OIG Finds Limited Non-Covered Care in Medicare Home Health

The Office of Inspector General of the U.S. Department of Health and Human Services issued a report on March 13, 2012 finding that “only 2 percent of claims” reflect services that were not medically necessary or that the patient was not homebound. The OIG also identified a 20 percent error rate on claim coding with half of those errors each showing higher or lower than appropriate coding. Overall, the OIG estimates that 2.5 percent of the $17 billion in 2008 home health expenditures was in error.

These findings demonstrate that home health agencies are doing a fairly good job in determining Medicare coverage in spite of all the allegations of home health fraud and abuse. The coding deficiencies indicate that the 2008 new case mix adjustment model complicated coding rather than an abusive practice. That is highlighted by the finding that 10 percent of claims were coded too low and 10 percent were coded too high with the underpayments offsetting nearly all of the overpayments.

The OIG report notes however that the study was limited to a record review and that no determination was made as to whether the patients received the services or actually needed the care. Instead, the OIG states that the findings are limited to a conclusion that the documentation demonstrated need and Medicare coverage entitlement.

Several other important lessons can be gleaned from the report to improve home health Medicare coverage administration even further. First, the 2 percent error rate was virtually all related to homebound documentation. HHAs did exceptionally well in that regard, but improvement is still possible. Second, the OIG found that 36 percent of claim records had some deficiency in the plan of care. For example, 15 percent of care plans did not have a discharge plan and 9 percent did not document the patient’s rehabilitation potential. These weaknesses should be easy for HHAs to fix. Third, the OIG noted that 21 percent of plans of care were missing the dates on which physicians signed the plan. On this matter, the OIG may have not noticed physician dating of care orders and certification on other documents. However, HHAs should be careful to meet the requirement that all care orders be signed and dated prior to billing Medicare.

While this OIG report demonstrates a very high degree of compliance in home health services claims for Medicare payment, the increased oversight is expected to continue. The OIG report notes that findings of fraud in home care persist with recent indictments and prosecutions involving claims for services never rendered to Medicare patients. The OIG study discussed here would not have uncovered such an abuse given that it was limited to a record review.

Further, CMS has sought authorization to undertake a “Probable Fraud Measurement Pilot” that will include interviews with 2,000 home health patients and their physicians to determine the potential of fraudulent billings. The purpose with the pilot is to establish a baseline for measuring any future changes in fraud levels in home health. These two actions alone highlight the cloud that hangs over home health in terms of image and reputation in oversight agencies.

The OIG report can be found online by clicking here.

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