On March 30, 2020, in reaction to the President’s declaration of a national health emergency due to the COVID-19 pandemic, the Department of Health and Human Services (HHS) waived several CMS and OIG program requirements and their related audits. 

Several months later CMS signaled the reversal of their order announcing their intention to “discontinue exercising enforcement discretion beginning on August 3, 2020, regardless of the status of the public health emergency.”

Translation:  At the direction of CMS, OIG is back doing audits to ensure hospitals are following procedures and one of their key focal points is Medical Device Explant Warranties, an initiative that, alone, is projected to recover billions of dollars from U.S. hospitals.

While there isn’t clear guidance on exactly how the rollout of the audit programs will take place, it’s clear that CMS and the OIG are intent on trying to eliminate fraud, waste, and abuse in pursuit of recovering monies they feel are owed back to Medicare.

All U.S. hospitals are in scope and there have been cases where some systems have been blindsided by claims in excess of $40M.  Your hospital has likely been in violation of the credit handling process and will owe significant dollars based on the OIG audit.  In a recent sample of 296 hospitals, the OIG found that 100% of hospitals were in violation.

Unseen errors can come in many different forms and are based on several factors.  For example, in 2017 Abbott Laboratories recalled a Coronary Dilation Catheter which was experiencing a protective balloon inflation malfunction.   The recall resulted in thousands of replacements and subsequently resulted in thousands of potentially mismanaged warranty credits.  The OIG will be checking to see if your hospital handled these (and many other recall-based credits) correctly. 

Are you prepared?

SpendMend recommends calling in one of our tenured specialists to perform a Mock OIG Audit to assess your compliance and any risk you might have. Program oversites are as common as they are costly - and they happen every day.