The Department of Health and Human Services Office of Inspector General (OIG) has officially released its Work Plan for Fiscal Year 2012. This annual document is a critical resource for healthcare providers, legal counsel, and compliance officers. It outlines the specific areas the agency intends to audit, evaluate, and investigate over the coming twelve months.
For years, the OIG has relied on traditional whistleblowers and random audits to identify fraud and abuse. However, this year’s plan signals a sophisticated shift in strategy. The agency is increasingly leveraging advanced data mining techniques to proactively identify outliers and suspicious billing patterns.
The Rise of Data-Driven Enforcement
The most significant takeaway from the FY 2012 Work Plan is the OIG’s growing reliance on data analytics. By analyzing vast troves of Medicare and Medicaid claims data, the agency can now pinpoint providers whose billing behaviors deviate significantly from their peers. This “virtual” oversight allows the OIG to target its resources more effectively than ever before.
Providers who consistently bill at the highest levels or show unusual spikes in service volume are now automatically flagged for review. This approach minimizes the randomness of audits and increases the likelihood that an investigation will yield a recovery. The message to the industry is clear: you do not need a whistleblower to be on the government’s radar; your own claims data can tell the story.
Targeting “Cloned” Documentation in EHRs
A major new area of focus involves the use of Electronic Health Records (EHRs). While the federal government has incentivized the adoption of EHRs to improve efficiency, the OIG is concerned that these systems are facilitating documentation fraud. Specifically, the Work Plan highlights the practice of “cloning” medical records.
“Cloning” refers to the cutting and pasting of notes from one patient visit to another, or from one patient’s record to another’s. This practice creates the appearance of comprehensive documentation without the actual medical work to support it. The OIG warns that this can lead to claims for services that were not medically necessary or accurately described.
Auditors will be looking for identical notes across multiple patient records, which is a hallmark of this shortcut. Providers using EHR systems must ensure that their efficiency tools do not compromise the integrity of the medical record. Customization and accuracy for each specific encounter remain the standard for reimbursement.
Scrutiny on Evaluation and Management Services
Evaluation and Management (E/M) codes describe the standard office visits and consultations that form the backbone of physician billing. In FY 2012, the OIG plans to aggressively review these claims to identify trends in coding. The agency suspects widespread “upcoding,” where providers bill for more complex and expensive visits than were actually furnished.
The data mining capabilities mentioned earlier will be instrumental in this initiative. The OIG will compare a physician’s E/M coding patterns against national averages for their specialty. Those who fall into the upper percentiles of high-level codes will likely face increased scrutiny.
It is essential for practices to conduct internal audits of their E/M coding. Documentation must support the level of service billed, particularly for the most expensive codes. Subjective interpretations of “medical decision making” often lead to disputes, so clear and specific clinical notes are the best defense.
Hospital and Facility Compliance Risks
Hospitals also face renewed attention in several key areas. The OIG is continuing its review of provider-based status for inpatient and outpatient facilities. This designation often results in higher reimbursement rates, and the agency wants to ensure that facilities claiming this status strictly meet all federal requirements.
Additionally, the Work Plan includes a focus on hospital readmissions. The OIG will analyze claims to determine the extent to which readmissions are occurring due to premature discharge or substandard care during the initial stay. This aligns with broader healthcare reform efforts to penalize hospitals for excessive readmission rates.
The agency is also examining the accuracy of “present-on-admission” indicators. These indicators are crucial for determining whether a condition is a hospital-acquired condition (HAC), which Medicare does not pay for. Inaccurate reporting here can lead to significant overpayments.
Home Health and Hospice Vulnerabilities
The home health sector remains a high-priority target due to a history of fraud and improper payments. The OIG plans to identify home health agencies with high error rates and unusual billing characteristics. This includes reviewing claims for beneficiaries who have no history of interaction with the referring physician.
Hospice care is similarly under the microscope. The Work Plan indicates a focus on marketing practices and financial relationships between hospices and nursing homes. There is concern that some hospices may be enrolling patients who are not terminally ill or offering kickbacks to nursing facilities in exchange for referrals.
Preparing for the Year Ahead
The FY 2012 Work Plan is not just a list of threats; it is a roadmap for compliance. Healthcare organizations should use this document to update their own internal audit plans. If the OIG is looking at a specific issue, your compliance department should be looking at it first.
Proactive monitoring is the only viable defense in this new era of data transparency. Providers must understand what their data looks like to the government. Identifying and correcting an error internally is far less costly than resolving a federal investigation.
As the government’s tools become sharper, the margin for error shrinks. The “pay and chase” model of the past is being replaced by a model of prediction and prevention. Compliance programs must evolve to meet this challenge head-on.
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