The Office of Inspector General (OIG) for the U.S. Department of Health and Human services (HHS) recently did a podcast on hospital compliance programs. The podcast included Jeannette Gaughan, Senior Auditor for the Office of Audit Services in Boston, who spoke Kim Rapoza, an Audit Manager in Boston. The Office of Audit Services has done many hospital reviews in the last three years, as part of our Hospital compliance initiative.
Previously, OIG issued several Compliance Guidance documents for hospitals, the first in 1998 and a supplemental guidance in 2005.
In 2010, the audit office began reviewing acute-care hospitals by looking at many risk areas during an audit rather than focusing on one risk area. OIG was able to identify these risk areas because it increased its data storage, computer matching and data analysis capabilities.
One example of a risk area would be incorrectly billed transfers from acute-care hospitals to post-acute settings, like skilled nursing facilities. OIG can match skilled nursing facility claims to hospital claims to determine if the hospital billed the transfer claim correctly.
The majority of providers have responded positively to this kind of review, Rapoza said. Hospital compliance officers have been following the published audit reports on OIG’s website and have been preparing for these types of audits. They’ve used OIG’s reports to educate their staff and enhance their billing procedures to comply with Medicare rules and regulations.
In the beginning, OIG’s audit reviews focused on about 27 hospital billing issues that OIG flagged over the last 20 years. Over time, OIG learned from experience and added new billing issues. OIG also added a contract for medical review to help us with claims that require a medical professional’s opinion.
OIG focuses on hospitals for several reasons. The first is that payments to acute-care hospitals make up about 45 percent of all Medicare fee-for-service payments. This was roughly $151 billion dollars for 2011. The second reason is that hospital billing is very complex, making it prone to errors.
OIG has completed reviews of 79 hospitals across the country and recovered about $34 million dollars. OIG is actively working with another 25 hospitals right now. OIG said it does not plan to review all 3,600 acute-care hospitals because they do not have the resources to visit them all or review all of their claims.
OIG chooses hospitals based on data analysis, discussions with Medicare contractors, or based on other OIG work. As this initiative has matured, OIG has started to include statistical sampling to draw conclusions about a larger portion of the hospital’s claims.
Rapoza then listed several factors hospitals, and their compliance officers take from these reviews?
- Hospitals should know first and foremost that OIG appreciates their cooperation.
- Secondly, hospitals should keep in mind that these reviews are based on data from their Medicare claims and that each hospital review is unique. Because of this second factor, OIG reviews different risk areas at different hospitals and use both statistical and non-statistical methods for selecting our samples.
“Hospital compliance officers should use these reviews to involve and engage hospital management, governing boards and audit committees. It’s important for management to create a culture of compliance in their hospital.”
In the next 3-5 years, Rapoza hopes that the Hospital compliance initiative improves hospital billing and reduces the number of billing errors. OIG also expects hospital compliance staff to proactively identify problems and return Medicare dollars billed in error.
Ultimately, the Hospital compliance initiative will adapt to new Medicare rules and regulations as well as new hospital billing patterns. The key to this initiative is the flexibility to increase its effectiveness and achieve its goals. Finally, OIG said it will expand these reviews to other types of providers.