Incorporating the 2014 OIG Work Plan Into Your Annual Review Processes

The Health and Human Services Office of Inspector General (OIG) released its 2014 work plan on Jan. 31, an important guide for all health care providers in determining priorities for the year. The OIG has cited its annual work plan as a resource for monitoring risk areas for a compliance program in virtually all OIG compliance guidance documents since the first one was issued in 1998. Effective laboratory compliance programs include policies and procedures for monitoring and auditing to ensure compliance with laws and regulations. Those policies should include a review of the annual work plan and provide guidance for incorporating that review into the operation of the laboratory’s compliance plan. What’s in it for Labs In the 2014 work plan, laboratories are specifically mentioned in only one item: “Laboratory tests—Billing characteristics and questionable billing.” The OIG is concerned that tests paid for by government programs “are ordered by a physician or qualified nonphysician practitioner who is treating a beneficiary.” According to the OIG, Medicare’s payments for lab services in 2008 represented an increase of 92 percent over payments in 1998. Much of the growth in lab spending has resulted from the increased volume of ordered services, it says, noting that Medicare should only pay for those lab tests that are ordered by a physician or qualified nonphysician practitioner who is treating a beneficiary. The fact that the OIG is reviewing what it considers questionable billing indicates the OIG believes there are a significant number of tests that were not ordered by the treating physician or were not used in the treatment of a Medicare patient. The key element is documentation. In a post-payment laboratory audit, the laboratory documentation is often compared to the ordering physician or entity’s documentation and, if there is a discrepancy, the lab is determined to have received an overpayment unless it can demonstrate otherwise. Interestingly, a similar item was included in the 2013 work plan with the exception that it was limited to 2010 and was designated as a work in progress with the expected report identification of OEI-03-11-00730, the same identification used in the 2014 work plan. The same identification code was also used in the 2012 work plan for an item titled, “Trends in Laboratory Utilization.” All three work plan items cite the same Code of Federal Regulations section but at this time, no report with this designation has been issued. The laboratory compliance officer should consider some kind of review to ensure that billing processes are being monitored. If a periodic billing audit is already being conducted, make sure it includes a specific review addressing this risk. For instance, the audit could contain a requirement that a designated number of randomly selected review items include a request to the ordering physician or entity for the patient records related to the test orders for that item. The records from the office should be reviewed and compared to the order documents the lab received to determine if there are discrepancies in the documentation or other information that may indicate the order was not proper or was not used for a specific treatment purpose. These kinds of discrepancies are indications that a test is not reasonable and necessary and would be considered part of the medical necessity component of the lab’s compliance program. The government has implied that the medical necessity of claims submitted to its contractors for reimbursement will be the subject of future reviews. An improper order is a medical necessity issue. How to Use the Work Plan The laboratory compliance officer should have a policy or procedure that provides guidance for reviewing the work plan. This list shows how to identify potential risks for the laboratory that are not specifically identified as laboratory items:

1. Consider who the laboratory does business with and look for items in the work plan that may affect those individuals or entities that are related to their laboratory or diagnostic services usage. For labs, that potentially includes nursing homes, hospices, physician offices, hospitals, end-stage renal disease facilities, and home health agencies;
2. Review items related to other government agencies that have jurisdiction over laboratories like the Food and Drug Administration, the Office for Civil Rights, and the Centers for Disease Control and Prevention; and
3. Review previous work plans for similar items or to identify audit reports that may have been completed.

Once laboratory items are identified, the compliance officer should conduct a review of the laboratory’s policies and procedures in the risk area. If the risk cannot be established by this review, the compliance officer should conduct a probe audit to assess the risk and set a baseline. Depending on the outcome of the probe audit, the officer may want to conduct a more extensive audit or review, issue a report, make corrective action recommendations, and assign the project to an appropriate member of the lab’s compliance committee. Takeaway: The laboratory compliance officer can avoid compliance problems and help demonstrate that the laboratory compliance program is effective by having policies and procedures for reviewing the OIG annual work plan and having documentation of audits and reviews, along with their outcomes.