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Seven Things To Know When You Receive A Notice Of Investigation From The Department Of Health

Office of Inspector General Work Plan 2013: A Provider's Overview

By Lance O. Leider, J.D.

Each new fiscal year, the Office of the Inspector General (OIG) Department of Health and Human Services (HHS) releases its annual Work Plan.  This Work Plan is the general overview of how the OIG intends to carry out its mission to make the Medicare and Medicaid programs run more smoothly and efficiently.

A large part of what the OIG does is review and investigate Medicare claims for overpayment.  The Work Plan allows the public to see how exactly the OIG plans to utilize its limited resources in enforcing Medicare and Medicaid regulations.

Of particular importance to Medicare and Medicaid providers is the Work Plan’s detailing of particular areas and billing codes and practices that will be under additional scrutiny during the 2012-2013 fiscal year.  By knowing where the enforcement focus will be, providers can attempt to avoid practices that are likely to lead to Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) audits.  Additionally, a provider that is in a high focus area can prepare for potential audits by beefing up its documentation and compliance efforts.

Nursing Homes

Nursing homes are a very large source of abuse of federal healthcare dollars.  As such, Work Plan 2013 has several key areas that will be the focus of OIG action.

Verification of Deficiency Correction

The OIG plans to verify compliance with deficiency corrections that are required by state survey agencies.  This means that not promptly and completely correcting and deficiencies cited by a state agency can impact a facility’s ability to bill Medicare.

Atypical Antipsychotic Drugs

The OIG will begin assessing the administration of atypical antipsychotic drugs and the required monitoring of patients receiving them.

Part B Services Provided to Residents

The OIG plans to continue close monitoring of Part B services like podiatry, ambulance, laboratory and imaging to ensure that they are properly billed.


The OIG intends to continue to examine the marketing materials and practices as well as the financial relationships that hospice providers have with nursing facilities.

The Work Plan cites a recent OIG report finding that eighty-two percent (82%) of hospice claims did not meet Medicare coverage requirements.

This study, combined with other data, has lead the OIG to believe that there are a large number of hospice and nursing facilities that are involved in inappropriate enrollment and compensation practices.

If you are a nursing facility or hospice provider it is highly advised that you thoroughly review your eligibility determinations and supporting documentation as this is likely to be a highly audited area.

In particular, it is anticipated that the OIG will be paying close attention to hospice providers that have a high percentage of their beneficiaries in nursing facilities.

Home Health Services

Home health services are one of the highest fraud areas.  Because of the nature of the business it is difficult to monitor and evaluate business practices.  A review of the Work Plan reveals that the OIG will continue to focus on overpayment in this area.

Two new areas of compliance evaluation focus are face-to-face encounters and reviews of personnel records.

Face-to-Face Encounter

The Affordable Care Act (ACA) initiated new requirements that a physician (or certain practitioners working with physicians) who certifies a beneficiary as eligible for Medicare-covered home health services have face-to-face encounters with the beneficiary.

The OIG will also be evaluating claims to be sure that the timing of the encounter is within the specified statutory period.

If you are a home health provider, you need to update your admissions documentation and procedure to account for this new requirement or face possible claim denial or recoupment.

Personnel Record Review

Because of the high level of fraud taking place in the home health industry, the OIG has decided to investigate whether or not home health agencies are complying with state and federal requirements for criminal background checks of employees.

The OIG cites a study it performed where it determined that ninety-two percent (92%) of providers had at least one employee with a criminal record.

If you employ disqualified employees you could possibly face claim denials, a state license action against your facility, or termination of your Medicare or Medicaid billing numbers.

Medical Equipment and Supplies

Another high-fraud area is medical equipment and supplies.  As such, a number of new and continuing processes will be implemented by the OIG to ensure the integrity of Medicare and Medicaid payments to medical equipment suppliers.

Accreditation of Suppliers

Because of recently enacted regulations, medical equipment suppliers must become certified by an accreditation organization in order to bill Medicare.  The OIG plans to review and examine the accreditation organizations’ procedures and requirements to ensure that they are meeting the Centers for Medicare & Medicaid (CMS) approved standards.

Although this requirement will not likely result in increased audits of equipment suppliers in the short term, there likely will be increased regulation as a result.  This increased regulation will almost certainly result in additional or more rigorous requirements to be met by suppliers in coming years.

Service Code Modifiers

The OIG intends to continue to monitor and review claims that are billed with certain code modifiers.  The types of modifiers that are billed indicate that the suppliers will have additional documentation to support the augmented code.  Because the OIG has discovered that an alarming portion of suppliers had little to no documentation to support their claims, increased audit activity is expected in this area.

If you are a medical equipment supplier, it is crucial that you review the billing requirement for each code billed and ensure that supporting documentation is in your files.

Lower Limb Prostheses

High dollar individual claims are a particularly fertile area for billing fraud.  As a result, the OIG plans to increase its review of claims for lower limb prostheses.  Previously, the OIG’s investigations have discovered a high number of claims that are billed with no physician order, no patient history of amputation, and other questionable billing characteristics.

As stated above, if you bill for these items, or any other big-ticket equipment, be sure that you have all of the documentation necessary to support the necessity of the claim.

Power Mobility Devices (PMDs)

For reasons similar to the above, PMDs are another problem area.  The OIG will be reviewing these claims for medical necessity as well as for compliance with new ACA regulations eliminating lump-sum payments for certain PMDs.

