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The OIG is responsible for deterring fraud and abuse by identifying systemic weaknesses and vulnerabilities that can be mitigated through corporate compliance programs. The OIG also pursues criminal convictions and recovers damages and penalties through civil and administrative proceedings from individuals and entities that commit fraud or abuse. Each year, the OIG publishes a Work Plan to identify and prioritize specific projects for future implementation. The OIG creates the Work Plan after completion of comprehensive financial and performance audits that identify systemic weaknesses that give rise to fraud, waste and abuse. The OIG Work Plan for Fiscal Year 2008 ("Work Plan") identifies areas that the OIG will study, audit and/or investigate in fiscal year 2008, and provides valuable guidance for identifying high risk compliance areas that apply to specified types of health care organizations. Health care organizations can mitigate their risk of false claims act or other fraud and abuse liability by assessing their operations in the context of current government priorities and identifying and correcting deficiencies in legal compliance. The following summarizes the most significant new OIG projects that will be implemented in 2008.

Health Plans

Significant new Health Plan issues that the OIG will review in 2008 include the following:

• Medicare Marketing. The OIG will review oversight of Medicare Advantage Plans' marketing and sales practices including an assessment of the sanctions imposed by CMS for marketing abuses and the extent of complaints about Plan marketing and sales practices
• EPSDT Mental Health Services. The OIG will review children enrolled in Medicaid Managed Care plans to determine how the Plans screen, refer, and provide mental health services to children under the Early and Periodic Screening, Diagnosis, and Treatment ("EPSDT") benefit and determine whether children received required mental health screenings
• Medicare Advantage Plan Bids. The OIG will review Medicare Advantage Plan bids and supporting documentation to determine whether payments made to such Plans are correct and supported by the level of service claimed
• Deceased Beneficiaries. The OIG will examine the extent to which payments are made to Medicare Advantage Plans for deceased beneficiaries

Physician Organizations

Physician billing to Medicare for diagnostic x-rays, MRI's and "incident to" services have previously generated OIG scrutiny, and the Work Plan indicates that the OIG intends to continue its focus on high utilization of services. Significant new physician issues that the OIG will review in 2008 include the following:

• Business Relationships and Utilization Rates for MRI. The OIG will examine the business and financial relationships among physicians, billing providers and others who provide services to see how those financial relationships affect utilization of MRI services
• Interventional Pain Management Procedures. The OIG will research the appropriateness of Medicare payments for these treatments and review medical necessity
• Chiropractic Treatments. The OIG will research the appropriateness of Medicare payments for these high frequency chiropractic treatments and review medical necessity related thereto. The OIG will focus on allowing payment for only those limited services for which chiropractors may properly receive payment
• Physician Reassignment of Benefits. Based on an investigation in South Florida that revealed fraudulent physician reassignment, the OIG will expand its review of physician reassignments

Hospitals

Significant new hospital compliance issues that the OIG will review in 2008 include the following:

• Disproportionate Share Hospital Payments. The OIG will review Disproportionate Share Hospital payments for compliance with applicable regulations, as well as review the calculation methodology, the appropriateness of hospital classifications, and the total amounts of uncompensated care that hospitals incur
• Inpatient Prospective System Wage Indices. The OIG will focus on hospital compliance with the requirements for reporting wage data. It will also examine the appropriateness of using hospital wage indices for other provider types
• Provider Bad Debts. The OIG will review Medicare bad debts claimed by a variety of providers (including hospitals and skilled nursing facilities) to determine the appropriateness of bad debt payments and whether recoveries of prior year write-offs were properly used to reduce the cost of beneficiary services
• Compliance with Medicare Transfer Policy. The OIG will review patient discharges that should have been coded as transfers as opposed to discharges

Skilled Nursing Facilities

The Work Plan contains several new projects designed to identify Medicare overpayments, discover SNF providers' claims for services that were not medically necessary, and uncover other Medicare fraud and abuse. These new SNF projects include:

• Accuracy of Coding for Resource Utilization Claims. The OIG will review a national sample of Medicare claims submitted by SNFs to determine the extent to which Resource Utilization Groups ("RUGs") included on SNF claims for Medicare reimbursement are accurate and supported by the residents' medical records. A 2006 OIG report found that 22 percent of claims were upcoded.
• Consolidated Billing. The OIG will review Medicare Part B claims submitted by suppliers for services provided to beneficiaries during Part A Medicare-covered SNF stays. Prior work has identified significant improper claims submission and reimbursement in this area.
• Enteral Nutrition Therapy ("ENT"). OIG will review Part B ENT, commonly called tube feeding, to determine the appropriateness of payments for associated services. This review will specifically assess the medical necessity, adequacy of documentation, and coding accuracy of claims submitted for Medicare beneficiaries during a nursing home stay that is not covered under the Part A SNF benefit. (ENT provided during a Part A SNF stay is the subject of another OIG review focusing on consolidated billing for SNFs and will address ENT provided during a Part A SNF stay). OIG will assess the appropriateness of payments for claims for ENT.
• Psychotherapy Services. The OIG will review Medicare Part B payments for psychotherapy services provided to nursing home residents during non-covered Part A stays. A previous OIG review found that approximately 31 percent of outpatient claims for Part B mental health services allowed by Medicare did not meet coverage guidelines, resulting in $185 million in inappropriate payments. The OIG will determine the medical necessity of services, appropriateness of coding, and adequacy of nursing home documentation.

