Alabama Trends

We have many customers in Alabama and have gained an extensive amount of knowledge of healthcare regulations in the state. This expertise has enabled us to become an active member of the Alabama Revenue Integrity Committee (RIC), helping to clarify healthcare policy in Alabama. We often provide materials, help facilitate discussions and provide educational opportunities for other committee members.

We provide Alabama Trend articles based on current topics, that affect Alabama healthcare providers. This information is meant for educational purposes only. For more information about the topics presented, please call us at 205-941-1105 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Alabama Trends – Fall 2011

The healthcare industry is always changing. Here are some the recent changes that will affect hospitals and others in healthcare in Alabama.

 

The OIG and the Duck Hunter

An avid duck hunter invited his new neighbor to go hunting with him. The young man had never been hunting before and he was very nervous. The veteran hunter took careful aim at the first flight of ducks, fired several shots, but alas, no ducks fell. The anxious young neighbor raised his gun at the next flight, but he was shaking so badly that the barrel of the gun danced all around. He fired several shots and amazingly three ducks fell. His somewhat offended neighbor remarked, “Well, son, if you aim all over the place, you are bound to hit something!”

Although the Office of Inspector General (OIG) continues to target specific issues for audits (see discussion of OIG work plan below), they are also following the novice hunter’s approach – if you aim all over the place, you are bound to hit something. Several recent OIG audits simply look at selected at-risk inpatient and outpatient claims to determine if the hospital is following Medicare billing guidelines. These audits address multiple billing issues. Two of the OIG Medicare compliance audit reports released in September reveal the following identified issues:

Inpatient Issues

  • Same day readmission related to previous admission, but billed separately
  • No valid physician order for inpatient admission
  • Miscoded and incorrect DRG assignment
  • Device credit not reported on claim
  • Inpatient admission did not meet inpatient criteria
  • Discharge disposition reported as discharge instead of transfer
  • Incorrect charges resulting in incorrect outlier payment

Outpatient Issues

  • Device credit not reported
  • Incorrect HCPCS code reported
  • Billing for outpatient services furnished during an inpatient stay
  • E&M services not documented
  • Incorrect units reported

These types of audits are successful (as was the duck hunter) at recouping overpayments and identifying a variety of vulnerabilities that the OIG and CMS can investigate elsewhere. (See CMS Transmittal 360 for a description of the process whereby CMS provides ACs/MACs with a list of CMS and OIG-identified errors/vulnerabilities on a quarterly basis and the contractors are required to report their corrective actions back to CMS.)

OIG 2012 Work Plan

The OIG listed several new hospital issues in the 2012 work plan. These are briefly discussed below.

  • Accuracy of Present On Admission (POA) Indicators – The OIG will review the accuracy of POA indicators submitted on inpatient hospital claims in October 2008. Accurate POA indicators are necessary to ensure that hospitals do not receive additional payment for certain conditions that are present on admission and to allow reduced payments for hospitals with high rates of hospital-acquired conditions as required by the DRA and Affordable Care Act respectively.
  • Compliant Billing of Hospital Inpatient and Outpatient Claims – This appears similar to the compliance audits discussed above. The OIG will use computer matching and data mining techniques to select claims that may be at risk for overpayments. Interestingly, the OIG will also use the data mining to generally rank hospitals across compliance areas as least risky to most risky and then compare the compliance programs of the two groups of hospitals.
  • Hospital Inpatients Transferred to Hospice Care – The OIG will examine the relationship (financial and ownership) between the acute care hospital and the hospice when a hospital inpatient is transferred to hospice inpatient care.
  • Medicare Outpatient Dental Claims – Since dental services are generally non-covered by Medicare, the OIG will examine those claims for dental services that were paid by Medicare to determine if they appropriately met one of the exceptions.
  • Inpatient Rehabilitation Facilities – The OIG will determine the appropriateness of IRF admissions and examine the intensity of services provided.

Some of the other hospital issues in the OIG work plan that are carryovers from previous years, but still of note are:

  • Adverse events reporting
  • Quality measure data accuracy
  • Inpatient outlier payments
  • High or excessive payment amounts
  • Same day readmissions
  • Outpatient services before or during an inpatient admission
  • Device credits
  • Appropriate use of observation

Though not always directly applicable to hospitals, interesting issues in the “Other Providers and Suppliers” section include partial hospitalization program services, sleep testing, high-cost radiology services and laboratory utilization.

The OIG audits can be found at http://oig.hhs.gov/reports-and-publications/oas/cms.asp and the Work Plan at http://oig.hhs.gov/reports-and-publications/workplan/index.asp#current.