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OIG Work Plan
Published July 30, 2019

New Items in the OIG’s Work Plan Update – July 2019

The Office of Inspector General (OIG) has published the latest additions to its Work Plan.  PYA offers insights on two noteworthy items related to the potential for substandard maternal care in Indian Health Service (IHS) hospitals and overturned denials in Medicaid Managed Care Organizations (MCOs).


Each month, the OIG publishes the most recent additions to its Work Plan.  The work plan development process is dynamic and requires adjustments throughout the year to meet the OIG’s “priorities and to anticipate and respond to emerging issues with resources available.”  With a goal of transparency, the OIG updates its Work Plan website monthly, outlining recently added information.  The following is a summary of the latest additions, the agencies affected, and what they mean for compliance leaders in healthcare organizations.

Quality of Maternal Healthcare in Indian Health Service Hospitals

According to the OIG Work Plan update:

Maternal mortality and morbidity are increasing in the United States, and up to 60 percent of maternal deaths may be preventable….   The American College of Obstetricians and Gynecologists issues guidance on safe practices during labor and delivery intended to help reduce maternal mortality and other complications.  Early analysis of medical record review results for the study Adverse Events in Indian Health Service Hospitals (OEI-06-17-00530) identified instances in which Indian Health Service (IHS) hospital providers did not follow recommended practices and may have put patients at unnecessary risk.  Failure to follow recommended practices is not necessarily improper and does not always cause patient harm, but it may indicate substandard quality of care.  We will use medical record reviews by an obstetrician/gynecologist specializing in patient safety to identify and describe examples of potentially substandard care during labor and delivery in IHS hospitals.  These anecdotes may help IHS to target hospital improvement efforts.  We will also identify factors that may be related to the potentially substandard care.1

The Federal health services’ mission is to raise the “physical, mental, social, and spiritual health of AI/ANs [American Indians and Alaska Natives] to the highest level.”  However, health disparities and inadequate healthcare services have been of increasing concern for more than a century.  IHS directly operates 28 acute-care hospitals in eight states, many of which are in remote locations.  The hospitals are typically small and have fewer than 50 beds.

An OIG study found that limited oversight by IHS area offices resulted in the lack of compliance activity performance for IHS hospitals’ quality-of-care practices.  This limited oversight adversely affected opportunities to identify and remediate quality problems in IHS hospitals.  CMS had not conducted Conditions of Participation (CoP) compliance surveys frequently enough to make them useful tools.  Staffing shortages, limited clinical support and guidance, inadequate information technology knowledge, deficient technological resources, and difficulties with electronic health record systems, along with a lack of dedicated funding, contributed to the struggle to implement data-driven quality improvement methods.2

What You Need to Do:

According to the Centers for Disease Control and Prevention, “Severe maternal morbidity (SMM) includes unexpected outcomes of labor and delivery that result in significant short- or long-term consequences to a woman’s health.  Maternal mortality is highly preventable.  Identifying, treating, and preventing conditions of maternal morbidity that could lead to maternal death, along with highlighting opportunities to avoid repeat injuries, can improve maternal outcomes and result in fewer maternal deaths.  Implementing a two-step screen-and-review process can efficiently detect severe maternal morbidity in women and ensure that each case undergoes a morbidity merit quality review.

Institutions and systems can either adopt existing screening criteria or create their own comprehensive screening criteria identifying severe maternal morbidity conditions to measure improvement processes against outcomes.  Evaluating adverse outcomes to determine whether unpredictable, unavoidable, and consequential events can prompt necessary changes and improve quality-in-care provision efforts.  Facilities should review maternal cases and characterize the events, diagnoses, and outcomes involved in order to determine if an identified morbidity is judged to have been potentially avoidable, and, thus, presents opportunities for system change and improved future performance.3

Overturned Denials in Medicaid Managed Care

According to the OIG Work Plan update:

Managed care organizations (MCOs) contract with State Medicaid agencies to provide beneficiaries with Medicaid services.  MCOs must cover services in at least the same amount, duration, and scope that would be covered under Medicaid fee-for-service.  However, capitated payment models in managed care may create an incentive for MCOs to inappropriately limit or deny access to covered services to increase profits.  We will review the extent to which selected MCOs’ denied services and payments were overturned upon appeal.  We will also review any concerns about the selected MCOs’ performance related to denials and appeals that were identified through State oversight and monitoring efforts.4

What You Need to Know:

To receive Federal Medicaid funds, states must administer their Medicaid programs and use of managed care for Medicaid coverage with the requirements found in Section 1932 of the Social Security Act (the Act).  The Act allows states to make a capitation payment to an MCO contractor on behalf of beneficiaries enrolled under that MCO’s contract.  States make these payments to the MCOs in order to provide a specific set of covered services to beneficiaries, regardless of whether the beneficiary receives services during the period covered by the payment.States must also implement the Code of Federal Regulations (CFR) in 42 CFR § 438.210(i), ensuring that services are sufficient in amount, duration, or scope to reasonably achieve the purpose for which the services are finished.  MCOs may not arbitrarily deny or reduce the amount; duration; or scope of a required service solely because of diagnosis, type of illness, or condition of the beneficiary.Beneficiaries, and providers acting on behalf of beneficiaries, have the right to appeal an MCO decision to reduce, terminate, or deny benefits, or may file a grievance with an MCO regarding concerns about their care.7  Section 1932(b)(4) of the Act requires MCOs to establish internal grievance procedures under which Medicaid enrollees, or providers acting on their behalf, may challenge the denial of, coverage of, or payment for medical assistance.

What You Need to Do:

Providers should take steps to identify the root cause of their payer denials for all payer types, including MCOs.  Providers should take a multi-pronged approach by tracking, trending, and analyzing denial types and issues for medical necessity and coding validation.  This approach should compare supporting documentation and utilization of resources for the patients’ health conditions.  In addition, providers should include revenue losses and gains related to overpayments and underpayments.

In addition to tracking denials, there are financial implications that stretch beyond defending those over- and underpayments.  For example, if the length of stay (LOS) is altered by a denial, then Medicaid and/or Medicaid-eligible claims could impact the allowable Medicare Disproportionate Share Hospital (DSH) percentage.  Consequently, this could impact the Medicare DSH payment, as well as potential eligibility in the Health Resources and Services Administration’s (HRSA’s) 340B drug discount programs.

PYA recommendations:

  • Be precise and informed about your state’s appeals and grievance processes.
  • Keep accurate denial and appeal activity reports to support and correct possible flaws that can result from both providers and payers.
  • Monitor and assess the care-delivery process, from provider to payer.
  • Watch for denial indicators that result from patient readmissions.

Compiling these indicators and keeping close tabs on the integrity of denials and appeals can help organizations stay informed, develop tools for reporting, and identify educational opportunities to improve their bottom line.

How PYA Can Help

PYA compliance consultants combine regulatory expertise with practical experience in healthcare organizations.  Our compliance subject matter experts will provide a customized approach to assist you and your organization with today’s ever-changing compliance landscape.

If you would like more information about any matter involving compliance, valuation, or strategy and integration, contact one of our PYA executives below at (800) 270-9629.


© 2019 PYA
No portion of this article may be used or duplicated by any person or entity for any purpose without the express written permission of PYA.









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