2013 OIG Work Plan: HHS Targets Three Areas
By Susan Chapman
For The Record
Vol. 25 No. 9 P. 22
From a coding perspective, mechanical ventilation, cancelled surgeries, and Medicare’s transfer policy take top billing.
Last October, the Office of Inspector General (OIG) released its work plan for fiscal year (FY) 2013, an event that sometimes can trigger anxiety among health care organizations. Published annually, the work plan outlines the OIG’s enforcement priorities, enabling health care facilities to better identify compliance risks and more accurately gauge their chances of meeting the requirements.
According to the OIG, the work plan is part of “a dynamic process, and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available. We assess relative risks in the programs for which we have oversight authority to identify the areas most in need of attention and, accordingly, to set priorities for the sequence and proportion of resources to be allocated.”
In creating the work plan, the OIG evaluates several factors, including mandatory requirements by law, regulation, or directive; congressional, Health and Human Services (HHS), or Office of Management and Budget requests and concerns; management and performance challenges facing HHS; collaborative work performed with partner organizations; and management’s responsiveness to results from previous reviews. Among OIG’s areas of focus for 2013 are coding related to payments for mechanical ventilation and cancelled surgeries as well as Medicare’s transfer policy.
According to the work plan, the OIG intends to review Medicare payments for mechanical ventilation—the use of a respirator or ventilator that breathes for patients who cannot do so on their own—to determine whether the event and subsequent payments are appropriate. During this review, the OIG analyzes a sampling of Medicare payments in an effort to learn whether patients received fewer than 96 hours of mechanical ventilation.
The reason the OIG will be paying close attention to mechanical ventilation stems from another auditing initiative, says Kim Carr, RHIT, CCS, CDIP, clinical documentation manager at HRS. Recovery audit contractors determined that organizations are incorrectly adding the number of ventilator hours when patients are admitted to the hospital or they are selecting incorrect procedure codes, both of which result in higher reimbursement.
“Mechanical ventilation hours are calculated by the hour, not by the day,” Carr says. “The ventilator weaning time should be included when adding hours, but it is incorrect for coders to look at the number of days a patient was on the vent to determine ventilation hours.”
Carr offers the following two scenarios from the Medicare Quarterly Provider Compliance Newsletter Guidance to Address Billing Errors to illustrate how coding may stray off course when it comes to mechanical ventilation:
The first case involves a 52-year-old patient who was admitted to the hospital through the facility’s emergency department on June 21 at 4:44 am and placed on a ventilator at that time. On June 24, the patient expired at 3:45 am. In this instance, the total intubation time was 71 hours. While the provider used the procedure code for 96 hours of mechanical ventilation, the medical record accurately indicated only 71 hours.
The second scenario also involves an emergency department admission, this time for an 84-year-old individual who arrived on May 19 and died the next day. Again, the case was incorrectly coded for 96 hours of continuous ventilation when, in this case, the patient was on the mechanical ventilator for only 12 hours. “Simply adding things wrong or using the wrong codes, as highlighted in each situation, triggers these overpayments,” Carr says.
Nena Scott, MSEd, RHIA, CCS, CCS-P, a director of education at TrustHCS and a certified ICD-10 trainer, notes that paramedics sometimes intubate patients in the field “but counting the hours for mechanical ventilation should not begin until the patient arrives at the hospital. If a patient has a tracheostomy prior to admission and is on mechanical ventilation at the time of admission, the facility should start counting the time when the patient is admitted. If the patient is transferred and still on the ventilator, then the duration would end at the time of discharge. Essentially, the duration ends when the ventilator is no longer being used.”
The OIG also wants to determine costs incurred by Medicare related to inpatient hospital claims for cancelled surgical procedures. “Our preliminary analysis of Medicare claims data for inpatient stays demonstrated significant occurrences of an initial PPS [prospective payment system] payment to hospitals for a cancelled surgical procedure followed by a second, higher PPS payment to the same hospitals for the rescheduled surgical procedure,” the work plan states. “For these claims, the cancelled surgical procedure was the principal reason for the initial hospital admission.”
This review is an OIG priority because there are few inpatient services provided prior to surgery. Therefore, while the bill from an inpatient stay with a cancelled surgical procedure generally is low, a second, higher bill for the rescheduled and performed procedure often follows. The OIG wants to analyze these payment policies with an eye toward determining a procedure’s medical necessity. According to the OIG, there currently is no Medicare policy to preclude payment to the same hospital for two stays if an inpatient surgical procedure is cancelled during the first stay.
“Consider the example of a patient who has lung cancer and, while being prepped for surgery, has atrial fibrillation, which causes the surgery to be cancelled,” Carr says. “Due to coding guidelines, the principal diagnosis is still the carcinoma of the lung with a secondary diagnosis of atrial fib because the carcinoma of the lung was actually what the patient was admitted for. This same patient will be readmitted sometime later with the principal diagnosis of carcinoma of the lung to have the original scheduled surgery.”
Scott says the OIG is specifically looking at how these claims are submitted. “V codes show why surgeries were cancelled,” she says. “Sometimes surgeries are cancelled due to contraindication or even equipment failure. But it can also be the patient’s decision or just general terms. Right now, because hospitals are still being reimbursed for two DRGs [diagnosis-related groups], the OIG is possibly considering whether or not the first hospital visit, during which surgery was cancelled, should be paid differently.”
