AHA says OIG compliance reviews are fundamentally flawed
- The American Hospital Associaiton (AHA) is urging CMS to address “serious problems” stemming from the HHS Office of Inspector General’s hospital compliance reviews.
- In a letter this week, AHA said the audits routinely include “fundamental flaws and inaccuracies, both in the OIG’s understanding and application of Medicare payment rules and in the procedures the OIG uses to conduct the audits.” This results in grossly overstated repayment demands, harms hospital reputations and saps time and resources from patient care, it said.
- The reviews also lead to uneven application of Medicare payment rules, because not all hospitals are subject to the audits and there is inconsistency in the appeals process, according to the letter.
This is not a new issue for hospitals. In a June 2014 letter to then-HHS Secretary Kathleen Sebelius, the AHA called for an immediate halt to the audits, saying the OIG’s findings and estimated payments were incorrect and “entirely redundant.” A recent uptick in penalties for alleged reimbursement fraud and abuse has galvanized hospitals to again press for audit reforms.
AHA says OIG’s tendency to extrapolate its findings to all claims in an audit period is aggravating the problem of overall flawed reports.
“Extrapolation often inflates the repayment demand from tens of thousands to millions of dollars, which forces hospitals to appeal each claim (even when they otherwise would not have done so) and creates a severe financial and reputational impact on the hospital that continues long after the OIG’s errors are corrected on appeal,” the letter says.
The AHA was “surprised and disappointed” to learn the OIG is now planning to extrapolate in all hospital audits going forward, the letter adds.
To improve the accuracy and fairness of OIG audits, the AHA outlines a series of actions CMS should take:
- Extrapolate only if there is a significant error rate;
- Delay extrapolation until the appeals process is complete;
- Allow rebilling of denied inpatient claims regardless of the usual timely filing period;
- Provide feedback to the OIG to facilitate issuance of an amended audit report and improvements in audits; and
- Review and address legal issues raised by hospitals before an audit is performed or before a repayment demand is issued.
AHA may be hoping HHS scales back the review process altogether, which would not be particularly surprising with the pressure in President Donald Trump's administration to roll back regulatory burden. Recently, the CMS said it will take a more targeted approach ins some areas to finding and investigating Medicare fraud and improper payments. It will focus on providers whose claim error rates or unusual billing practices stand out compared to similar providers. The decision could help reduce the backlog of appeals pending at the agency, which CMS anticipates will reach 687,000 by the end of this year.
But while hospitals call for reforms in the OIG compliance reviews, a recent Wall Street Journal report raised serious concerns about hospital safety. Reviewing hundreds of Joint Commission inspection reports, the Journal found about 350 hospitals that maintained accreditation in 2014 despite Medicare violations. More than a third of those had additional deviations in 2015 and 2016.
CMS had considered reports by public healthcare accreditors public in its 2018 patient payment rule, but dropped the plan citing federal laws barring agencies from revealing third-party audit results.