Kusserow’s Corner: OIG and CMS Set Sights on Home Services Agencies

Home health programs have been a high priority for Medicare and Medicaid is 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. There has been an increasingly movement to manage patients with chronic conditions and keep them out of emergency rooms, hospitals and nursing homes. Supporting such efforts has been expected to not only improve the quality of life for beneficiaries but also cheaper for the taxpayers to the much more expensive alternative of institutionalized care in skilled nursing facilities. Last year, this industry sector accounted for more than $20 billion paid by Medicare on behalf of 3.4 million beneficiaries with another estimated $15 in outlays paid by Medicaid programs. The OIG noted that (a) Medicaid costs for personal care services has increased thirty five percent since 2005; (b) one in four HHAs had questionable billing; (c) vulnerabilities in Medicare contractor efforts to identify and investigate potential fraud and abuse, as well as CMS oversight of this area.

Medicare uses the service for patients with acute-care needs that may involve a SNF, provision of medical supplies and durable equipment. Whereas Medicaid home healthcare patients tend to have chronic conditions that require treatments at home, such as diabetes. Medicare and other payers also pay for nonmedical “personal services” care, including help bathing and eating. Home health agencies have been shown to be a very profitable business with very healthy margins of profit. In fact, virtually all of such entities are for-profit.

Enforcement Actions

The DOJ and OIG have found considerable evidence to recognize that home health is among the most vulnerable healthcare programs to fraud and abuse. The OIG reported recently finding as many as a quarter of all Medicare home health agencies had submitted “questionable” bills. They also noted that in the GAO reported 40% of all fraud convictions initiated by a group of Medicaid fraud-control units were for home health. Common types of scams and fraudulent practices include:

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

CMS Actions

CMS has announced that they recognized vulnerabilities in the programs and would be increasing their scrutiny of those participating in the program and last July they announced their first temporary enrollment moratorium designed to curtail fraud in areas with a history of such problems. The decision was made after reviewing key factors, in consultation with the OIG, of potential fraud risk including a disproportionate number of providers and suppliers relative to beneficiaries, and extremely high utilization. Now again in 2014, CMS has announced a second wave of enrollment moratoria that includes enrollment of home health agencies in four metropolitan areas (Fort Lauderdale, Detroit, Dallas and Houston). 

OIG Work Plans

The OIG has identified numerous problems in 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. A number of audits and evaluations by their Office of Audit Services (OAS) and Office of Evaluation and Inspection (OEI) related to this area appear in their Work Plans. For 2013, they included:

  1. HHA compliance that physicians who certify beneficiaries as eligible for Medicare home health services have face-to-face encounters with the beneficiaries.
  2. Determining HHA compliance with State applicants and employee background checks
  3. HHA timeliness in recertification and complaint surveys, and complaint follow-up
  4. Determining the appropriateness of the billing codes
  5. 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.
  6. Monitoring homebound status, need of intermittent skilled nursing, services provided are medically necessary, etc.
  7. Examining cost report data to analyze revenue and expense trends under the home health PPS to determine whether the payment methodology should be adjusted.

The 2014 OIG Work Plan has added a number of new projects, including:

  1. Looking at the employment of individuals with criminal convictions. In a number of OIG investigations they individuals with prior criminal history. In context, they noted a previous review by them found at least one individual with a criminal convictions in 92% of nursing homes. This is designed to understand the level of significance of this issue for the home health arena.
  2. The OIG intends to review Medicaid provider and beneficiary eligibility to determine whether the billing providers met the criteria to such services.
  3. OAS plans to review of adult day health care services to determine whether providers complied with regulatory standards.
  4. Conducting an audit of continuing day treatment of mental health services to determine whether their claims were adequately supported.
  5. Audit the screening of health care works for home health services to determine whether opportunities exist for lowering Medicaid payments for selected medical equipment and supplies.

See also OIG Work Plan has its Sight on CMS Contracting and Contractors for more information on this topic.

The following are citations to items mentioned in the article:

U.S Department of Health and Human Services, Office of Inspector General: Personal Care Services, Trends, Vulnerabilities, and Recommendations for Improvement, OIG-12-12-01 (November 2012). See also U.S. Department of Health and Human Services, Office of Inspector General: States’ Requirements for Medicaid-Funded Personal Care Service Attendants, OEI-07-05-000250 (December 2006).

U.S. Department of Health and Human Services, Office of Inspector General: CMS and Contractor Oversight of Home Health Agencies. OEI -04-11-00220.

The Federal Register notice relating to this decision by CMS can be found at: https://www.federalregister.gov/public-inspection

OIG 2014 Work Plan at http://oig.hhs.gov/reports-and-publications/archives/workplan/2014/Work-Plan-2014.pdf

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 © 2014 Strategic Management Services, LLC. Published with permission.