A Physician’s Primer for the 2006 Office of Inspector General’s Work Plan
By: Michael Schoppmann, Esq.
Kern, Augustine, Conroy & Schoppmann

In issuing its 2006 Work Plan, the Office of Inspector General (“OIG”) provides physicians with valuable insights into those areas to which the OIG will focus and fund specific, targeted efforts and resources. What follows is a brief synopsis of some of the physician-targeted “vulnerabilities” and how the OIG plans to eliminate them:

Billing Service Companies
The OIG will identify and review the relationships between billing companies and the physicians and other Medicare providers who use their services and determine the impact of these arrangements on physicians’ billings.

Medicare Payments to VA Physicians
The OIG will asses the validity of Medicare reimbursement for services billed by physicians who receive remuneration from the Department of Veterans Affairs (VA) for the time the physicians reported being on duty at a VA hospital. Physicians employed by VA may not bill Medicare for services rendered at other hospitals during the times they were on duty at a VA hospital. The OIG has identified a number of VA physicians who received Medicare reimbursements totaling approximately $105 million for services rendered between the beginning of January 2001 and the end of June 2003. Using time reporting and payroll documentation from the VA, the OIG will identify the services rendered while the physicians were reported on duty at VA hospitals and remunerated for such duty.

Care Plan Oversight
The OIG will evaluate the efficacy of controls over Medicare payments for care plan oversight claims submitted
by physicians. Care plan oversight exists where there is physician supervision of patients in hospice care that require complex or multidisciplinary modalities involving regular physician and/or revision of care plans. Reimbursement for care plan oversight increased from $15 million in 2000 to $41 million in 2001. The OIG will assess whether these services were provided in accordance with Medicare regulations.

Ordering Physicians Excluded from Medicare
The OIG will quantify the extent of services, if any, ordered by physicians excluded from Federal health care programs and the amount paid by Medicare part B. Federal regulation generally precludes physicians who are excluded from Federal health care programs from ordering or performing services for Medicare beneficiaries. In a current review, the OIG identified a number of services that had been ordered by excluded physicians.

Physician Pathology Services
The OIG will focus on pathology services performed in physicians’ offices. The OIG will determine if the billings for pathology laboratory services comply with Medicare Part B requirements. Medicare pays over $1 billion annually to physicians for pathology services. The OIG will identify and review the relationships between physicians who furnish pathology services in their offices and outside pathology companies.

Cardiology and Echocardiography Services
The OIG will review Medicare payments for cardiography and echocardiography services to determine whether physicians billed appropriately for the professional and the technical components of the services. Like many physician services, cardiography and Echocardiography include both technical and professional components. When a physician performs the interpretation separately, the modifier 26 should be used to bill Medicare.

Physical and Occupational Therapy Services
The OIG will review Medicare claims for therapy services provided by physical and occupational therapists to determine whether the services were reasonable and medically necessary, adequately documented, and certified by physician certification statements. Physical and occupational therapies are medically prescribed treatments concerned with improving or restoring functions, preventing further disability, and relieving symptoms.

Payment to Providers of Care for Initial Preventative Physical Examination
Section 611 of the Medicare Modernization Act (MMA) provides for coverage under Part B of an initial preventive physical examination (IPPE), including a screening electrocardiogram (EKG) for new Medicare for new Medicare beneficiaries effective January 1, 2005. In addition to the screening EKG, the IPPE must include a measurement of height, weight, blood pressure, a review of medical and social history, assessment of the potential for depression, and evaluation of functioning ability. For new Medicare beneficiaries with established relationships, the physician is presented with the opportunity to claim a higher payment for IPPE under a new Healthcare Common Procedure Coding System (HCPCS) code, G0344, for services that may already have been performed in a past evaluation and management visit. The OIG will evaluate the impact if IPPE on Medicare payments and physician billing practices.

Part B Mental Health Services
The OIG will determine whether Medicare Part B mental health services provided in physicians’ offices were medically necessary and billed in accordance with Medicare requirements. Payments for mental health services provided in the physicians’ office setting accounted for approximately 55 percent of the $1.3 billion in Medicare payments for Part B mental health services in 2002. In a prior report, the OIG found that Medicare allowed $185 million for inappropriate mental health services in the outpatient setting. The OIG will also determine the financial impact of claims that do not meet Medicare requirements.

