OIG Increases Scrutiny of Home Health Agencies

If the looming threat of the Review Choice Demonstration which recently began in Illinois was not sufficient to make home health agencies a little anxious, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) has also taken up the call to put home health services under the microscope. If the OIG’s recent review report on a home health agency is any indication, home health providers should expect increased scrutiny of home health services by enforcement agencies as well.

On May 28, 2019, the OIG released a review of a for-profit home health agency (HHA) located in Michigan which concluded that the HHA had not complied with Medicare requirements for billing home health services. In its review of a stratified random sample of 100 claims from 2014 to 2015, the OIG paid particular attention to whether the beneficiaries met the Medicare homebound and skilled need criteria and determined that 38 of the 100 claims under review were billed incorrectly and did not meet the Medicare requirements.

The majority of denials were issued due to the beneficiaries not meeting the “homebound requirement,” often for a portion of the episode. For example, a beneficiary may have been found to be initially homebound due to a heel wound with surgical incision, but was no longer homebound after the wound healed. Thus, the OIG’s findings support that, not only will the initial determination of homebound status be important at the start of the home health episode, but HHAs must also have adequate oversight procedures to continually monitor the beneficiaries’ homebound status throughout the episode of care.

Similarly, the OIG also found that multiple claims did not require skilled nursing or therapy services for the entire benefit period or a portion thereof. The OIG stated that the HHA did not provide sufficient clinical review to verify that beneficiaries initially or continued to require skilled services.

Based on the 38% error rate found in the sample of 100 claims, OIG used statistical extrapolation to estimate that the HHA received approximately $10.5 million in overpayments during the audit period. Although the HHA disagreed with the OIG’s findings and retains the right to appeal those findings, the Medicare appeals process itself is not without cost and delay for providers. In addition, because federal regulations allow the government to fully recoup any alleged overpayment immediately before the Administrative Law Judge level of appeal, small providers with limited cash flow with big dollar overpayment demands have additional challenges for getting through the appeals process intact.

The OIG’s latest report follows the OIG’s work plans in recent years indicating a trend towards greater examination and oversight of home health agencies in general:

  • In June 2018, the OIG announced a work plan to review documentation of home health agencies that provided 4 or fewer home health visits in a single episode of care. If a home health agency provides four or fewer visits from a skilled service provider in an episode, the agency is paid a standardized per-visit payment based on visit type or Low Utilization Payment Adjustments (“LUPA”). Once 5 visits are provided, the agency receives a full 60-day payment based on episode of care. The LUPA report will determine whether the documentation meets the conditions for coverage, and is anticipated to be released later this year.
  • In January 2019, the OIG announced a work plan to review duplicate payments for home health services covered under Medicare and Medicaid, which will address beneficiaries dually eligible for both Medicare and Medicaid. The report, which is anticipated in 2020, will determine whether States also made Medicaid payments for home health services for dual eligible beneficiaries who are also covered under Medicare.

In light of the increased government scrutiny, home health providers should pay particular attention to the findings in the OIG’s latest review report. In particular, home health agencies should assess whether there are adequate procedures in place to ensure that the documentation supports the beneficiaries meet the homebound and skilled need requirements not only at the beginning of a certification period, but also that these beneficiaries continue to meet these requirements throughout the certification period.

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