Nail Down the Office of Inspector General’s (OIGs) Role

Posted on 11 Sep, 2018 |comments_icon 0|By Elizabeth Debeasi

The Office of Inspector General (OIG) was formed in 1976 by President Gerald Ford through the Inspector General Act. Since then, the OIG has been key in fighting waste, abuse, and fraud in Medicare, Medicaid, and other Health and Human Services programs and is the largest inspector general’s office in the Federal Government. Their efforts are focused mostly on Medicare and Medicaid, which cover the most vulnerable beneficiaries. According to the OIG, their mission is to protect the integrity of the Department of Health and Human Services programs and the health and wellbeing of program beneficiaries.

OIG also identifies opportunities to improve the economy, effectiveness, and efficiency of the program, as well as going after individuals who violate Federal laws pertaining to healthcare. OIG operates as an independent and objective agency that provides oversight for components in certain programs and operations of the Department of Health and Human Services.

Get Familiar With the OIG Work Plan

More than 80% of the budget for Health and Human Services is allocated to Medicare, Medicaid, and the Children’s Health Insurance Program. Total spending for the fiscal year of 2017 was over one trillion dollars. This figure includes inpatient hospital, skilled nursing, home healthcare, hospice, physician services, and incentive payments. Half of the spending for 2017 was spent on Medicare services.

Knowledge is Power

Knowing the issues included in the Work Plan can help organizations to be prepared. A self-check may be performed to ensure that an organization is compliant. The current OIG Work Plan plus plans from previous years can be found at

Tip: The OIG Work Plan’s new, revised, removed, and ongoing issues should be included in an organization’s risk analysis plan!

OIG identifies areas that present the most risk

According to the OIG, some of the factors considered in their plan are based on required mandatory OIG reviews, concerns raised by Congress, the Office of Management and Budget, HHS management, HHS challenges with management and performance, implemented OIG recommendations from earlier reviews, potential for positive impact, and work performed by oversight organizations. In addition to new, ongoing, and updated issues, OIG also publishes completed tasks from previous years, and issues that were removed from the Work Plan.

Here are some areas of scrutiny mentioned in the Work Plan in February 2018:

State Medicaid Fraud Control Units FY 2017 Annual Report This annual report will analyze the statistical information that was reported by the MFCUs for FY 2017, describing in the aggregate the outcomes of MFCU criminal and civil cases. This report will also identify trends in MFCU case results and will report on significant developments for the MFCUs over the course of the year.
Review of Statistical Methods Within the Medicare Fee-for-Service Administrative Appeal Process OIG will determine whether the MACs and QICs are reviewing statistical estimates in an appropriate and consistent manner as part of the Fee-for-Service appeal process.
Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2016 Average Sales Prices This annual report will quantify the savings to Medicare and its beneficiaries that are a direct result of CMS’s price substitution policy based on 2016 ASPs and may offer recommendations for Medicare to achieve additional savings.

Issues addressed in the 2017 OIG Work Plan are still relevant. The following list summarizes those issues:

  • Medicare Part A
  • Legal and Investigative Activities-CMS
  • Medicare Part B
  • Health Resources and Services Admin
  • Medicare Part C
  • Indian Health Service
  • Medicare Part D
  • National Institutes of Health
  • Medicaid
  • Administration for Children and Families
  • Health Insurance Marketplace
  • Administration for Community Living
  • Electronic Health Records (EHR)
  • Other Health and Human Services
  • ü  Centers for Disease Control and Prevention

The 2017 OIG Work Plan items for Medicare Parts A and B included:

  • Provider Reimbursement of Hyperbaric Oxygen Therapy (HBO) Services
  • Reimbursement for Skilled Nursing Facility
  • Inappropriate Outlier Payments for Medical Assistance Days
  • Outlier Payments for Inpatient Psychiatric Facilities
  • Case Review of Inpatient Rehab Hospital Patients that are Not Suited for Intensive Therapy
  • Data Brief for Nursing Home Complaint Investigations
  • Adverse Event Screening Tool for Skilled Nursing Facilities
  • Unreported Incidents of Potential Abuse and Neglect for Skilled Nursing Facilities
  • Benefit Vulnerabilities and Recommendations for Improvement for Medicare Hospice Services
  • Hospice’s Compliance with Medicare Requirements Review
  • Assessment of the Quality of Care and Services of Hospice Home Care Frequency of Nurse On-site Visits
  • Comparison of HHA Survey Documents to Medicare Claims Data
  • Part B Services During Non-Part A Nursing Home Stays: Specifically, for DME
  • Mandatory Review of Medicare Market Share of Mail-order Diabetic Testing Strips
  • Supplier Compliance with Documentation Requirements for Frequency and Medical Necessity for Positive Airway Pressure Device Supplies
  • Mandatory Review of Medicare Payments for Clinical Diagnostic Laboratory Tests
  • Transitional Care Management Medicare Payment Review
  • Chronic Care Management Medicare Payment Review
  • Financial Interests Reported under the Open Payments Program Data Brief
  • Portfolio Report on Medicare Part B Payments for Power Mobility Devices
  • Single Use Vial Drug Wastage
  • Possible Savings from Inflation-Based Rebates in Medicare Part B
  • Review of Payments for Service Dates After Date of Death
  • CMS’s Implementation of the Quality Payment Program Management Review
  • Intensity-Modulated Radiation Therapy
  • Mandatory Review of National Background Checks for Long-Term-Care Employees
  • Supplier Compliance with Payment Requirements for Ambulance Services
  • Payment System Requirements for Inpatient Rehab Facilities
  • Supplier Compliance with Payment Requirements for Histocompatibility Laboratories

