Home Health Area Especially Vulnerable To Medicare Fraud And Abuse

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American Health Lawyers Association reports that the increased amount of federal spending on home health benefits has led to the rise of fraud and abuse issues.  AHLA reports that federal “spending on home health grew approximately 44% from 2002 through 2006 ….”

AHLA states:

Gaps in the Centers for Medicare and Medicaid Services’ (CMS’) administration of the $12.9 billion Medicare home health benefit have left the program vulnerable to improper payments, including payments for claims resulting from fraudulent and abusive practices, the Government Accountability Office (GAO) found in a recent report.

The opportunities for fraud and abuse issues concerning home health care are manifold.  AHLA states that  the “common types of upcoding and billing for unnecessary care in home health were: billing for outlier cases when that level of care was not required, billing for beneficiaries who were not homebound, and billing for therapy visits that may have been medically unnecessary. ”

The Department of Justice defines upcoding as “the practice of improperly assigning a diagnosis code to a patient discharge that is not supported by the medical record for the purpose of obtaining a higher level of reimbursement for that hospital discharge than the hospital would otherwise receive.”

AHLA also reports that Home Health Agencies (HHAs) “are not routinely subject to revalidation and that CMS generally does not include physicians, who are in a position to detect certain types of improper billing, in the agency’s efforts to detect improper payments.”

AHLA reports that CMS is considering adopting two of the four actions recommended by GAO:

CMS stated that it would consider two of GAO’s four recommendations–to amend regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges and to provide physicians who certify or recertify plans of care with a statement of services received by beneficiaries. The agency “neither agreed nor disagreed with our other two recommendations,” GAO explained.

AHLA reports that the four recommendations for CMS are:

• Assess the feasibility of verifying the criminal history of all key officials named on an HHA enrollment application.
• Provide physicians whose identification number was used to certify or recertify a plan of care with a statement of services the HHA provided to that beneficiary based on the physician’s certification.
• Direct CMS contractors to conduct post-payment medical reviews on claims submitted by HHAs with high rates of improper billing identified through prepayment review.
• Amend current regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges.

Among those supporting the GAO recommendations is Senator Charles Grassley, who is very active in the pursuit of health care reform. Among other initiatives,  Senator Grassley is one of the senators seeking to amend the civil False Claims Act, and he has also sought to require not-for-profit hospitals to justify their tax exemptions.   Additionally, Senator Grassley  supports bill (S 301), which would implement a physician gift disclosure requirement for any gifts and payments to physicians valued at more than $100 per calendar year.

AHLA reports:

In a letter to CMS Acting Administrator Charlene Frizzera, Grassley requested the agency “consider implementing all four GAO recommendations to improve controls on improper payments.”

Further, AHLA reports that Senator Grassley stated:

“I regret to say that it seems to me that CMS is just out of touch with the home health benefit and has yet to recognize the vulnerabilities inherent in the system,” Grassley commented. “In order to bring much needed integrity into this program, CMS needs to stop dropping the ball.”

One reason why home health care benefits and the potential Medicare abuse issues may not have CMS’s attention is that home health care benefits consist of only a small percentage of total Medicare benefits (PDF).  According to Kaiser Family Foundation, only 4% of Medicare benefit payments will be for home health care benefits in 2009 (see link immediately above).  Even though this is a small percentage, the actual amount of Medicare funding  spent on home health care is not small.  Given the fact that the total Medicare benefits anticipated to be paid in 2009 is $477 billion, the amount of benefit payments estimated to be spent on home health care would be over $19 billion.