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9 Top OIG Physician Audit Targets In 2017

By Grant Huang, CPC, CPMA ,Director of Content at DoctorsManagement.

Next year, you’ll need to pay particular attention to your Medicare meaningful use attestation data, your providers’ Medicare credentialing, compliance with the “two-midnight” rule, and more, according to an analysis of the 2017 HHS Office of Inspector General (OIG) Work Plan by The Business of Medicine.

Below is a preliminary overview of the top nine OIG audit targets that impact physician practices in 2017.

  1. Medicare EHR bonus payments. CMS has doled out more than $20 billion in EHR incentive payments to physicians and hospitals. The OIG wants to intensify efforts to ensure that these payments went out to eligible providers and organizations that actually attested properly. The OIG will review CMS data on its incentive payments to “identify payments to providers that should not have received incentive payments (e.g., those not meeting selected meaningful use criteria).” The OIG also states that it will review all long-term plans by CMS to ensure accurate payments over the life of the meaningful use program. If your practice has received meaningful use payments, it may be a good idea to have your attestation data and records stored in one place in case you are subject to a CMS or OIG meaningful use audit.
  2. Review of physician and other provider enrollment. This audit target is a recurring one for the OIG and means that the agency will verify that your physicians and non-physician providers (including physician assistants and nurse practitioners) are properly enrolled in Medicare. Because Medicare’s enrollment process can be complex, it’s a good idea to sign into the Provider Enrollment, Chain and Ownership System (PECOS) to verify that your providers are fully credentialed and don’t have any outstanding issues, such as a revalidation request (CMS requires all providers to revalidate their enrollment with Medicare every few years).
  3. Payments for nebulizers and related drugs. An OIG review of Medicare payments for nebulizer machines and related inhalation drugs found that at least 50% of claims were improperly paid. Given the potential scope of the improper billing, the OIG will be reviewing claims for nebulizers and related drugs in 2017 to determine if documentation exists to fully support medical necessity.
  4. Effects of the “two-midnight” rule. The OIG wants to see whether hospitals are properly following the two-midnight rule implemented by CMS Oct. 1, 2013, to ensure that inpatient and outpatient payments are being properly made. The rule established inpatient payment as appropriate if physicians expected patients to last at least two midnights, other outpatient payment would be appropriate. While hospitals are the chief target, any physician who performs admissions should also pay heed to this target, since it’s their documentation that will be reviewed.
  5. Comparison of provider-based vs. freestanding clinics. OIG wants to see whether services billed under provider-based place of service (POS) codes such as POS 11 for office/outpatient are actually being rendered in free-standing settings, such as ambulatory surgery centers (ASCs). Because provider-based POS codes boost payment by factoring in greater overhead associated with professional services, they pay more for the same CPT codes. This could lend itself to abuse. Make sure your providers use the proper POS code (POS 24) when billing for services in the ASC setting.
  6. Prolonged services. When an E/M service far exceeds the typical visit time associated with the level of service, prolonged service CPT codes (99354-99357) may be billed with proper documentation. OIG will be reviewing claims for prolonged service codes to ensure that the services are medically necessary and that documentation requirements (including face time with patients) are being met.
  7. Payments for orthotic braces. Medicare payments for orthotic braces, including back and knee braces, have more than doubled since 2009; some types of knee braces have seen their payments triple in that time. OIG will take aggressive action to determine whether these payment increases are substantiated. OIG will compare Medicare payments for these braces to payments by private insurers to assess the scope of any possible wasteful spending.
  8. Necessity and documentation for orthotic braces. This audit target explicitly calls for the OIG to review Part B payments for orthotic braces, looking for medical necessity to be supported by documentation. The OIG believes that some DMEPOS suppliers are billing for unnecessary services, including patients receiving multiple braces, and cases where braces were billed for patients who were not seen by the referring physician.
  9. Part B payments for chiropractic services. Medicare Part B only pays for chiropractic manual manipulation of the spine to correct subluxation if there is a neuro-musculoskeletal condition that is covered. Chiropractic maintenance therapy is not covered because CMS has determined it does not meet medical necessity. OIG believes maintenance therapy is occurring in some cases where chiropractic manipulation is being billed. OIG inspectors will be reviewing claims to ensure compliance with the above policy.

— Grant Huang, CPC, CPMA ( The author is Director of Content at DoctorsManagement.