OIG 2016 Workplan: Is It Time To Check Your Compliance?

Every year the Office of the Inspector General (OIG) issues a workplan that identifies the agency’s planned audit activities for the upcoming year. The workplan offers valuable information for healthcare entities by providing them with an opportunity to conduct appropriate risk assessments, and, where indicated, to modify the entity’s compliance program.


The OIG has various audit and policy review activities for DMEPOS suppliers in 2016. OIG will be reviewing the process by which CMS used to conduct DMEPOS competitive bidding and pricing determinations under Rounds 1 and 2 of the competitive bidding process. The OIG will also evaluate the reasonableness of Medicare fee schedule amounts for orthotic braces by comparing them against payments made by non-Medicare payers.

The OIG will also audit power mobility suppliers to determine whether payment made comported with Medicare requirements. Similarly, payments to DMEPOS suppliers for nebulizer machines and drugs will also be audited. According to the OIG, inhalation drugs “were sixth on the list of the top 20 DMEPOS services with the highest improper payments in the 2014 Comprehensive Error Rate Testing Report (CERT).” The CERT audits estimated that the rate of improper payment for inhalation drugs was at 42%.

Additionally, various reviews are expected for diabetes testing supplies. The LCDs issued by Medicare contractors often prohibit dispensing diabetic test strips and lancets until the beneficiary has nearly exhausted their previously dispensed supplies. Beneficiaries are also required to request refills before dispensing can be made. Prior OIG work determined that inappropriate payments were made to multiple medical equipment suppliers for test strips and lancets dispensed to the same beneficiaries with overlapping dates of services.


Chiropractic services continue to be of interest to the government watchdog. Prior OIG work has identified inappropriate billing for chiropractic services, ie, chiropractic maintenance therapy rather than manual manipulation of the spine to correct subluxation. Additional information about the OIG’s concern over chiropractic services can be found here.


According to government statistics, nationally, Medicare is the largest payer of clinical lab services. In 2010, for example, Medicare paid $8.2 billion for lab tests. Since lab services constitutes such a large chunk of the Medicare dollars and because prior OIG audits and investigations revealed inappropriate billing the OIG’s focus in 2016 will be “on independent clinical laboratories with claims that may be at risk for overpayment.”

Physical Therapists, Portable X-Ray Equipment Suppliers, Sleep Disorder Clinics

The OIG will be monitoring independent PTs who have a high utilization rate for outpatient PT services.

Portable x-ray suppliers are also under the OIG’s radar for improper documentation. The OIG will also be auditing for services performed by technologists who were not properly qualified.

Similarly, the OIG is concerned about the high utilization of certain CPT codes by sleep disorder clinics. The OIG audits will assess whether the sleep testing procedures were medically necessary and supported by the requisite documentation.

Compliance Programs; Reporting Overpayment Requirement & 60 Day Rule

To improve a healthcare entity’s operations, providers and suppliers need to have robust compliance programs, conduct appropriate risk assessments and internal audits and ensure that documentation for their line of service meets Medicare requirements. This is especially significant given the requirement under the Affordable Care Act (ACA) that providers and suppliers report and return Medicare overpayments by the date which is 60 days after the date on which the overpayment was identified (or the date any correspondence cost report is due, if applicable).

CMS recently published the final rule providing guidance how the “60 day” reporting requirement under the ACA is to be calculated. In the final rule, CMS steps back from its proposed 10 year look back period for overpayments and has instead settled for a 6 year look back period. The effective date for the final rule March 14, 2016.

If you have questions about the OIG workplan, the 60 Day Rule, RAC or ZPIC audits, compliance programs, or have other health law question, please contact our office.