Written By: Joe Heminger, SpendMend Marketing Manager

The Center for Medicare and Medicaid Services (CMS) in conjunction with the Office of Inspector General (OIG) have announced their intention to recoup over $1 Billion in improper payments. Your organization will likely fall within their scope of review.  It’s crucial that hospitals properly report warranty credits they receive from vendors for medical devices that fail or are recalled. Failure to comply could lead to significant bottom line loss from OIG fines, penalties, and even potential jail time for hospital executives for Medicare Fraud.

Recently, SpendMend’s own, Al Brander, wrote an article titled “Department of Health and Human Services-Office Inspector General Released a New Report on Hospital Compliance for Reporting Cardiac Device Credits” (HERE).  Al gives an in-depth overview of what the OIG found during audits of 911 hospitals and what issues led to overpayments. It was apparent that the issues the OIG were finding, were consistent across the audited hospitals. It seemed like the same issues kept arising. To avoid these issues and stay compliant, we compiled 5 steps that you can take to make sure your hospital is ready when the OIG comes knocking. The thought of the OIG putting a target on your back can be a scary thought, but it doesn’t have to be!

The first recommendation is to have an external, independent compliance audit of the last 4 years as the OIG found that hospitals do not conduct internal audits for gaps in compliance. These gaps in compliance can be critical to your hospital and will determine what action the OIG takes. One small gap in compliance can cost your hospital tremendously.

The second recommendation is to update your hospital billing system to reflect the 2014 billing changes for the new condition and value code requirements. Amy Frontz, the Deputy Inspector General for Audit Services, stated that out of date billing systems were an underlying issue when it came to staying compliant. It became apparent that a large number of hospitals who did update their billing system were not entering the correct condition and value codes when submitting the UB-04 on original and resubmitted claims.

The third recommendation for being prepared for the OIG involves polices and procedures. Having current policies and procedures in place is key, but more importantly; make sure you are following them.

The fourth recommendation to assure compliance, is to have a tool that increases communication between the various departments involved in the process, clinical, supply chain, finance, patient billing and compliance. Miscommunication/lack of communication between these departments can be detrimental to your hospital staying compliant. Communication is key!

The fifth and final recommendation has to do with vendor involvement. Hospitals have relied upon the vendor to manage the device return and credit process, resulting in gaps and non-compliance. The hospital must have an internal process to return and track the explant back to the vendor.

We know that staying compliant can be a tricky process and isn’t an easy thing to do. However, if you follow these five steps, then you will be on the right track and can breathe easy when the OIG comes for you. If you need additional information or have question’s we are here to help.