Kusserow’s Corner: Home Services Program Fraud Crackdown

On July 11, 2013, the Department of Justice (DOJ) and the HHS Office of Inspector General (OIG) announced indictments against fifteen individuals in Illinois for Health Care Program Fraud. This was a second wave of indictments arising out of the abuse of a Medicaid program in Illinois that pays personal assistants to assist Medicaid recipients with general household activities and personal care.  This follows indictments of twelve other people on May 24, 2012.  The Home Services Program (HSP) is a program intended to provide an alternative to institutional care for people with severe disabilities. Those eligible for this program require a high level of care and it is intended that the needed services be delivered in a beneficiary’s home.  The program is intended for recipients under 60 years of age and is ostensibly designed to reduce Medicaid expenditures by avoiding more expensive institutional care, including nursing home care. The investigation grew out of numerous complaints concerning this program in Illinois.

The individuals were charged for improperly exploiting the Home Services Program and received Medicaid funds to which they were not entitled.   In some cases, the government found uncovered services being billed, but not performed.  In other cases, the beneficiaries were not at home at the time the services were claimed, but away in a hospital, nursing home or in jail.  In some cases, personal assistants and beneficiaries were involved in alleged collusion and splitting the benefit between them.  It is also common to find the personal care assistant to be a relative or family friend, who often is a ghost employee.

The press release identified this service area as one of the biggest fraud problems in the Medicaid program.  The programs especially vulnerable to fraud are those that allow the Medicaid recipient to control the selection and payment of personal care attendants. The OIG released a report in December 2012 that stated Medicaid costs for personal care services in 2011 totaled $12.7 billion, a 35 percent increase since 2005. Home personal care is one of the fastest growing job categories in the country. However, the OIG’s report points to numerous problems in Medicaid personal care services that leave it vulnerable to improper payments, abuse, and fraud, including lack of training standards, uneven oversight of services provided, and failure to implement prepayment controls to prevent improper or fraudulent payments.[1]

While the stated purpose of the program is to keep Medicaid recipients in their home and out of more costly institutional settings, prosecutions to date have evidenced failure to achieve these stated objectives. Rather than assisting beneficiaries in legitimate need of care, the Medicaid agency in numerous instances is allowing the HSP to be exploited by unscrupulous individuals who believe that personal care services are an easy target for fraud.

 [1] See also U.S. Department of Health and Human Services, Office of Inspector General: States’ Requirements for Medicaid-Funded Personal Care Service Attendants.

Richard P. Kusserow served as DHHS Inspector General for 11 years.  He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters.  The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.