Kusserow’s Corner: Feds Continue Targeting Home Health Fraud

Home Services Program (HSP) Fraud and abuse continues to be a priority of the DOJ, OIG, CMS, and state Medicaid agencies. HSP is a program intended to provide an alternative to institutional care for people with severe disabilities and it is intended that the needed services be delivered in a beneficiary’s home. Those eligible for this program require a high level of care and is intended for recipients under 60 years of age to reduce Medicaid expenditures by avoiding more expensive institutional care, including nursing home care. Unfortunately, in many cases the Home Services program may be exploited by unscrupulous individuals who believe that personal care services are an easy target for fraud.

Enforcement Actions

The summer of 2013 has been particularly active in enforcement by the DOJ and OIG. The most prevalent types of fraudulent activity found include the following:

  1. Services being billed, but not performed.
  2. In some cases, beneficiaries were not living at home, in a hospital, nursing home or in jail
  3. Personal assistants and beneficiaries being in collusion and splitting the benefits
  4. Personal care assistant to be a relative or family friend, who often is a phony
  5. Payment of kickbacks to patient recruiters to obtain Medicare beneficiary information
  6. Falsifying documents to make it appear beneficiaries are qualified for home health services

In August, the owner of South Louisiana Home Health Care and its director of nursing were sentenced after a jury trial for a $17 million Medicare fraud involving the payment of kickbacks and the falsification of documents. In another case a Detroit-area physical therapist and owner of a home health agency pleaded guilty in a $22 million home health care fraud scheme for services not actually rendered and/or not medically necessary. They paid kickbacks to patient recruiters to obtain the beneficiary information that was used to bill Medicare for services not provided and/or were not medically necessary. They created fictitious therapy files that they provided therapy and personal assistant services for personal care. In July the DOJ obtained 15 indictments in Illinois that followed 12 other indictments for similar wrongdoing last year.

OIG Reports and Plans

In December 2012, the OIG reported that stated Medicaid costs for personal care services in 2011 totaled $12.7 billion, a thirty-five percent increase since 2005, making it one of the fastest growing job categories in the country. They also pointed out numerous problems in Medicaid personal care services making 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. In response to problems in this sector, the 2013 OIG Work Plan includes a number of new initiatives as part of the “crackdown” home health fraud, including:

  • HHA compliance that physicians who certify beneficiaries as eligible for Medicare home health services have face-to-face encounters with the beneficiaries.
  • Determining HHA compliance with State applicants and employee background checks
  • HHA timeliness in recertification and complaint surveys, and complaint follow-up
  • Determining the appropriateness of the billing codes
  • Looking for missing or incomplete Outcome and Assessment Information Set (OASIS) data submission that is required to submit this data as a condition of payment.
  • Monitoring homebound status, need of intermittent skilled nursing, services provided are medically necessary, etc.
  • Examining cost report data to analyze revenue and expense trends under the home health PPS to determine whether the payment methodology should be adjusted.

CMS Actions

At the end of July, CMS issued Federal Register notice announcing the first temporary enrollment moratorium, under the Affordable Care Act, as part of the fight against fraud in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP). This temporarily halts the enrollment of new home health providers in the metropolitan area of Miami for six months. CMS Stated this decision was in response to data analysis, agency experience, and its work with the OIG and DOJ enforcement in the area. CMS noted strong indicators of fraudulent activity including: a disproportionate number of providers relative to beneficiaries, a rapid increase in Medicare enrollment applications from providers during a short period of time, and high utilization of home health services in the affected counties. CMS cited recent enforcement actions, including a sentencing of a Miami home health care company recruiter in a $20 million Medicare fraud scheme in May; sentencing in February of the owners and operators of two Miami home health agencies in a $48 million Medicare fraud for unnecessary health care and therapy services; guilty plea in August 2012 of an owner and operator of a Miami health care agency in a $42 million Medicare home health fraud scheme; and three owners of a Miami home health care were sentenced in April 2012 in a $60 million Medicare home health care fraud scheme.

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.