Medicare Audit Targets HHA Overpayments

Gem City Home Care, LLC became the most recent HHA to be ordered to pay back millions in overpayments following an audit by the Centers for Medicare & Medicaid Services. According to CMS, the Ohio-based agency failed to comply with billing requirements for 25 of 100 home health claims in fiscal years 2016 and 2017.

“Specifically, Gem City incorrectly billed Medicare for services provided to beneficiaries who: (1) were not homebound or (2) did not require skilled services.  On the basis of our sample results, we estimated that Gem City received overpayments of at least $2.67 million during this period,” CMS stated.

Initially, auditors found that 36 out of 100 claims audited were problematic. Cincinnati-based Gem City took exception to the findings and challenged the audit. An independent medical review contractor was brought in to review the claims in question and the number was reduced from 36 to 25. CMS has acknowledged Gem City’s right to further appeal.

Under the Medicare home health prospective payment system (PPS), CMS pays home health agencies a standardized payment for each 60-day episode of care that a beneficiary receives.  The PPS payment covers part-time or intermittent skilled nursing care, and home health aide visits, therapy (physical, occupational, and speech-language pathology), medical social services, and medical supplies. 

OIG has stated in the past that it is conducting audits of home health services because it has found overpayments to be a significant issue. To receive home health services, patients need to be confined to their home and require skilled care.

“Our prior audits of home health services identified significant overpayments to HHAs. These overpayments were largely the result of HHAs improperly billing for services to beneficiaries who were not confined to the home (homebound) or were not in need of skilled services,” OIG stated.

Audits can be triggered a number of ways: A patient or patient representative may question a bill; a whistleblower who works at the HHA may report it; there may be questionable coding; missing or insufficient documentation, to name a few.

To prevent an outside audit, home health agencies should have policies and procedures in place, conduct self-audits, educate staff and those responsible for billing, and make sure all proper documentation is in place to justify treatment.

Not all overpayments are due to fraud, sometimes it’s simply a matter of someone making billing errors. Regardless of whether it was accidental or intentional, providers should never ignore an audit letter or notice. Even routine audits should be treated like a serious matter. Mishandling of overpayments can trigger a criminal fraud investigation or a civil action under the federal or state False Claims Act.

The Health Law Offices of Anthony C. Vitale has extensive experience representing clients in audits and overpayments and we can represent your interests through all of the stages of the overpayment appeals process.  If you have any questions or concerns, feel free to contact us at 305-358-4500 or

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The Health Law Offices of Anthony C. Vitale