For now, health care organizations can’t be certain how the OIG will react to such situations. “There isn’t a policy yet,” Scott notes. “The OIG is trying to determine what the policy should be.”
Medicare Transfer Policy
The work plan states that “we will review Medicare payments made to hospitals for beneficiary discharges that should have been coded as transfers. We will determine whether such claims were appropriately processed and paid.”
Among the post-acute care settings encompassed by the transfer policy are long term care hospitals; rehabilitation, psychiatric, and skilled-nursing facilities; home health care that begins within three days of a hospital stay; distinct rehabilitation and psychiatric units within an acute care facility; or critical access, cancer, and children’s hospitals.
When a patient is transferred to another facility, the transfer DRG applies. Hospitals receive two times the per diem rate on the first day of a patient’s hospital stay, then the per diem rate each day thereafter, not to exceed the full DRG. If a patient is not transferred and instead goes home, then the hospital receives the full DRG payment.
Carr points out that because resources used for surgical patients are front-end heavy, there are 27 special-pay surgical DRGs. Under the special-pay transfer DRGs, a hospital receives 50% of the full DRG payment in addition to the per diem on the first day, and then one-half the per diem rate each day following until the full DRG payment is reached.
She adds that DRG payments are reduced when a patient’s length of stay is at least one day less than the geometric mean length of stay for the DRG; the patient is transferred to another hospital covered by the acute care hospital Inpatient Prospective Payment System or, for some Medicare-severity DRGs, discharged to a post-acute setting; the patient is sent to a hospital that does not have an agreement to participate in the Medicare program; or the beneficiary is transferred to a critical access hospital.
“Here the OIG is likely looking for fraud,” Scott says. “The transfer policy has a lot of fraudulent activity. Coders look at the doctor’s discharge orders to see if the patient is going home or transferred. Some facilities may have individuals other than coders who abstract this information, so it’s important that coders then verify that the information is accurate.”
Scott notes that analyzing this information can benefit hospitals. “For their bottom lines, hospitals need to have this information,” she says. “For instance, if a patient is discharged to home health care, but she doesn’t receive it—perhaps her family feels they can take care of her—then the hospital is entitled to the full DRG payment, not just the per diem rate. Hospitals can be underpaid if they are not doing due diligence and following up as well.”
Assessing Outcomes and Ensuring Accuracy
In its current publication, the OIG points to its measurable achievements from previous work plans: “Among the OIG’s goals for FY 2011, we reported expected recoveries of about $5.2 billion consisting of $627.8 million in audit receivables and $4.6 billion in investigative receivables [which includes $952 million in non-HHS investigative receivables resulting from our work in areas such as the States’ share of Medicaid restitution]. We also identified about $19.8 billion in savings estimated for FY 2011 as a result of legislative, regulatory, or administrative actions that were supported by our recommendations. Such savings generally reflect third-party estimates [such as those by the Congressional Budget Office] of funds made available for better use through reductions in Federal spending.”
Both Scott and Carr agree that the work plan is effective in helping recoup lost costs, determining areas that can be more efficient, and creating policies that result in fiscal benefits. Health care facilities also can gain from the work plan’s focus on important payment concerns. “Facilities need to be properly reimbursed to remain solvent, and the best way to ensure reimbursement is to maintain an accurate record and code events properly,” Scott says. “With mechanical ventilation, for instance, make sure the times are recorded accurately. And with transfers, document where the patient is being sent.”
Carr concurs: “With the three main areas the plan addresses this year, documentation always needs to support the record. In this way, the record will accurately demonstrate that the event meets medical necessity requirements and supports the facility not only if there is an audit, but to ensure correct reimbursement as well.”
— Susan Chapman is a Los Angeles-based writer and author.
Cancelled Surgeries Prove Costly
In a study led by Sabrina Terre Bent, MD, MS, director of research and pediatric anesthesiology for Tulane University School of Medicine’s department of anesthesiology, researchers found that 327 of 4,876 scheduled elective outpatient surgeries were cancelled in 2009. Historically, surgical procedures account for approximately 60% of a facility’s revenue. Consequently, cancelled procedures can have a profound impact on an organization’s financial well-being.
The researchers found patient no-shows to be a particular problem, with more than 30% of studied patients missing their procedures because of factors such as transportation, forgotten appointments, and confusion over dates.
Researchers also found that cancelled procedures could stem from facility-related issues, including equipment problems and lack of beds. Poor scheduling, such as when two procedures were planned simultaneously and only one piece of equipment was available, was another factor.
According to the researchers, patients who did not meet with an anesthesiologist before surgery were more likely to cancel. Patients with no preoperative visit had a cancellation rate of nearly 11% compared with only 4% for those who had a preoperative consultation.
The actual cost of cancelled procedures varied by specialty, with neurosurgery incurring the highest average loss at $5,962 per case.
The study revealed that cancelled surgeries resulted in “opportunity costs,” as hospitals couldn’t adjust when procedures were cancelled on short notice and could not perform other types of surgery that would enable them to recoup the lost revenue.
To stem the deleterious effects on revenue, the researchers recommended ensuring that patients had preoperative anesthesiologist visits, addressing cancellation issues with the most costly specialties first, and improving resource and equipment allocation.