Kusserow’s Corner: Update on Home Health Agency Fraud

The stated purpose of the Home Health Agency (HHA) program is to keep beneficiaries in their homes and out of more costly institutional settings. Last December, the HHS Office of Inspector General (OIG) Office of Evaluation and Inspection (OEI) issued a report on “CMS and Contractor Oversight of Home Health Agencies” where it reported that 11,203 HHAs received nearly $20 billion for in-home services provided to 3.4 million beneficiaries. It found two MAC contractors collectively prevented $275 million in improper payments and referred 14 cases of potential fraud.  By contrast, the four Zone Program Integrity Contractors (ZPICs) reviewed did not identify any HHA vulnerabilities and varied substantially in their efforts to detect and deter fraud. The OIG noted that in an earlier report in the year, it found one in four HHAs had questionable billing and in other studies it found vulnerabilities in Medicare contractor efforts to identify and investigate potential fraud and abuse, as well as CMS oversight of this area.  The OIG made a number of recommendations to CMS including setting high performance standards for fraud-prone areas, developing a system to track revocations, and following up to prevent inappropriate payments made to HHAs with suspended/revoked billing privileges. CMS concurred in all these recommendations.

On the OIG Office of Investigations front, it has been working with the FBI and Department of Justice (DOJ) in identifying fraudulent HHA activities.  On Monday, July 22, 2013, as part of a continuing investigation, Detroit-area resident Javed Rehman, owner of Quantum Home Care Inc., pleaded guilty for his role in a $13.8 million Medicare fraud scheme.  He purchased with and paid kickbacks to recruiters to obtain Medicare beneficiary information used to bill Medicare for home health services – including physical therapy and skilled nursing services – that were never rendered.  This followed the sentencing in May of Rehan Khan, owner of Moonlite Home Care Inc., to 60 months in prison for causing the submission of over $1 million in false and fraudulent billing to Medicare. They paid and directed the payment of sums to doctors to refer patients for home health care services to Moonlite that were not medically necessary and/or never rendered. They also paid and directed the payment of kickbacks to beneficiaries for Physicians Choice, First Care, and Moonlite. The Medicare beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they had received home health services that they had never received. Other times, the Medicare beneficiaries’ signatures were forged on forms and visit sheets to indicate that they received home health services that they had never received.

On July 19, the DOJ intervened in a “qui tam” whistleblower lawsuit against A Plus Home Health Care, Inc., a home health care company in Fort Lauderdale, Fla., and its owner, Tracy Nemerofsky. It alleges that A Plus Home Health Care engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market of southern Florida by hiring at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties but required them to perform few, if any, actual job duties. To cover up the scheme, the government alleges, Ms. Nemerofsky generated sham personnel files, which included lists of job duties the spouses and boyfriend did not perform and performance reviews of job functions they did not complete, to give the false impression that the spouses and boyfriend were legitimate employees, when in fact they received inducements and rewards for the physicians’ referrals of Medicare patients to A Plus Home Health Care.

On July 11, there were a wave of indictments against 15 individuals, 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. 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. These indictments charged individuals exploited the Home Services Program and received Medicaid funds to which they were not entitled. Several investigations uncovered services being billed, but not performed, due to the personal assistant being in jail or out of town. Other investigations revealed the beneficiary residing in a hospital, a nursing home, or out of town at the time the services were supposedly rendered at the beneficiary’s home. Some personal assistants and beneficiaries were receiving the Medicaid payments for services not rendered and simply splitting the paychecks. One of the worst examples of fraud on the program, as alleged in the charging documents, was a beneficiary who got out of jail for a one day furlough to meet with his case worker at home so he could continue receiving the Home Services Program benefits. Allegedly, that beneficiary got approved for the services and then returned to jail. It is further alleged that Medicaid paid for personal assistant services not knowing the beneficiary was in jail for several months. This round of indictments brings to 29 the number of defendants who have been indicted for abusing the program. 

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.

Connect with Richard Kusserow on Google+ or LinkedIn.

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