare facilities.


Provider-Based vs. Freestanding Clinics

An example of ongoing OIG efforts is the provider-based versus free-standing clinics classification.  The OIG will review payment differentials between the two, assessing the impact to both Medicare and beneficiaries for these services. An issue for all hospitals, but perhaps most importantly to CAHs (Critical Access Hospitals), is the status and treatment of areas considered provider-based.  We recommend that facilities ensure the provider based areas meet the provider-based criteria.  Also, facilities should verify that provider-based locations do not conflict with the CAH CoP (Conditions of Participation).  Lastly, CMS and the OIG are placing an increased emphasis on the use of multi-purposes areas.  Hospitals should take the time to assess any locations which may be impacted.


HBO (Hyperbaric Oxygen) Therapy

The OIG is concentrating efforts to determine that: 1) beneficiaries are receiving treatments for only covered conditions, 2) medical documentation adequately supports these treatments, and 3) beneficiaries receive only the number of treatments considered medically necessary.


IPF (Inpatient Psychiatric Facility) Outlier Payments

The OIG is concerned that from FY 2014 to FY 2015, the number of claims with outlier payments increased by 28 percent.  Consistent with these numbers, total Medicare payments for stays that resulted in outlier payments increased by 19 percent.  We recommend that providers ensure IPF patient coverage, coding, and documentation are in compliance with regulations.


Outpatient Stays and the Two-Midnight Rule

CMS implemented the two-midnight rule as of October 1, 2013.  The basis of the rule is that an inpatient payment is generally appropriate if the physician expects the beneficiary’s care to last at least two midnights.  If the physician does not expect a two-midnight stay, outpatient payment for those services would be appropriate. The OIG continues to accumulate data on this issue to determine the impact of this rule.


Home Health Compliance

Home Health is a major CMS expenditure.  For CY 2014, Medicare paid over $18 billion for home health services.  Their CERT (Comprehensive Error Rate Testing) program determined an error rate for home health claims of 51.4 percent.  The OIG will review compliance with the home health payment system, including medical review.


Drug Waste of Single-Use Vial Drugs

Effective January 1, 2017, CMS provided a policy on use of the “JW” modifier for discarded Part B drugs and biologicals in an effort to track the amount of reimbursed waste.  The OIG will determine the amount of waste for the 20 single-use-vial drugs with the highest amount paid for waste as identified by the JW modifier and provide specific examples of where a different size vial could significantly reduce waste.


Source: OIG Work Plan 2017





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.

  • Healthcare Financial Management Association - Nebraska Chapter, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
  • BA in Accounting, University of Northern Iowa, Cedar Falls, IA
  • St. Vincent de Paul, Knights of Columbus, Member
  • Active in various youth sports leagues: Aldrich Elementary, Millard Athletic Association, Millard North Schools, Omaha FC, Skutt Catholic High School and YMCA


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