Wound Care Services
The OIG will determine whether claims for wound care services were medically necessary and billed in accordance with Medicare requirements. Medicare-allowed amounts for certain wound care services billed by physicians increased from approximately $98 million in 1998 to $147 million in 2002. The OIG will also examine the adequacy of controls to prevent inappropriate payments for wound care services.

“Long Distance” Physician Claims
The OIG will review Medicare claims for face-to-face physician encounters where a significant distance separated the practice setting and the beneficiary’s location. While all beneficiary’s may seek professional services for specialized consultation during leisure travel, those with ongoing illnesses requiring skilled care would be unlikely to travel long distances from home. The OIG will examine these claims to confirm that services were provided and accurately reported. If warranted, the OIG will recommend enhancements to existing program integrity controls.

Potential Duplicate Physical Therapy Claims
The OIG will assess whether CMS’s systems are able to identify and prevent payment for potential duplicate claims for physical therapy submitted by providers. In May 2004, CMS issued a fraud alert regarding physical therapy suppliers switching their submission of claims between Part A and Part B. The OIG will review the current Common Working File operations to determine whether edits are adequately identifying potential duplicate physical therapy claims submitted to Part A and Part B contractors.

Durable Medical Payments for Beneficiaries Receiving Home Health Services
During recent audits of home health agency (HHA) services, beneficiaries have indicated during interviews that they receive numerous durable medical equipment (DME) items and supplies. The OIG will review medical records for DME items and supplies furnished to beneficiaries receiving HHA services to determine whether the items and supplies were reasonable and necessary for the beneficiaries’ conditions.

Medicare Payments for Therapeutic Footwear
Under certain circumstances, Medicare covers therapeutic footwear for beneficiaries who have diabetes and at one of several related conditions. Medicare payments for therapeutic footwear totaled over $130 million in 2003. A previous OIG report indicated that a significant percentage of payments made for therapeutic footwear did not have adequate documentation to support the beneficiaries’ medical need for the footwear. The objective of this study will be to determine whether therapeutic footwear furnished by individual suppliers was reasonable and necessary for the beneficiaries to whom it was provided.

Medical Necessity of Durable Medical Equipment
The OIG will determine the appropriateness of Medicare payments for certain items of durable medical equipment, such as power wheelchairs, wound care equipment and supplies, and glucose test strips. I OIG will assess whether the suppliers’ documentation supports the claim, whether the item was medically necessary, and/or whether the beneficiary actually received the item.

CMS Oversight of contractor Performance
The OIG will assess CMS oversight of contractor performance. In prior work, the OIG have found problems with CMS oversight of contractors and identified serious breaches of integrity among individual contractors. The OIG will review performance evaluation findings and recommendations, corrective action plans, and CMS actions taken as a result of evaluation findings. The OIG will also determine whether the evaluation process is an effective mechanism for monitoring contractor performance.

Duplicate Medicare Part B Payments
The OIG will determine if carriers made duplicate payments for the same Medicare Part B services. In prior inspections, the OIG found that Medicare carriers made potential duplicate payments within the same carrier and among multiple carriers. Both reports illustrated a significant vulnerability in Medicare’s claims processing systems that could lead to substantial losses for the program. The OIG will determine whether CMS or its carriers have taken sufficient corrective actions to prevent such duplicate payments from occurring.

Medicare Appeals Process
The OIG will update prior work in which the OIG identified significant problems in the Medicare appeals process which resulted in the system being backlogged and untimely. Several recommendations in these reports have subsequently been addressed by legislation, including the transfer of the Administrative Law Judge(ALJ) function from Social Security Administration (SSA) to HHS and modifying the timeframes for various levels of appeals to provide adequate time for fair and effective processing while still ensuring timely and efficient resolution of appeals. In a series of reviews, the OIG will examine the early implementation of these changes to the entire appeals process, including the transfer of ALJs to HHS. The OIG will also evaluate the impact of these changes on the process including examining the timelines and outcomes of appeal processing at the various levels.

By preemptively verifying their own compliance in each of these targeted areas, physicians can dramatically reduce their risk of being “red-flagged” by OIG – an event which can, in turn, trigger far more invasive investigative measures and potentially expose the physician to even more serious and punitive actions of an administratively, civil and even criminal nature.