The Office of Inspector General (OIG) is administered by the Secretary of Health and Human Services (HHS). There are six offices within HHS OIG:

• The Immediate Office of the Inspector General (IOIG),
• The Office of Audit Services (OAS),
• The Office of Evaluation and Inspections (OEI),
• The Office of Investigations (OI),
• The Office of Council to the Inspector General (OCIG), and
• The Office of Management and Policy (OMP).

The following is the OIG’s published mission:

Our mission, as mandated by the Inspector General Act of 1978, 5 U.S.C. App., is to conduct and supervise audits and investigations relating to the programs and operations of HHS; provide leadership and coordination and recommend policies for activities designed to promote economy, efficiency, and effectiveness in the administration of, and to prevent and detect fraud and abuse in, such programs and operations; and provide a means for keeping the Secretary of HHS and Congress informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action.

The OIG reports both to the HHS Secretary and to Congress.  The OIG's essential tasks are conducted through a nationwide network of audits, investigations, and inspections performed by the following OIG components:

1. The OI is responsible for conducting and coordinating criminal, civil and administrative investigations related to fraud, waste and abuse in more than 300 HHS programs including Medicare and Medicaid. The OI coordinates their fraud and abuse efforts with the Department of Justice (DOJ) and other law enforcement authorities across the country. These investigations may lead to criminal convictions, administrative sanctions and or Civil Monetary Penalties (CMPs).
   
   
2. The OAS provides auditing services for HHS, by conducting audits with its own audit resources and overseeing audit work done by others. These audits examine the performance of HHS programs its grantees and contractors in carrying out their respective responsibilities. The goal of these audits is to help reduce waste, abuse, and mismanagement and promote economy and efficiency.
   
   
3. The OEI conducts national evaluations to provide HHS, Congress, and the public with timely, useful, and reliable information on significant issues. These evaluations focus on preventing fraud, waste, or abuse and promoting economy, efficiency, and effectiveness of departmental programs. OEI reports also present practical recommendations for improving program operations.
   
   
4. The OCIG provides general legal services to OIG, rendering advice and opinions on HHS programs and operations and providing all legal support for OIG's internal operations. OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS programs, including the False Claims Act, program exclusion, and CMP cases. In connection with these cases, OCIG also negotiates and monitors corporate integrity agreements. OCIG renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other guidance to the health care industry concerning the anti-kickback statute and other OIG enforcement authorities

OFFICE OF INSPECTOR GENERAL ORGANIZATION CHART

EXCLUSIONS PROGRAM  

The OIG’s Exclusions Program was implemented to protect Medicare and Medicaid beneficiaries and to prevent certain individuals and businesses from participating in federally funded healthcare programs.  Providers and other individuals may be excluded from the Medicare and Medicaid programs for a variety of reasons including convictions for program-related fraud and patient abuse, licensing board actions and default on Health Education Assistance Loans.

Congress first mandated the exclusion of physicians and other practitioners convicted of program-related crimes from participation in Medicare and Medicaid in 1977, in the Medicare-Medicaid Anti-Fraud and Abuse Amendments, Public Law 95-142, this has since been codified in section 1128 of the Act.

In 1981 the Civil Monetary Penalties Law (CMPL), Public Law 97-35, authorized the Department and the OIG to impose Civil Monetary Penalties (CMPs), assessments and program exclusions against individuals and entities who submit false or fraudulent, or otherwise improper claims for Medicare or Medicaid payment.

The Medicare and Medicaid Patient and Program Protection Act of 1987, Public Law 100-93, the Health Insurance Portability and Accountability Act (HIPAA) of 1996, and the Balanced Budget Act (BBA) of 1997 further expanded and revised the OIG's Exclusion Program and sanction authority. The BBA authorized CMPs to be imposed against providers that employ or enter into contracts with excluded individuals for the provision of services or items to Federal program beneficiaries

Through this provision providers and entities that hire or contract with excluded individuals or entities to provide items or services to Federal program beneficiaries may be subject to a civil monetary penalty (CMP) of up to $10,000 for each service or item furnished by the excluded entity and an additional penalty of up to three times the amount claimed as well as possible exclusion themselves.

The OIG lists the following effects of exclusion:

• No payment will be made by any Federal health care program for any items or services furnished, ordered, or prescribed by an excluded individual or entity. Federal health care programs include Medicare, Medicaid, and all other plans and programs that provide health benefits funded directly or indirectly by the United States (other than the Federal Employees Health Benefits Plan). For exclusions implemented prior to August 4, 1997, the exclusion covers the following Federal health care programs: Medicare (Title XVIII), Medicaid (Title XIX), Maternal and Child Health Services Block Grant (Title V), Block Grants to States for Social Services (Title XX) and State Children's Health Insurance (Title XXI) programs.
  