Compliance Activities Health Care Organizations Should Undertake

Health care organizations should ensure that newly identified OIG projects contained in the fiscal year 2008 Work Plan receive priority in establishing future compliance efforts. In order to demonstrate that your compliance program is "effective" and is being updated to address new regulatory issues, we recommend that health care organizations take the following actions:

• Compliance Committee. Convene a compliance committee meeting to discuss the OIG's 2008 Work Plan, with particular emphasis on risk areas that impact your health care organization. Document these efforts by keeping written minutes of such meeting.
• Compliance Program Amendments. Carefully review your compliance program to consider whether amendments to the compliance program should be made. New risk areas identified in the Work Plan should be added to risk or audit areas set forth in the compliance program. All such compliance program amendments should be documented.
• Develop a Compliance Risk Assessment. One of the key components of an effective compliance program is that Hospitals should conduct a comprehensive risk assessment that identifies and prioritizes the compliance and business risks that the health care organization may experience in its daily operations and should serve as the basis for the written policies and procedures that the health care organization should develop. The risk assessment should: (1) identify the health care organization's key compliance risks; (2) evaluation compliance program control activities and the level of risk mitigation; (3) Rank risk areas and risk concern level; and (4) incorporate risk assessment results in the compliance program work plan.
• Develop a Compliance Work Plan. Upon completing a compliance risk assessment, the next step is to create a compliance work plan detailing various compliance monitoring and auditing activities for the upcoming year. The objective of the Work Plan is to plan for the provision of compliance, monitoring and audit services to those areas of greatest health care organization risk and management concern. The planning process should be broad based taking into consideration existing and emerging strategic, financial, operational, compliance and overall risks associated with the health care organization's operations. There are a significant number of resources readily available to assist you in preparing a Work Plan. Resources to consider in preparing your work plan include: OIG 2008 Work Plan; State and Federal Laws, licensing, accreditation, and certification requirements; OIG advisory opinions; OIG audit services and investigation reports; Local Medical Review Policies; Local Coverage Decisions; Medicare bulletins and CMS updates; and Peer Review Organization activities. Elements of a compliance program Work Plan should include audits, investigations, consulting services, training and education, and compliance services. The matrix provided below may be helpful in defining those compliance activities most applicable to your health care organization and help to inform management of your key risk areas.
• Auditing and Monitoring. Initiate internal and/or external monitoring and audits of the areas of the OIG Work Plan that impact your medical group to evaluate your compliance in those areas. "Monitoring" is a process involving ongoing checking and measuring to ensure quality control. Monitoring involves daily, weekly, or other periodic checks to verify that essential functions are being adequately performed and that processes are working effectively. The results of the monitoring process may indicate the need for a more detailed audit. "Auditing" is a systematic and structured approach to analyzing a compliance process. It is a formal review that usually includes planning, identifying risk areas, assessing internal controls, sampling of data, testing of processes, validating information, and formally communicating recommendations and corrective action measures to both management and the board of directors. Document these efforts by preparing a written summary of the methodology and results of such audits, and any corrective actions taken as a result.
• Educate Personnel. Educate management, professionals and staff with respect to new risk areas and the need to develop mechanisms to reduce the risk of noncompliance. New policies and procedures should be developed to address new risk areas identified by the OIG Work Plan, and the new policies and procedures should be coordinated with training and educational programs. Document all efforts in connection with any educational program or seminar offered regarding compliance issues.

Conclusion

Health care organizations should regularly review and update the implementation and execution of their compliance program to ensure its effectiveness. An effective compliance program demonstrates a good faith effort to comply with applicable statutes, regulations, and other Federal health care program requirements, and may significantly reduce the risk of unlawful conduct and corresponding sanctions. Our firm has assisted numerous health care organizations with the development, implementation and operation of corporate compliance plans. If you require our assistance or have any questions please contact Michael Dowell at mdowell@tocounsel.com or the lawyer in the firm who generally handles your health care legal matters.