Life Science Compliance Update

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May 29, 2015

OIG Releases Mid-Year 2015 Work Plan, Includes New Provisions Related to Open Payments Oversight and Scrutiny into Clinical Laboratory Payments

Oig workplan

Yesterday evening the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released their Work Plan Mid-Year Update for fiscal year (FY) 2015, which summarizes new and ongoing reviews and activities that OIG plans to pursue. A number of new terms find its way into the mid-year plan, including a provision related to OIG’s anticipated oversight of the Open Payments program, as well as a provision stating that OIG will analyze CMS payments to the top 25 clinical diagnostic laboratories.

View the Work Plan here.

The OIG’s job is to detect fraud, waste, and abuse; identify opportunities to improve healthcare program economy; and to hold “accountable those who do not meet program requirements or who violate Federal health care laws.” The OIG conducts audits and investigation, and can impose civil monetary penalties where appropriate, so their Work Plan is often of great interest to those working with Federal healthcare programs. As a summary of some of the OIG’s enforcement initiatives, the Work Plan can serve as a useful resource for companies in planning internal audits and in training. 

We have highlighted two new provisions in this year's plan.

New: Review of financial interests reported under the Open Payments Program

We will determine the number and nature of financial interests that were reported to CMS under the Open Payments Program. We will also determine the extent to which CMS oversees manufacturers’ and group purchasing organizations’ (GPOs’) compliance with data reporting requirements and whether the required data for physician and teaching hospital payments is accurately and completely displayed in the publicly available database. The Affordable Care Act, § 6002, requires that manufacturers disclose to CMS payments made to physicians and teaching hospitals. Manufacturers and GPOs must also report ownership and investment interests held by physicians. The Open Payments Program provides public transparency about provider-industry relationships; it is important that the information be complete and accurate to serve the needs of consumers making educated decisions about their health care choices. (OEI; 03-15-00220; expected issue date: FY 2016).

It will be interesting to follow OIG's oversight of the Open Payments program, and any potential enforcement actions that may follow. Specifically, it will be important to see whether OIG ties reported Open Payments data into other aspects of their oversight, including fraud and abuse laws, and how the agency reconciles potential missing and/or inaccurate data in the system. 

NEW: Annual analysis of Medicare clinical laboratory payments

We will analyze Medicare payments for clinical diagnostic laboratory tests, including the top 25 clinical diagnostic laboratory tests by Medicare expenditures in 2014. Previous OIG work has found that Medicare pays more than other insurers for certain high-volume and high-expenditure laboratory tests. Section 216 of the Protecting Access to Medicare Act of 2014 requires new Medicare payment rates for laboratory tests beginning in 2017 based on private payer rates and establishes processes for determining initial payments for new laboratory tests. Pursuant to a requirement of the Protecting Access to Medicare Act, OIG will conduct an annual analysis and monitor Medicare expenditures and the new payment system for laboratory tests. (OEI; 09-15- 00210; expected issue date: FY 2016)

As we have noted in a number of articles, referral arrangements between laboratories and physicians have received a fair amount of scrutiny in recent months. This includes Health Diagnostics Laboratory paying $47 million and entering a Corporate Integrity Agreement with OIG as a result of alleged kickbacks related to lab referrals. OIG’s inclusion of a new analysis of Medicare clinical laboratory payments in its Work Plan seems to indicate further interest.

OIG added the following new provisions to its Work Plan:

  • Intensity-modulated radiation therapy
  • Hospital preparedness and response to high-risk infectious diseases
  • Access to durable medical equipment in competitive bidding areas
  • Annual analysis of Medicare clinical laboratory payments
  • Inpatient rehabilitation facility payment system requirements
  • Use of electronic health records to support care coordination through ACOs
  • Part D oversight portfolio
  • Billing trends for Part D drugs and commonly abuse opioids
  • Manufacturer rebates - Federal share of rebates
  • Analyses of generic price increases compared to price index
  • Treatment of authorized generic drugs
  • Completeness of data in Transformed Medicaid Statistical Information System: early implementation
  • CDC- Award process for Ebola preparedness and response funding
  • FDA - FDA's monitoring of imported food recalls
  • HRSA - State agency oversight of HRSA Maternal, Infant, and Early Childhood Home Visiting grants
  • A Review of the National Institute of Environmental Health Sciences' Funding for Bisphenol A safety research
  • Grantee's use of President's Emergency Plans for AIDS Relief funds
  • Foster care- monitoring the health and safety of children through the complaint resolution and licensing process
  • States'CCDF payments rates and access to childcare services
  • CCDF-Licensing and oversight of health and safety standards at Federally funded facilities 
  • Review of financial interests reported under the Open Payments Program


View the Mid-Year 2015 Work Plan

View the 2015 Work Plan

View the 2014 Work Plan


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