Keep Your Eye on These Hot Button Issues

A few of the hot button issues for Medicare Part A and B in 2017 were:

  • Hyperbaric oxygen therapy – Patients are given high concentrations of oxygen in a pressurized chamber. The patient will periodically breathe in 100% oxygen. This therapy assists with nonhealing wounds.

The NCD Manual outlines 15 covered conditions, and a patient must meet at least one condition to be approved for this therapy. OIG is determining if reimbursements for these conditions were in accordance with Federal requirements. The concerns from previous reviews include:

  • Noncovered conditions have been reimbursed
  • Documentation does not support the medical necessity for the therapy
  • Beneficiaries received more treatments than were medically necessary


  • Inpatient Psychiatric Facility Outlier Payments – Psychiatric treatments are provided to meet urgent needs of those involved in an acute mental health crisis, drug or alcohol related problem, or other mental illnesses. These treatments are usually provided in inpatient psychiatric facilities, freestanding hospitals, or specialized hospital-based units.

During the fiscal year of 2014 to 2015, the number of claims with outlier payments increased by 28%. Total Medicare payments topped $534.6 million for treatment that resulted in hospitalizations. These visits resulted in a cost increase of 19%. OIG will determine if the increase in inpatient facilities nationwide were in line with Medicare documentation, coding, and coverage.

  • Outpatient Outlier Payments for Short-Stay Claims – Typically, CMS will make an additional payment for outpatient hospital services when a hospital’s charges exceed the normal Medicare payment.

Previous OIG reports found that excessive outlier payments resulted from higher hospital charges that were unrelated to cost. OIG is still determining the extent of the potential Medicare savings for ineligible outlier payments.

Tip: Outlier payments are in place to ensure that a provider will share financial loss with Medicare for unusually expensive cases!

  • Drug Waste of Single Use Vial Drugs – The Federal Drug Administration (FDA) approves the vial sizes for certain single use drugs by manufacturers. They do not control the vial sizes submitted for approval. There may be a possible savings impact if some of the vial sizes that are available in other countries were made available in the US at lower prices.

The JW modifier is currently used for Part B drugs and biologicals when some of the drug is discarded, simply to track the amount of wasted drug that has been reimbursed. OIG will determine the amount of waste for 20 single use drugs that were reimbursed for waste at the highest level and will provide details specifying when a smaller vial size would have reduced waste.

  • Medicare Payments for Service Dates After Individuals’ Date of Death – The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) has outlined policies and put claims edits in place to safeguard that payments aren’t made for Medicare services rendered to deceased beneficiaries. OIG is reviewing policies and procedures to guarantee that no payments are made for deceased beneficiaries.

Tip: Billing and data entry errors may be a large part of the findings!

Again, be sure to review the Work Plan in its entirety to know and understand the key issues that have been outlined in the document. Auditors can utilize the Work Plan as a tool to identify areas that should be reviewed and for education points. In addition, the Work Plan should be incorporated into risk analysis plans for an organization to ensure awareness of the issues that OIG will target.

Learn More

Don’t wait for OIG to call foul. Learn how to identify and correct coding problems before third parties challenge your claims with Master Auditing Basics 2018 — updated for 2018 with the latest billing, coding, and compliance regulations and requirements.


Elizabeth Debeasi
Marketing Writer/ Editor

Elizabeth works on an array of projects at TCI, researching and writing about modern reimbursement challenges. Since joining TCI in 2017, she has also covered the nuts and bolts of cybersecurity, compliance with federal laws, and how to tap into the advantages of Telehealth services.

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