2015 OIG Work Plan Offers Clues to Future of Reimbursement

The crystal ball of reimbursement policy is often cloudy, but hints of coming change abound for those who know where to look. The Department of Health and Human Services Office of Inspector General (OIG) has laid out its 2015 focus areas in its annual Work Plan, and  a close reading provides  an idea as to what the future holds for Medicare and Medicaid reimbursement.

According to the OIG, approximately 76 percent of its funding is dedicated to the oversight of Medicare and Medicaid, and OIG activities relative to its 2014 Work Plan were quite significant from both a financial and a regulatory action perspective. The following is excerpted from the Work Plan itself:
For FY 2014, we reported expected recoveries of over $4.9 billion, consisting of nearly $834.7 million in audit receivables and about $4.1 billion in investigative receivables, which include about $1.1 billion in non-HHS investigative receivables resulting from our work in areas such as the States’ shares of Medicaid restitution. We also identified about $15.7 billion in savings estimated for FY 2014 on the basis of prior period legislative, regulatory, or administrative actions that were supported by OIG recommendations.

Such estimates generally reflect third-party projections (such as those by the Congressional Budget Office or HHS actuaries) made at the time the action was taken. Actual savings may be higher or lower.

We reported FY 2014 exclusions of 4,017 individuals and entities from participation in Federal health care programs; 971 criminal actions against individuals or entities that engaged in crimes against HHS programs; and 533 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, CMP settlements, and administrative recoveries related to provider self-disclosure matters.

For comparative purposes, in fiscal year 2013, the OIG initiatives resulted in $5.8 billion in recoveries, $19.4 billion in estimated savings from recommendations, 3,214 individual and entity program exclusions, 960 criminal actions and 472 civil actions. These initiatives are obviously quite lucrative for the federal government and very severe for those found to be guilty of violating rules and regulations. As a result, those in the healthcare industry can expect continued vigorous investigations and prosecutions of perceived violations.

The OIG will continue to focus on the integrity of Medicare and Medicaid payments in 2015. This is where a large percentage of the recoveries come from, and there is no reason to expect that to change in the current year. Of course, some of the activities from 2014 are carried over as the OIG continues work on multi-year initiatives that address quality of care, appropriate payments and payment and delivery reform. But the OIG is also committed to expanding its scope to include emerging issues as well. Initiatives related to healthcare reform programs, such as health insurance exchanges, are new to the Work Plan this year. The focus is on payment, eligibility, management and information security issues associated with these emerging programs.

Understanding the scope of the OIG Work Plan is critical to managing risk on the part of healthcare providers and payers. They should continue to assess all aspects of their operations to identify any compliance gaps that should be addressed in a proactive manner. The OIG continues to focus on a broad set of issues and providers and payers need to expand their assessments to incorporate the new initiatives addressed in the 2015 Work Plan.