Frequently Replaced Supplies

The OIG is going to continue to review claims regarding these supplies to ensure that the supplier is not automatically refilling.  The Work Plan states that CPAP machine parts and diabetes testing supplies are going to be an area of focus.

In particular, the OIG is going to be actively reviewing diabetes testing supplies claims from 2011 and will be paying special attention to those claims received from any of the nine (9) Competitive Bidding Areas (CBAs).  The OIG will also be reviewing 2011 CBA claims for compliance with additional regulations regarding non-mail-order sales.

For a list of the CBAs, click here.

Other Areas of Focus

In addition to the specific industries listed above, the OIG plans to continue to use the following tactics and methods to ensuring billing integrity:

1. Expand the frequency of unannounced site visits.

2. Continue reviewing Comprehensive Error Rate Testing (CERT) data and step up audits on error-prone providers.

3. Conducting computerized scans of provider addresses and auditing those with commercial mailboxes for addresses.

4. Audit providers that have an outstanding Medicare recoupment debt but are billing under a different provider number.

5. Providers billing higher than average dollar amounts for fee for service claims and those who are billing more high-level CPT codes (upcoding).

6. Increased audits for independent physical therapists.

7. Increased audits for sleep study orders and sleep disorder clinics.  The OIG will also be examining these entities for improper referral practices and revenue sharing.

8. Ambulance and medical transport services will continue to be the subject of frequent audits.  The past year saw a large number of high-dollar fraud judgments in this area, and the OIG intends to continue to pursue these claims.

9. Anesthesia services will be reviewed for claims containing “personally performed services.”  The OIG will also look at claims with the “AA” and “QK” modifiers.

10. Opthalmalogical services will also be subject to increased scrutiny,  particularly claims from 2011.  The OIG plans to conduct its review with a focus on finding geographic “hot spots” for fraud and then focusing additional audits on those areas.

South Florida, Texas, California, New York, and Ohio physicians should take particular note of this.  As high fraud areas, it is inevitable that increased audits will be coming.

11. Community mental health centers and outpatient mental health departments of hospitals will continue to be an area of concentrated review for the OIG.  One area of focus will be on the provision of partial hospitalization programs and other intensive outpatient programs.

12. Electrodiagnostic testing (electromyography and nerve conduction studies) claims will also be under additional scrutiny for medical necessity documentation.  As with many other areas, these tests are expensive and the OIG is concerned about kickbacks and other improper referral techniques.

13. Diagnostic radiology claims will also be reviewed for medical necessity as well as for duplicate testing ordered by primary care physicians and specialists.

14. Other imaging services claims will be reviewed to determine if the practice expense components and equipment utilization rates are appropriately billed.

15. “Incident-to” services will be reviewed with increased scrutiny to ensure that such payments are properly billed.  Past OIG research has shown that incident-to services often resulted in billing more than twenty-four (24) hours of physician services in a day as well as unqualified non-physicians were performing more than twenty percent (20%) of the procedures.

16. Place of service codes will also continue to be reviewed.  Particular attention will be paid to the place of service code for claims performed in ambulatory surgery centers (ASCs) and hospital outpatient departments to determine if they are properly coded.


Because state Medicaid programs are jointly funded by the federal government, continued review of Medicaid claims for fraud and compliance is planned.  The Work Plan states that the following areas, among others, will be reviewed.

1. Home Health Services – beneficiary eligibility, physician determination of a plan of care, and health and background screening of employees

2. Adult Day Care – review of necessity, eligibility, and furnishment of services in accordance with a plan of care

3. Pediatric Dentistry – billing patterns and abuse

4. Hospice Services – beneficiary eligibility

5. Transportation Services – review of necessity and beneficiary eligibility

6. Medical Equipment Suppliers – increased scrutiny of supplier’s billing practices

Enhanced Enforcement Efforts

In addition to traditional claim review/audit techniques, liberal use of the List of Excluded Individuals and Entities to exclude providers will be continued.

The OIG also plans to continue working with FBI and other law enforcement agencies as part of the HEAT program.  Medicare Fraud Strike Force teams are expanding their ability to quickly prosecute fraud in the nine (9) major metropolitan areas in which they operate.


The Work Plan for fiscal year 2013 shows that the OIG is poised to continue rigorous and thorough enforcement efforts in the coming year.  Providers need to be aware of all of the requirements for each and every code that were billed and need to maintain comprehensive documentation justifying the bill.

Contact Health Law Attorneys Experienced in Handling OIG Actions.

Whether you, your company, or a colleague is looking for a review of your compliance processes or is facing an audit, a fraud control unit investigation, or other state or federal OIG action, it is imperative that you contact a health law attorney who has experience dealing with those matters.

The Health Law Firm routinely represents providers of all kinds in these actions and is capable of assisting your practice.  We have developed relationships with recognized experts in healthcare accounting, healthcare financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To learn more about The Health Law Firm, call us or visit our website.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at

About the Author: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

Tag Words:  OIG, Office of the Inspector General, CMS, Centers for Medicare and Medicaid Services, Work Plan 2013, audit, enforcement, HEAT, Medicare, Medicaid, LEIE, List of Excluded Individuals and Entities, Medicare Fraud Strike Force, home health, Zone Program Integrity Contractor (ZPIC), Recovery Audit Contractor (RAC), fraud, claim review, defense attorney, defense lawyer


(revised 12/4/2012)
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