Last month, the U.S. Department of Health and Human Services Office of the Inspector General issued its latest report on a home health agency that it contends did not comply with Medicare billing requirements. It was one in a series of actions the watchdog agency has taken this year against HHAs, and part of what is notably a trend of enforcement actions against the home healthcare industry.
In its report, the OIG alleges that Mederi Caretenders, a provider of in-home healthcare services, received overpayments totaling at least $1.26 million during calendar years 2014 and 2015. Specifically, the OIG alleges the HHA incorrectly billed Medicare because beneficiaries were not homebound, beneficiaries did not require skilled services, one claim was assigned with an incorrect Health Insurance Prospective Payment System billing code, or one claim was not adequately documented.
The OIG recommended Mederi refund to the Medicare program the portion of the $1.26 million in estimated overpayments received for claims incorrectly billed that are within the reopening and recovery period, as well as to identify and return any additional overpayments outside of the four-year claim-reopening period, in accordance with the 60-day rule. The HHA also was told to strengthen its controls to ensure full compliance with Medicare requirements for billing home health services.
Mederi disagreed with the findings calling them “fundamentally flawed” because “the independent medical review contractor misconstrued the applicable Medicare requirements and failed to perform a complete review of the patients’ entire medical records,” according to the OIG report.
OIG notes that for calendar year 2016, Medicare paid HHAs about $18 billion, and that The Centers for Medicare & Medicaid Services (CMS) determined, through its Comprehensive Error Rate Testing (CERT) program that the 2016 improper payment error rate for HHA claims was 42 percent, or about $7.7 billion. As a result, the OIG has conducted a series of reviews of HHA billing practices.
Two other home health agencies, Excella HomeCare, and Great Lakes Home Health Services Inc., also came under OIG scrutiny earlier this year. In May, the watchdog agency estimated that Excella received overpayments of at least $6.6 million for calendar years 2013 and 2014 as a result of billing for services to patients who either were not homebound or did not require skilled services.
Excella also disagreed with the findings and said it planned to contest them through the appeals process.
In reviewing Great Lakes, the OIG determined that the HHA received overpayments of $10.5 million in calendar years 2014 and 2015. Great Lakes also contested the findings.
Because the OIG can’t possibly review all of an agency’s billings, it uses a stratified sample of 100 patients to determine whether an HHA is billing Medicare properly. As a result, many of those who contest the OIG’s findings often note that reviewers failed to take into consideration each patient’s unique circumstances. The OIG will go back and re-review those contested claims and when appropriate, correct the record. However, the agency generally maintains the remaining findings are valid.
These cases are just the tip of the iceberg for the OIG. In July, the agency released a report in which it made several recommendations relating to home health. Among them was the implementation of the statutory mandate requiring $50,000 surety bonds for HHAs that enroll in Medicare. These surety bonds would have led to the recovery of at least $39 million in uncollected overpayments between 2007 and 2011, according to the report titled “Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Recommendations.”
The report stated that while the Centers for Medicare & Medicaid have taken steps to decrease improper payments to home health agencies, in 2018 it’s estimated that Medicare paid $3.2 billion in improper payments to HHAs.
An OIG report released in May identified Florida, Texas, and select areas in Southern California and the Midwest, as areas where home healthcare fraud is more likely to occur and continues to monitor HHA spending in these hot spots.
Since the beginning of this year, there have been more than two dozen announcements out of the Department of Justice relating to healthcare fraud in the home health industry. The most recent case, in July, involved a patient recruiter in Michigan who was found guilty of engaging in a scheme involving approximately $1.3 million in fraudulent Medicare claims for home health care that were procured through the payment of kickbacks.
In May, a South Florida recruiter was sentenced to 87 months in prison for her role in a scheme involving approximately $1.6 million in Medicare claims for home health care services that were procured through the payment of kickbacks. Also in May a Houston, Texas patient recruiter was sentenced to 188 months in prison for her role in a $20 million scheme to pay illegal healthcare kickbacks to physicians and Medicare beneficiaries in order to fraudulently bill for medically unnecessary home health services, and to launder the proceeds. And, a New Orleans, Louisiana man pleaded guilty for his role in a scheme to solicit the payment of illegal healthcare kickbacks to several individuals, including two New Orleans-area physicians, for the referring and certifying of individuals for medically unnecessary home health services.
It’s clear that federal agencies are targeting healthcare fraud in the home health industry. It is imperative that the industry stay abreast of compliance issues. The Health Law Offices of Anthony C. Vitale can assist you with all matters relating to defense and compliance services. Give us a call at 305-358-4500 or send an email to email@example.com and let’s discuss how we might be able to assist you.