May 1, 1996

TO: Allied Association CEO
(Please share with your vice president for finance and legal counsel)

FROM: John E. Steiner, Jr.
Office of General Counsel

SUBJECT: Work Plan project status,
Office of Inspector General
Department of Health and Human Services

This memorandum lists the current level of activity in the 18 hospital projects included in the Office of Inspector General (OIG) fiscal year 1996 Work Plan. While it does not predict future action, it does give you an idea of how the OIG views the projects' relative importance -- or feasibility of completion -- today. The list is based on discussion with senior OIG staff; the Principal Deputy Inspector General has confirmed its accuracy.


The OIG develops Work Plan projects from a variety of sources, including HCFA, Public Health Service Agencies, and the Administration on Aging. The Work Plan section listing HCFA hospital-related projects is attached. Since there is healthy competition among agencies to have projects listed in the Work Plan, we can assume that each project has undergone substantial internal review and been judged significant enough to pursue by both HCFA and the OIG.

The Work Plan contains only prospective summaries that describe what the projects will investigate. Please keep in mind that these are not final reports -- the scope and direction of a project may change as work proceeds. And, even though all project summaries show an expected issue date of FY 1996, not all will have final reports this fiscal year. Some projects may be extended, and some may even be dropped.

Also, you should not assume that all projects that do reach final report stage will be routinely referred to the Department of Justice for possible prosecution. We have held regular meetings with the Department of Justice and the HHS Office of Inspector General to balance their view of purported fraudulent or abusive provider practices, pointing out that rapid change in federal regulations rather than intentional deceptive behavior is more likely to be the culprit. According to OIG senior staff, very few projects are likely to be referred to the Department of Justice.

The OIG Principal Deputy Director has recently confirmed the accuracy of this status report on hospital Work Plan projects:


  • Capital Cost Prospective Payment Systems Ongoing
  • Medicare Contracting for Hospital Inpatient Services On hold
  • Recapture of Medicare Depreciation On hold
  • Short Stay Discharges at Non-Prospective Payment Pilot project in System Providers Region 1; Preliminary probe
  • Cost at Non-Prospective Payment System Providers On hold
  • Medicare Secondary Payer Overpayments Active, with HCFA task force
  • Duplicate Medicare and Veterans Affairs Pilot test,
  • Hospital Payments one Florida site
  • Hospital Credit Balance Reporting On hold;Follow-up of previously listed project
  • Hospital Stays Denied by Peer Review Organizations Underway in one state
  • Hospital Wage Index On hold
  • Multiple Providers with Three-day Payment Window Underway
  • Medicare Inpatient Psychiatric Care Active; follow-up to mid-1980 review
  • Outlier Payments Pilot study in Region 1; work on preliminary test completed
  • Hospital Ownership of Physician Practices In early stages
  • Subacute Care: Patient Selections and Services Possible Drop
  • 1994 Hospital Closure Complete
  • Research Project Payments Not yet begun
  • Hospital Profitability Complete; data did not support release of a report



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