EDITOR’S NOTE: This is the second in a three-part series on the recently published FY 2015 OIG Work Plan. 

As discussed in our Nov. 6 article, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) Work Plan for the 2015 fiscal year was issued approximately two weeks ago. Last week we reported on the OIG’s planned efforts on Medicare Part A and B; we’ll talk this week about Medicare Part C and D. Our final article on the subject will cover the Medicaid Program.

We strongly encourage spending time comparing the projects in the 2015 work plan against your own organization’s practices as a risk assessment. The work plan is broken down into sections, which allows for an organized method of assigning responsibility for review of compliance within your organization. Because compliance is the responsibility of your governing body, it is essential that the new work plan be reviewed and your internal risk assessment be reported to the governing body for inclusion in its compliance plan.

As the OIG does periodically update its work plans, plan on revisiting its website regularly to stay current throughout the year as part of your ongoing compliance activity. The time spent in these proactive activities is a solid investment, as the OIG’s expected 2014 recoveries will total over $4.9 billion, including nearly $834.7 million in audit receivables and about $4.1 billion in investigative receivables.

The OIG was created to protect the integrity of HHS programs and well-being of beneficiaries by:

  • Detecting fraud, waste and abuse;
  • Identifying opportunities to improve program economy, efficiency, and effectiveness; and
  • Holding accountable those who do not meet program requirements or who violate federal healthcare laws.

This year’s work plan is 90 pages long, but the following highlights activities with the Medicare Part C and D program.

2015 Projects for Medicare Part C: 

Part C or Medicare Advantage (MA) plans involve monthly premiums and deductibles that are often less than what a beneficiary would pay under Medicare A and B. Organizations that provide MA are public or private, are under contract to the Centers for Medicare & Medicaid Services (CMS), and are licensed by states. In 2015, the OIG will examine the soundness of rates, risk adjustments, and payment adjustments in these MA programs, including the following:

Medicare Advantage (Part C) organizations’ compliance with Part C requirements: Payments to MA organizations from CMS is dependent on the health status of each beneficiary, so risk adjustment and correct diagnoses are important.

  • CMS oversight of data integrity: The OIG will review beneficiary encounter data from MA for consistency with what the MA communicated to CMS. In particular, the OIG will look at primary diagnosis data and risk adjustment data.
  • Sufficiency of documentation supporting diagnosis: The OIG will be auditing clinical documentation for supporting documentation of diagnoses submitted by the MA to CMS.

2015 Projects for Medicare Part D:

Medicare Part D coverage is coordinated through CMS and organizations called drug plan sponsors. Those sponsors must bid annually. The Medicare subsidy payments to the drug sponsors are calculated on the basis of their bids. The OIG will be focusing on the appropriate use of prescription drugs for patient safety, quality of care, and financial reasons. The OIG will be looking at prescribing policies and practices and the efficacy of protection from drug over-utilization and improper payments.

  • Medicare, sponsor, and manufacturer policies and practices
    • Savings potential of adjusting risk corridors: The OIG will analyze risk-sharing payments between Medicare and Part D sponsors for additional cost savings.
    • Sponsor compliance with Part D requirements
      • Documentation of administrative costs in sponsors’ annual bid proposals: The OIG will reviewing drug plan sponsors’ documentation of administrative costs in their annual bid proposals.
      • Sponsor reporting of direct and indirect remuneration: The OIG will review the drug plan sponsors reports of all remuneration, including rebates and subsidies from manufacturers and pharmacies.
      • Reopening of final payment determinations: The OIG will review any CMS decisions to allow for a reopening of final payment determinations. CMS allowed reopening of final payment determinations for 2007 and 2008 as late as the 2013 calendar year. Those reopenings allow drug plan sponsors to resubmit direct and indirect reimbursement data that would increase the final payment determinations.
      • Ensuring dual eligibles’ access to drugs under Part D. The Patient Protection and Affordable Care Act (PPACA) requires the OIG to annually review drug plan sponsors’ formularies to look at variations in prescription drug coverage and drug utilization tools from the Medicare Part D formulary, which is created to adapt to a dual-eligible beneficiary’s needs.
      • Oversight of conflicts of interest: The OIG will look at CMS and its efforts to improve oversight of drug plan sponsors’ conflict-of-interest procedures. Federal law requires that prescription drug coverage decisions be made on the basis of scientific evidence and standards of practice rather than for the purpose of financial gain.
      • Documentation of pharmacies’ prescription drug event data: The OIG will continue its reviews of selected retail pharmacies that have been identified as having questionable Part D billing and are requiring drug plan sponsors to submit any required documentation in these reviews.
      • HIV drugs for deceased beneficiaries: The OIG will investigate payments for human immunodeficiency virus (HIV) drugs that were made for medications dispensed after the beneficiary’s death.
      • Quality of sponsor data used in calculating coverage-gap discounts: Medicare is required by the PPACA to create a coverage gap discount program, and drug plan sponsors must track beneficiary payment information and drug cost data upon which eligibility for the discounts is based. The OIG will review this data to determine if beneficiary payments were correct and if amounts paid to sponsors are appropriate.

Part D Billing and Payments:


For the 2014 fiscal year, the OIG excluded more than 4,000 individuals and entities from federal healthcare programs and filed almost 1,000 criminal actions and more than 500 civil actions, including those associated with false claims. By publishing its work plan early in the fiscal year, the office hopes to educate healthcare providers, limit fraud, and protect the interests of beneficiaries. This includes parts of the work plan not covered in this report that lays out oversight of Medicaid programs and legal and investigative activities such as self-disclosure, whistle-blowers, and other fraud and abuse information vital to all providers.

While the work plan is not an easy read, the time invested in comparing planned OIG work projects against your organization’s current work processes may reduce claims denials, increase potential reimbursement, limit re-work, and prevent fraud investigations.

The OIG annually publishes its work plan by Oct. 31 for the fiscal year starting on Oct. 1. The report is available on the OIG’s website at http://oig.hhs.gov.

About the Arthurs

Elizabeth Lamkin, MHA, is CEO of PACE Healthcare Consulting, LLC in Hilton Head S.C. After 20 years as a highly innovative hospital CEO, she now brings effective solutions to all types of hospitals and healthcare providers. She is a nationally known speaker and author on billing compliance including CMS Recovery Auditors. She has two books on RAC published in 2011 through.  The RAC Toolkit for Hospitals and Health Systems and The RAC Toolkit for Physician Practices are available at Amazon books. 

Patricia Hildebrand is a seasoned healthcare professional with more than 25 years in the industry.  She consults on regulatory compliance, risk, QAPI, and physician performance Patricia is a Lean Six Sigma Black Belt, a certified coder and ICD10 trainer, a CPHQ, CPHRM, HACP and a fellow in the ACHE.  She is a national speaker on ICD-10 and patient centered medical homes, and a publisher author for nurse practitioners.

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