What's on the OIG's Mind: Part I.

On October 29, 1999, the Office of the Inspector General (OIG) issued its draft model compliance plan for skilled nursing facilities. At approximately the same time, the OIG published its Work Plan for 2000. In December 1999, the Health Care Financing Administration (HCFA) issued its revised State Operations Manual, which incorporates Quality Indicators and requires that surveyors focus on hydration and nutrition issues. While these three documents might appear to be unrelated, providers need to understand that they signal a new era in enforcement against nursing homes, as well as new potential liability.

In a previous Legal Landscape (September 1999), I examined the OIG's advisory opinion, which indicated that deep discounts in Prospective Payment System (PPS) contracts could be considered kickbacks. The Work Plan, Draft Compliance Plan and Revised State Operations Manual expand on these prior concerns and highlight new areas of concern. Consider this article, and the next, your cheat sheet on what the OIG will be looking for this year and beyond. This article addresses the OIG Work Plan. The next article will examine OIG's Draft Compliance Plan and give providers a starter course in creating their own plan. A third article will show how clinical issues can result in a false claims lawsuit, and how the revised survey process can make you a target.

The OIG's Work Plan for Fiscal Year 2000 is more than 40 pages long and covers virtually every component of the healthcare system, from hospitals to hyperbaric oxygen treatment. Not surprisingly, a significant amount of the Work Plan is devoted to nursing homes. Twelve specific areas are targeted in the Work Plan under the topic of "Nursing Homes," and several other general topics, such as "Compliance Plan Guidance" and "State Survey and Certification Costs," are also applicable. Unfortunately, we only have space to cover the truly problematic areas, but you can find the Work Plan at http://www.dhhs.gov/progorg/oig/readrm/index.htm.

The twelve targeted areas for nursing homes, as identified by the OIG, are as follows:

1. Nursing Resident Assessments

Providers can expect increased scrutiny of their MDSs as the OIG seeks to determine whether providers are properly completing assessments or if they are gaming the system to increase their PPS reimbursement. Providers can expect that auditors and inspectors will be reviewing resident charts to ensure that care plans, treatments and evaluations are consistent with the information provided in the MDS. Disparities in the amount of services received and those indicated by the resident's assessment will result in reimbursement denials and, possibly, prosecutions. Facilities should consider conducting chart audits, covering initial assessments through billing for services, to ensure that staff at each level of the process understand how assessment, documentation and billing fit together.

2. Role of the Nursing Home Medical Director

The OIG will be examining the duties and responsibilities of medical directors to ensure that contracts with providers are legitimate rather than a cover for referral payments or kickbacks. Providers should consider reviewing the duties of their medical directors, as well as the documentation that supports the work done by the medical director and the salary received. To ensure greater cooperation from the medical director in this review process, the facility might want to point out that any problems could result in the physician also being prosecuted.

3. Quality Assessment and Assurance Committees

The OIG's decision to look into the inner workings of quality assurance committees and quality-of-care issues is a departure from the office's past focus on billing. The OIG will be examining facilities' quality assurance processes to ensure that they are actually identifying and addressing quality-of-care issues. The failure to have an effective quality assurance program could result in an action by the OIG, claiming that the provider fraudulently billed for services that did not meet Medicare requirements. Providers should make sure that their quality assurance program is active and effective, with documentation showing that identified issues are being addressed.

4. Nurse Aide Training

The OIG will also evaluate whether facilities are meeting the requirements required for nurse's aide training. Failure to provide the required training, to complete the necessary background checks or to document these actions, could expose a facility to an allegation that staff were not properly trained and, therefore, any care provided by these individuals is not reimbursable. The OIG could use nurse's aide training as the basis for a false claims suit.

5. Family Experience With Nursing Home Care

The OIG plans to conduct a mail survey of nursing home residents' family members to identify quality of-care issues that might be the basis for further investigations and prosecutions. Facilities should ensure that they have an effective grievance system in place for families.

6. Nursing Home Vacdnation Rates: State Initiatives

The OIG will also evaluate initiatives states have used to increase influenza and pneumococcal vaccination rates in nursing homes. The OIG will probably suggest ways to accelerate vaccination rates in nursing facilities.

7. Implementing the Skilled Nursing Facility PPS

The OIG will be conducting audits and reviews of providers to determine if claims are being properly calculated and documented. The OIG will also review Medicare contractors to ensure that they are performing claim edits and adjudications appropriately. Providers should immediately review their PPS billing process to ensure that all staff are properly completing assessments, along with supporting documentation and billing documentation such as UB-92s. Providers should consider implementing a compliance plan that reviews the billing process on a regular basis. (We will discuss compliance plans in greater detail in the next article in this series.)

8. Beneficiary Access to Skilled Nursing Facility Care

Despite a recent report by the OIG that PPS has not affected access to care, the OIG will be examining facilities to determine if any are refusing admission to individuals who are "too expensive" to care for. This initiative might tie into a current case being brought by the Office of Civil Rights, claiming that some facilities' decisions not to admit individuals with certain conditions is prohibited by the federal antidiscrimination statutes, such as the ADA. Facilities that have, in fact, made admission decisions that could be attributed to the individual's PPS reimbursement should consult with their attorneys to ensure that their policies are in conformance with federal law.

9. Financial Screening and Distinct Part Rules

HCFA has requested that the OIG review facilities' use of Medicaid distinct-part units and of financial screening of private-pay residents to refuse admission to Medicaid residents, or those who will be applying for Medicaid soon. Providers who employ these approaches should confer with their attorneys to ensure that their policies and practices conform with federal guidelines and law.

10. Routine Physician Nursing Home Visits

The OIG will be examining whether HCFA needs to establish controls over Medicare payments for routine nursing home visits by physicians. Investigations of this type almost always result in a report recommending additional controls and limits on services. Providers can expect a report from the OIG in 2001 that will probably be critical of routine nursing home visits and recommend significant limitations on them. Look for HCFA to consider implementing many of the recommendations in 2002. Providers need to ensure that physician visits are well documented and support that the care provided during these visits matches the level billed to Medicare. As with the OIG's initiative on medical directors, this initiative has significant implications for physicians, as well as nursing homes.

11. Therapy Services in Skilled Nursing Facilities

Providers can expect a significant increase in therapy service audits. In September 1999, the OIG issued a report that was critical of therapy provided in nursing homes under Medicare Part B, finding that 13% of physical and occupational therapy was improperly billed because "the services were not medically necessary and/or services were provided by staff who did not have the appropriate skill for the patient's medical condition." The General Accounting Office has also published several reports that have been critical of the delivery of therapy services in nursing homes. Providers should review and self-audit the therapy services provided for the past five years, and ensure that therapy currently being provided is being billed correctly and qualifies as medically necessary.

12. Ancillary Medical Supplies

The OIG will be review Medicare billing to determine if facilities are claiming unallowable costs for ancillary medical supplies. Providers should review the proper procedures for billing ancillary medical supplies with their billing departments. The OIG initiative could lead to additional restrictions on billing for ancillary medical supplies.

While some of these areas might only result in reports issued by the OIG, all are areas that the OIG considers problematic. By addressing these issues within your own facility, you can greatly reduce your potential liability. If you have concerns regarding any of these areas, you should contact your attorney.

Matthew J. Murer is an attorney with the firm of Duane, Morris & Heckscher, Chicago.