  
• No program payment will be made for anything that an excluded person furnishes, orders, or prescribes. This payment prohibition applies to the excluded person, anyone who employs or contracts with the excluded person, any hospital or other provider where the excluded person provides services, and anyone else. The exclusion applies regardless of who submits the claims and applies to all administrative and management services furnished by the excluded person.
  
  
• There is a limited exception to exclusions for the provision of certain emergency items or services not provided in a hospital emergency room.
  See regulations at 42 CFR 1001.1901(c)

Prior to hiring an individual or contracting with an agency verify that they have not been excluded from Federal programs by searching the online OIG List of Excluded Individuals.

THE OIG WORKPLAN

The OlG publishes a yearly Work Plan identifying various projects to be addressed during the fiscal year by the Office of Audit Services, Office of Evaluation and Inspections, Office of Investigations, and Office of Counsel to the Inspector General. The OIG Work Plan includes projects planned in the Centers for Medicare & Medicaid Services (CMS) as well as other departments.

A review of the Work Plan will tell you what the OIG is focusing on and will help to identify vulnerabilities and risks in your practice. The OIG description of the target areas provides information on the potential problem as seen by the OIG, and the scope and timeline of their investigation.

The 2009 OIG Work Plan includes the following Medicare and Medicaid areas deemed “most worthy of attention” in 2009:

Hospital Ownership of Physician Practices

We will review the appropriateness of Medicare reimbursement to hospital-owned physician practices that have the provider-based designation. In October 2005, CMS revised Federal regulations at 42 CFR § 413.65 to delineate requirements for hospitals to obtain provider-based designation for purchased physician practices. These requirements address such issues as the physical location of the entity, the patient population served, and the types of controls and governance exhibited by the hospital over the physician practice. Under the Hospital Outpatient Prospective Payment System (OPPS), hospitals may receive Medicare reimbursement for outpatient services in provider-based practices at amounts greater than CMS’s Medicare Physician Fee Schedule (MPFS). We will determine whether hospitals have met the Federal requirements to obtain the provider-based designation and assess the impact of the increased cost to Medicare as a result of reimbursement under the OPPS for physician services in provider-based practices. We will also determine the extent to which hospital-owned physician practices without provider-based designation improperly received reimbursement under the OPPS.

(OEI; 00-00-00000; expected issue date: FY 2009; new start)

Medicare Secondary Payer

We will review Medicare payments for beneficiaries who have other insurance. Pursuant to the Social Security Act, § 1862(b), Medicare payments for such beneficiaries are required to be secondary to certain types of insurance coverage. We will assess the effectiveness of current procedures in preventing inappropriate Medicare payments for beneficiaries with other insurance coverage. For example, we will evaluate procedures for identifying and resolving credit balance situations, which occur when payments from Medicare and other insurers exceed the providers’ charges or the allowed amount.

(OAS; W-00-08-35317; various reviews; expected issue date: FY 2010; work in progress)

Physician Billing for Medicare Hospice Beneficiaries

We will review the extent of Part B billing for physician services provided to Medicare hospice beneficiaries. The regulations at 42 CFR § 418.304 list the physician services that are already covered by Medicare under the hospice benefit. The regulation provides that, for physicians employed by or in an arrangement with the hospice, payments for certain services are reimbursed to the hospice as part of the hospice payment, while other services are paid to the hospice under the Part B MPFS. Physicians may receive reimbursement for hospice services under Medicare Part A or Part B. This study is a follow-up to recent OIG studies on hospice care. We will determine the frequency of and total expenditures for physician services under Part A and Part B for hospice beneficiaries. We will identify whether physicians double-billed hospice services to Part A and Part B.

(OEI; 00-00-00000; expected issue date: FY 2009; new start)

Place of Service Errors

We will review physician coding of place of service on Medicare Part B claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments. Federal regulations at 42 CFR § 414.22(b) (5) (i) (B) provide for different levels of payments to physicians depending on where the services are performed. Medicare pays a physician a higher amount when a service is performed in a nonfacility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ASC. We will determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments.

(OAS; W-00-08-35113; various reviews; expected issue date: FY 2009; work in progress)

Medicare Practice Expenses Incurred by Selected Physician Specialties

We will review the actual expenses of selected physician specialties. Physician services include medical and surgical procedures, office visits, and medical consultations. Physicians are paid for services pursuant to the MPFS, which covers the major categories of costs including the physician professional cost component, malpractice costs, and practice expense. The Social Security Act, § 1848(c)(1)(B), defines “practice expense” as the portion of the resources used in furnishing the service that reflects the general categories of expenses, such as office rent, wages of personnel, and equipment. We will determine whether Medicare payments for physician services performed by selected specialties are comparable to the actual expenses incurred by the physicians in providing services and operating their practices.

