Glossary – O

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Observation Services Fraud – Observation care is ongoing short-term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation status is commonly assigned to patients with unexpectedly prolonged recovery after surgery and to patients who present to the emergency department and who then require a significant period of treatment or monitoring before a decision is made concerning their next placement. Separate payment is available for observation care in some circumstances but not all, and fraud occurs where the hospital fraudulently treats the observation care as separately billable. On example of non-billable observation care is for patients who are transferred from the hospital’s own outpatient department into observation.

Off-label drug promotion – A drug that has been tested and FDA-approved for one use but prescribed by a physician for another use, is known as “off-label.” Though physicians may prescribe drugs for off-label usage, the FDA prohibits drug manufacturers from marketing or promoting a drug for a use that the FDA has not approved. If the manufacturer promotes the drug for new uses in addition to than those already approved, and the additional use(s) are not supported by scientific evidence, and hence not supported by a citation in any applicable Compendia, then the drug manufacturer may be liable for a violation of the False Claims Act assuming other conditions are met.

Off-label whistleblower – See Off-label drug promotion in this Glossary.

Orange Book – The short name for a FDA publication called “Approved Drug Products with Therapeutic Equivalence Evaluations.” This book contains all FDA-approved drugs and related information about the drugs.

Organ Procurement Costs Fraud – most payors, including Medicare, treat the organ procurement cost as a reimbursable cost separate from and in addition to the facility inpatient component (e.g. DRG) of the transplant service. Questions to ask include, did the hospital inflate its actual costs to acquire organs for transplant.

Outlier Payments – See Outlier Payments Fraud in this Glossary.

Outlier Payments Fraud – For particular hospital inpatients that generate extremely high costs (due to patient level of condition and length of stay), Medicare makes additional outlier payments to offset the financial impact to hospitals for these outlier patients. As each given DRG is paid the same base amount (see Diagnosis Related Group in this Glossary) the hospital is provided with additional monies dependent upon the extent of the outlier cases. These payments are based on costs, or charges as adjusted by a hospital’s cost-to charge ratio (CCR). CCR’s affect outlier payment because cost is incorporated into payment calculation for these cases. For outpatients, outlier payments are made for services or procedures with costs that exceed the PPS payment rate for their APC group threefold. The statute sets a limit on projected aggregate outlier payments. Upcoding DRG’s is one way that fraud actors generate increased outlier payments.

Outpatient department (OPD) Fraud – See Ambulatory Payment Classification Fraud in this Glossary.

Outpatient Facility Fraud – See Ambulatory Payment Classification Fraud in this Glossary

Outpatient Hospital Fraud – See Ambulatory Payment Classification Fraud in this Glossary

Outpatient PPS False Claim – A false claim submitted by a hospital outpatient department that defrauds medicare’s prospective payment system by upcoding the appropriate APC. Although this typically involves upcoding it can also fit into other healthcare fraud categories as well. See Ambulatory Payment Classification Fraud in this Glossary.

Outpatient prospective payment system (OPPS) – See Ambulatory Payment Classification Fraud in this Glossary.