ASCs Have a Higher Profile in the OIG’s 2008 Work Plan

The Office of the Inspector General (OIG) has published its 2008 work plan, and ambulatory surgical centers (ASCs) are the focus of several initiatives in the coming year. Foremost, the revised payment system for ASCs will be under scrutiny.

The new payment system expands by 750 procedures the number eligible for Medicare payment when performed in an ASC. It also sets payment reductions on 350 of those procedures because they are considered office-based. Previously, approximately 2,500 procedures were eligible for Medicare payment in ASCs. In the new plan, payment for office-based procedures will be restricted to the amount that would be paid for non-facility practice expense under the Medicare physician fee schedule. This is intended to prevent inappropriate migration of office-based procedures to ASCs.

The work plan focus seems to be as much an evaluation of the effectiveness of the government’s revised payment system as it is a campaign to audit ASCs for compliance.

A work plan excerpt reads: Ambulatory Surgical Center Payment System “We will review the appropriateness of the methodology for setting the ASC payment rates under the revised ASC payment system. Section 626 (D)(i) of the MMA requires the Secretary of HHS to implement a revised payment system for payment of surgical services furnished in ASCs, which the Secretary is required to revise no later than January 1. We will examine changes to the new ASC payment system and the rate-setting methodology used to calculate the ASC payment rates.” (OAS; W-00-08- 35423; various reviews; expected issue date: FY 2009; new start) ASCs are now paid 65 percent of the rates seen in outpatient prospective payment plans (OPP) and the intent is for the change to be budget neutral for CMS (Centers for Medicare & Medicaid Services). The new payment system will be phased in over four years, and revisions could be considered based on the results of OIG findings.

The OIG is also focusing on physician errors as they report services performed in ASCs. In some cases, the physician may be the initial entity under scrutiny, but that scrutiny can turn to the ASC as well. Look at the OIG Work plan’s pain management focus:

Medicare Payments for Interventional Pain Management Procedures “We will review Medicare payments for interventional pain management procedures. Section 1862(a)(1)(A) of the Social Security Act provides that Medicare will pay for services only if they are medically necessary. Interventional pain management procedures consist of minimally invasive procedures, such as needle placement of drugs in targeted areas, ablation of targeted nerves, and some surgical techniques.

Many clinicians believe that these procedures are useful in diagnosing and treating chronic, localized pain that does not respond well to other treatments. Interventional pain management is a relatively new and growing medical specialty. In 2005, Medicare paid nearly $2 billion for these procedures. We will determine the appropriateness of Medicare payments for interventional pain management procedures and assess the oversight of these procedures.” (OEI; 05-07-00200; expected issue date: FY 2008; work in progress) Most ASC pain procedures are paid at a rate at the low end of the ASC payment spectrum, but because multiple procedures are often associated with pain, many of the procedures themselves are simple and low-risk.

Medicare provides medical necessity edits for many pain procedures, and outlines permissible frequencies for these procedures.

For example, Trailblazer, a Medicare carrier, provides coverage for three paravertebral facet joint denervations per calendar year. Each injection is expected to provide four to six months of symptom relief, and Trailblazer expects a successful diagnostic nerve block and impedance monitoring would have occurred before the initial facet joint denervation. Documentation of appropriate and acceptable diagnoses (from the rubrics 721 Spondylosis and allied disorders and 722 Intervertebral disc disorders) would be required.

If the physician performing his work in the ASC does not meet the Medicare requirements and his claim is denied, the ASC’s payment is at risk. Likewise, if an audit of the physician reveals inadequate documentation or insufficient following of protocols, ASC payments could be called into question. It’s imperative that ASCs administrators ensure their physician populations are educated regarding documentation and medical necessity requirements.

In the same way, ASCs will be subject to the OIG’s continued target of healthcare fraud and abuse: Healthcare Fraud “OIG devotes significant resources to the investigation of fraud committed against the Medicare and Medicaid programs. We conduct numerous investigations in conjunction with other law enforcement agencies, such as the Federal Bureau of Investigation, the United States Postal Inspection Service, the Internal Revenue Service, and State Medicaid Fraud Control Units. OIG will investigate 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 other false claims submitted to obtain program funds. We will also investigate business arrangements that allegedly violate the federal healthcare anti-kickback statute and the statutory limitation on self-referrals by physicians.”

Medicare expenditures grew from $206 billion in fiscal year 1996 to nearly $382 billion in fiscal year 2006, according to CMS chief financial officer Timothy Hill. CMS has targeted with increasing success Medicare payment errors in recent years using the OIG, manual and automated audit techniques.

CMS’ principal goal is to drive down the error rates in claims, and that has been accomplished. According to Hill, the rate has dropped from 7.9 percent in 2005 to a goal of 4.3 percent in FY 2007. A goal of 4.2 percent has been set for FY 2008.

The government’s anti-fraud activities are tracked for their return on investment (ROI), and the ROI of anti-fraud work plans has averaged 13-to-1. Since ramping up compliance enforcement, the government has recovered $8.85 billion in overpayments for healthcare services and supplies.

That should be enough to convince the marketplace that the OIG is not going to retreat. It’s important for all physicians, coders and billers in the ASC to be familiar with Medicare’s rules regarding ASCs and Medicare/ Medicaid services in general to ensure the facility’s staff is compliant with the law. Most of these rules can be found online, by searching by keyword at www.cms.hhs.gov/mcd/search.asp?from2=search1.asp&. 

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