(OAS; W-00-09-35219; various reviews; expected issue date: FY 2009; new start)

Physicians’ Medicare Services Performed by Nonphysicians

We will review services physicians bill to Medicare but do not perform personally. Such services, called “incident to,” are typically performed by nonphysician staff members in physicians’ offices. The Social Security Act, § 18610(s) (2) (A), provides for Medicare coverage of services and supplies performed “incident to” the professional services of a physician. However, these services may be vulnerable to overutilization or put beneficiaries at risk of receiving services that do not meet professionally recognized standards of care. We will examine the qualifications of nonphysician staff that perform “incident to” services and assess whether these qualifications are consistent with professionally recognized standards of care.

(OEI; 09-06-00430; expected issue date: FY 2009; work in progress)

Medicare Payments for Unlisted Procedure Codes

We will review the accuracy of Medicare payments for services billed using unlisted procedure codes. Unlisted procedure medical codes are miscellaneous codes used by service providers only when there are no specific Healthcare Common Procedure Coding System (HCPCS) codes that accurately identify the medical service furnished. The Social Security Act, § 1848(a) (1), establishes the MPFS, which provides a payment amount for almost all HCPCS codes, as the basis for Medicare reimbursement for physician services. However, unlisted procedure codes are not paid under the fee schedule. The Medicare contractors that process such claims suspend them for individual review and manual pricing. We will examine provider usage of procedure codes for services not listed in the HCPCS.

(OEI; 00-00-00000; expected issue date: FY 2010; new start)

Medicare Billings With Modifier GY

We will review the appropriateness of providers’ use of modifier GY on claims for services that are not covered by Medicare. CMS’s “Medicare Carriers Manual,” Pub. No. 14-3, pt. 3, § 4508.1, states that modifier GY is to be used for coding services that are statutorily excluded or do not meet the definition of a covered service. Beneficiaries are liable, either personally or through other insurance, for all charges associated with the provision of these services. Pursuant to CMS’s “Medicare Claims Processing Manual,” Pub. No. 100-04, ch. 1, § 60.1.1, providers are not required to provide beneficiaries with advance notice of charges for services that are excluded from Medicare by statute. As a result, beneficiaries may unknowingly acquire large medical bills that they are responsible for paying. In FY 2006, Medicare received over 53 million claims with a modifier GY and denied claims totaling over $400 million. We will examine patterns and trends for physicians’ and suppliers’ use of modifier GY.
(OEI; 00-00-00000; expected issue date: FY 2009; new start)

Medicare Payment for Chemotherapy Drug Administration Services
 
We will review Medicare payments for chemotherapy drug administration services pursuant to the Social Security Act, § 1832, that occur without corresponding chemotherapy administration drug claims. MedPAC found that Medicare payments for chemotherapy drug administration services increased 217 percent between 2003 and 2004, while payments for chemotherapy drugs increased only 4 percent. We will examine whether billing for chemotherapy administration codes are proper, based on documentation associated with the claims data.

(OEI; 09-08-00190; expected issue date: FY 2009; work in progress)

Laboratory Test Unbundling by Clinical Laboratories

We will review the extent to which clinical laboratories have inappropriately unbundled laboratory profile or panel tests to maximize Medicare payments. Pursuant to the “Medicare Claims Processing Manual,” Pub. No. 100-04, ch. 16, § 90, to ensure the accuracy of payments, Medicare contractors must group together individual laboratory tests that clinical laboratories can perform at the same time on the same equipment and then consider the price of related profile tests. Payment for individual tests must not exceed the lower of the profile price or the total price of all the individual tests. We will determine whether clinical laboratories have unbundled profile or panel tests by submitting claims for multiple dates of service or by drawing specimens on sequential days. We will also determine the extent to which the Medicare carriers have controls in place to detect and prevent inappropriate payments for laboratory tests.

(OAS; W-00-09-35222; various reviews; expected issue date: FY 2010; new start)

Monitoring Medicare Part B Drug Prices: Comparing Average Sales Prices to Widely Available Market Prices

We will periodically review WAMPs for selected prescription drugs covered by Part B and compare them to ASPs for those drugs. In 2005, Medicare began paying for most Part B drugs using a new methodology based on the ASP. The Social Security Act, § 1847A(d), enacted by section 303(c)(1) of the MMA, mandates that OIG compare ASPs to WAMPs (if any) for Part B drugs and notify the Secretary, at such times as the Secretary may specify, if the ASP for a selected drug exceeds the WAMP by a threshold of 5 percent. We will compare ASPs to WAMPs and identify drug prices that exceed the threshold.

