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Overview of the 2016 OIG Work Plan

on Monday, 18 January 2016 in Health Law Alert: Erin E. Busch, Editor

In November, the Office of Inspector General (OIG) issued its fiscal year 2016 Work Plan giving the industry insight as to the new and ongoing priorities of the OIG. The Work Plan summarizes the prior year’s results, which reflect the OIG’s progression toward an increasing focus on civil actions between 2014 and 2015:

Category 2014 2015 % Change
Audit receivables $834,700,000 $1,130,000,000 35.38%
Investigative receivables $4,100,000,000 $2,220,000,000 -45.85%
Exclusions 4017 4112 2.36%
Criminal actions 971 925 -4.74%
Civil actions 533 682 27.95%


Of note, the number of civil actions increased over 25% from 2014. These include false claim and unjust enrichment lawsuits, civil monetary penalty (CMP) settlements, and administrative recoveries related to self-disclosures. The OIG plans to use these enforcement tools, as well as the exclusion authority and corporate integrity agreements (CIAs), to enforce compliance in 2016.

The heart of the Work Plan is to reduce improper payments, prevent and deter fraud, and foster economical payment policies. All providers and suppliers should be aware of the OIG priorities; both the ongoing initiatives and the new initiatives added each year.
In FY 2016, the OIG has revised some initiatives from the previous year and added several new initiatives- a sampling of which appears below.


Medicare oversight of provider-based status

– The OIG added its intent to find the number of provider-based facilities that hospitals own. It will also review whether all provider-based facilities meet the criteria outlined in 42 CFR § 413.65 and Centers for Medicare and Medicaid Services (CMS) Transmittal A-03-030, and the provider-based attestation review process.

Hospice general inpatient care

– The Plan clarified that the OIG will review medical records for purposes of medical necessity. It also will determine if Medicare payments for this service were made within the Medicare requirements.

Part B payments for drugs purchased under the 340B Program

– The OIG will analyze the financial impact of the 340B Program on eligible covered entities, Medicare and Medicaid to determine the ability for Medicare and its beneficiaries to share in the cost savings from the 340B Program.


Medical device credits for replaced medical devices

– Previous reviews have indicated that there may be overpayments for the replacement of medical devices. The OIG will review whether the payment for these is in line with the reduced Medicare amount required.

Medicare payments during Medicare Severity Diagnosis Related Groups (MS-DRG) payment window

– The OIG will review Medicare payments made to hospitals who made certain claims for Part B outpatient services provided during inpatient stays as allowed under the Inpatient Prospective Payment System (IPPS). Some services and supplies should not be billed separately.
CMS validation of hospital-submitted quality reporting data

– The OIG plans to review whether CMS validated the quality reporting data submitted by hospitals. The OIG stated that the accuracy is important because new payment programs use the data. It will also review CMS’s actions after its validation.
Skilled Nursing Facility (SNF) prospective payment system requirements

– Prior OIG reports have found that payment for SNF therapy was significantly higher than the cost to the SNF to provide the services. The OIG plans to review documentation to ensure that appropriate payment was made. The requirements include:

  • A physician order at the time of admission for the resident’s immediate care;
  • A comprehensive assessment; and
  • A comprehensive plan of care prepared by an interdisciplinary team that includes the attending physician, an RN, and other appropriate staff.

Prolonged services—reasonableness of services

– The Work Plan added a review of Medicare payments made for prolonged services billed by physicians. The necessity, therefore the billing, of prolonged services should be rare and unusual.
The majority of the initiatives in the 2016 plan are continued from prior years’ Work Plans. Compliance officers and Committees should review the Work Plan to identify risk areas and possible audit priorities. It is also advisable to provide governing boards with an overview of the OIG priorities that are relevant to the organization.

Zachary J. Buxton

Abby T. Mohs

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500

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