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OIG Issues Report on Questionable Billing by Home Health Agencies

On August 2, 2012 the Department of Health and Human Services Office of Inspector General (OIG) issued a report on questionable billing by Home Health Agencies (HHAs). The report found that in 2010, Medicare paid home health claims totaling approximately $5 million as a result of questionable billing, with three specific errors.

The report included recommendations that CMS:

1. Implement claims processing edits or improve existing edits to prevent inappropriate payments.
2. Increase monitoring of billing for home health services.
3. Enforce and consider lowering the 10% cap on the total outlier payments an HHA may receive annually.
4. Consider imposing a temporary moratorium on new HHA enrollments in Florida and Texas.
5. Take appropriate action regarding inappropriate payments and HHAs with questionable billing.

Among the findings of the report, the OIG found that inappropriate payments were made to HHAs for home health claims that overlapped with claims for inpatient hospital stays, overlapped with claims for skilled nursing facility stays, and had service dates after beneficiaries’ deaths–these errors occurred despite the fact that Medicare has automatic edits in place to eliminate these types of errors.

The OIG also found that in 2010, of the HHAs that were found to have questionable billing practices, 80% of those HHAs were located in either: Texas, Florida, California, or Michigan. In fact, the report indicates that in just those four states, more than 2,000 HHAs had questionable billing. Further, 97% of HHAs identified to have questionable billing were located in states that did not have Certificate of Need policies in place limiting the number of HHAs eligible to operate in the state. Nearly one in four HHAs had questionable billing.

In response, CMS concurred with all five OIG recommendations. CMS did, however, disagree with the amount of inappropriate payments made for home health claims that overlapped with inpatient hospital stays and skilled nursing facility stays. CMS comments indicate that it would be difficult to determine what financial impact overlapping claims would have without specific claim data.

If you need assistance defending a Medicare audit, setting up a home health agency, or need help creating a compliance plan, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888.