(OEI; 00-00-00000; various studies; expected issue date: FY 2009; new start)

Monitoring Medicare Part B Drug Prices: Comparing Average Sales Prices to Average Manufacturer Prices

We will periodically review Medicare Part B drug prices by comparing ASPs to AMPs. In 2005, Medicare began paying for most Part B drugs using a new methodology based on the ASP. The Social Security Act, § 1847A(d), enacted by section 303(c)(1) of the MMA, mandates that OIG compare ASPs to AMPs for Part B drugs and notify the Secretary, at such times as the Secretary may specify, if the ASP for a selected drug exceeds the AMP by a threshold of 5 percent. We will compare ASPs to AMPs for Part B drugs and identify drug prices that exceed the threshold.

(OEI; 03-08-00530; 03-08-00450; various studies; expected issue date: FY 2009; work in progress)

Variation of Laboratory Pricing

We will review the extent of variation in laboratory test payment rates among Medicare contractors. The Social Security Act, § 1833(h), requires the Secretary to establish a payment fee schedule for clinical diagnostic laboratory tests. In 2007, Medicare payments for laboratory services exceeded $6 billion. Prior OIG work found that Medicare had paid significantly higher prices than other payers for certain laboratory tests. We will analyze claims data to determine pricing variances among Medicare contractors for the most commonly performed tests.

(OEI; 05-08-00400; expected issue date: FY 2009; work in progress)

Providers Billing More Time Than Is Feasible in a Day

We will review services provided by physicians to determine whether claims are submitted for more time than is feasible in a day. Prior partnership audits in one State identified significant improper claims submission and service upcoding by physicians. We will analyze provider claims to identify providers with potential billing problems.

(OAS; W-00-09-31137; various reviews; expected issue date: FY 2009; new start)

Medicare/Medicaid Credit Balances

We will review providers, including independent laboratories and hospitals, to determine whether there are Medicare/Medicaid overpayments in patient accounts with credit balances. For Medicare, the Social Security Act, § 1862(b), and 42 CFR pt. 411 require participating providers to furnish information about payments made to them and to refund any monies incorrectly paid. For Medicaid, the Social Security Act, § 1902(a)(25), regulations at 42 CFR pt. 433, subpart D, and various State laws require that Medicaid be the payer of last resort and that providers identify and refund overpayments received. Prior OIG work has identified Medicare/Medicaid overpayments in patients’ accounts with credit balances.

(OAS; W-00-08-31311; various reviews; expected issue date: FY 2009; work in progress)

States’ Accountability Over Medicaid Drug Rebate Programs

We will conduct follow-up reviews to determine whether States have established adequate accountability and internal controls over their Medicaid drug rebate programs. Federal regulations at 45 CFR § 433.32 require that financial management systems provide for effective control over and accountability for all funds, property, and other assets. During our follow-up reviews, we will review State Medicaid agencies’ collection of brand-name drug manufacturer rebates for physician-administered drugs since the passage of the DRA. Pursuant to section 6002 of the DRA, States are required to collect data necessary to enable them to collect rebates on physician-administered drugs. Previous OIG work found that the majority of States were not collecting Medicaid rebates for physician-administered drugs and that most States had weaknesses in accountability and internal controls over their drug rebate programs. We will determine whether States have established adequate internal controls over their Medicaid drug rebate programs. We will also determine whether State Medicaid agencies followed Federal regulations when collecting brand-name drug manufacturer rebates for physician-administered drugs.
(OAS; W-00-07-31205; W-00-08-31205; various reviews; expected issue date: FY 2009; work in progress)

HEALTH CARE FRAUD

The OIG continues to focus on the investigation of fraud committed against the Medicare and Medicaid programs. The OIG performs investigations in conjunction with other law enforcement agencies, such as the Federal Bureau of Investigation (FBI), the United States Postal Inspection Service, the Internal Revenue Service (IRS), and State Medicaid Fraud Control Units (MFCU).

OIG actively investigates individuals, facilities, or entities that bill or are alleged to have billed Medicare and/or Medicaid for services not rendered, claims that manipulate payment codes in an effort to inflate reimbursement amounts, and false claims submitted to obtain program funds. The OIG also investigates business arrangements for violations of the Federal health care anti-kickback statute and the statutory limitation on self-referrals by physicians.