Insights & Resources

October 11, 2022 | Alerts

The Office of Inspector General Updates Its Work Plan for Evaluation, Inspection & Audit of Inpatient Rehabilitation Facilities, Medicaid Managed Care Plans, and Hospitals

The Office of Inspector General Updates Its Work Plan for Evaluation, Inspection & Audit of Inpatient Rehabilitation Facilities, Medicaid Managed Care Plans, and Hospitals

The Office of Inspector General (“OIG”) recently updated its Work Plan to include concerns with: inpatient rehabilitation facilities (“IRF”), a focus on Fraud Referrals with Medicaid Managed Care Plans, and audits on hospital price transparency.  Below is a summary of the updates to the Work Plan.

Inpatient Rehabilitation Facilities
An IRF provides intensive inpatient rehabilitation therapy for patients who have complex nursing, medical management, and rehabilitation needs that require hospital-level treatment in an inpatient environment.  For an IRF claim to be considered reasonable and necessary, certain coverage and documentation requirements must be met.  Since prior OIG audits have identified billions of dollars in overpayments for IRF claims, the OIG plans to determine whether there are areas where Centers for Medicare and Medicaid (“CMS”) can clarify Medicare IRF claims payment criteria.

Medicaid Managed Care Plans’ Focus on Fraud Referrals
States contract with private health insurance companies, or managed care plans, that have the primary responsibility for processing, paying, and monitoring the claims of providers in their networks.  Under federal regulations, state contracts with managed care plans must require that plans promptly refer any potential fraud, waste, or abuse to state Medicaid agencies or Medicaid Fraud Control Units (MFCUs).  Both OIG and CMS have ongoing concerns about managed care plans’ efforts to combat fraud, including concerns about a lack of fraud referrals.

To address those concerns, the OIG will:

  • evaluate the number of potential fraud referrals managed care plans made to states, MFCUs, and other entities;
  • determine whether managed care plan processes support the referral of potential fraud; and
  • identify factors that influence whether managed care plans make referrals.

Through this effort, the OIG aims to identify ways to increase the number of fraud referrals from managed care plans while ensuring quality referrals.

Hospital Price Transparency Compliance
Effective January 1, 2021, CMS instituted a rule requiring hospitals to make prices readily available for consumers.  CMS’ rule requires hospitals to include gross charges for each item or service, payer-specific negotiated charges for each item or service, the discounted cash price, and codes used by a hospital to identify each item or service.
Hospitals found to be in non-compliance face potential consequences, including, but not limited to:

  • providing a written warning listing violations;
  • requiring a hospital to create a corrective action plan; and
  • imposing civil monetary penalties.

The OIG will review the controls in place at CMS and statistically sample hospitals to determine whether CMS’ controls are sufficient to make sure hospitals are in compliance.  If the OIG finds that hospitals are not in compliance with CMS’ rule, the OIG will contact the hospitals to determine the reason for non-compliance and determine whether CMS identified the non-compliance and imposed consequences on the hospitals.

The OIG’s Work Plan is available here: https://oig.hhs.gov/reports-and-publications/workplan/active-item-table.asp

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Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].