OIG workplan zeroes in on inappropriate discharge

The Health and Human Services’ (HHS) Office of Inspector General (OIG) Workplan for FY 2002 strongly suggests that the OIG’s next emphasis is going to be on discharge patterns such as inappropriate discharge and readmissions, and inappropriate transfers from acute care settings to other units.

Health care attorney Craig Holden of Ober Kaler in Baltimore predicts these areas may well represent the next national projects. He notes that all of the existing national enforcement initiatives, such as pneumonia upcoding and the Physicians at Teaching Hospital (PATH) investigation are in their final stages. Several states still are working on laboratory cases, and there are several ongoing PATH settlements, he adds, but those investigations are winding down.

Robert Homchick, a partner with Davis Wright in Seattle, agrees that the area of transfers and discharge is a predominant theme in the new workplan, particularly in the hospital environment. Not only are areas such as one-day stays targeted for scrutiny, but so are transfers within related parts of the system such as from an acute-care hospital to a rehab hospital or a skilled nursing facility within the same system, notes Homchick. "Hospitals should continue to monitor the transfer discharge process and length of stay and intensities to make sure they are operating appropriately without any trends," he says.

On the whole, however, it is somewhat more difficult to determine exactly what the OIG will actually stress, because the breadth and scope of the work plan is greater than in the past, warns Paul DeMuro, a partner in the West Coast office of Latham and Watkins. "I found it almost less helpful than in years past because you could tell less from it," he explains. "There is something here for everybody, and it would be hard to pick the top 10 or 15 areas."

DeMuro also notes that there is a higher percentage of items included in the workplan, such as restraint and seclusion at psychiatric hospitals, which are not Medicare reimbursement or fraud specific. That initiative comes up because of conditions of participation rather than direct reimbursement, he explains. The OIG’s latest workplan highlights these specific areas:

  • One-day hospital stays. The OIG plans to evaluate controls designed to ensure the reasonableness of Medicare payments for beneficiaries discharged after only one day in the hospital. It says it plans to concentrate on the adequacy of controls to detect and deny inappropriate payments for one-day stays.
  • Hospital discharges and subsequent readmissions. The OIG plans a series of reviews that will examine Medicare claims for beneficiaries who were discharged and subsequently readmitted relatively soon to the same or another acute care prospective payment system hospital. Along with the Centers for Medicare and Medicaid Services, the OIG will determine if these claims were appropriately paid and examine the adequacy of existing system edits used to identify and review diagnosis and/or time-related admissions.
  • Consecutive inpatient stays. The OIG will look at the extent to which Medicare beneficiaries receive acute care and postacute care through sequential stays in different settings such as skilled nursing facilities, long-term care hospitals, and prospective payment system-exempt units. The OIG notes that inpatient services may be denied based on peer review organization review for patients admitted unnecessarily for one stay or multiple stays.
  • Payments to acute-care prospective payment system (PPS) hospitals. This update will examine diagnosis-related groups (DRGs) that have a history of abusive coding to determine whether some PPS hospitals continue to exhibit aberrant coding patterns. The study will incorporate the results of a recent review by the Payment Error Prevention Program on DRGs with significant patterns of coding errors.

The OIG also plans to examine the implementation of the critical access hospital program, which allows certain limited-service hospitals to be reimbursed for acute care on a cost basis rather than a prospective payment basis, and the effectiveness of CMS payment safeguard protections surrounding satellite units and "hospitals-within-hospitals."