Home health billing practices under fire from multiple flanks

Three recent developments indicate sharp scrutiny being placed on the home health industry. Stemming from Congress, the courts and the Office of Inspector General (OIG), the concerns all intersect upon the same issue: Medicare billing practices for home health services.

On October 3, 2011, Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee; and Sen. Chuck Grassley (R-Iowa) issued a joint press release along with a staff report from the Finance Committee that accused home health companies of “gaming” the Medicare system by allegedly increasing the number of therapy visits made to the homes of Medicare beneficiaries. The report, which identifies several major companies by name, alleges that managers encouraged therapists to achieve a 10-visit target in order to increase Medicare payments.

Through 2007, the Medicare program included a substantial bonus when a home health agency provided at least 10 therapy visits. This bonus (more than $2,000) increased reimbursement an average of almost 98 percent as compared to when there were just nine visits. Foreshadowing this potential problem, CMS recognized when it implemented the bonus system that the 10-visit threshold was “susceptible to manipulation.”

On a parallel front, a major home health provider, LHC Group Inc., recently agreed to pay more than $65 million to the federal government to resolve allegations that it violated the False Claims Act for home health billings to the federal insurance programs. The company, which is one of the providers identified in the Finance Committee staff report, also agreed to be bound by the terms of a Corporate Integrity Agreement with the OIG. The settlement resolves allegations that, between 2006 and 2008, LHC improperly billed for services that were not medically necessary and for services rendered to patients who were not homebound.

Finally, on a third front, the OIG released its 2012 Work Plan on October 5, 2011. The Work Plan includes two new sections entitled Questionable Billing Characteristics of Home Health Services and Missing or Incorrect Patient Outcome and Assessment Data. Observing that Medicare spending on home health services has increased 81 percent since 2000, the OIG indicated that it will review home health claims to identify agencies that exhibited a high percentage of questionable billing characteristics indicative of potential fraud. (The Work Plan does not, however, identify what constitutes questionable characteristics.)

In addition, the OIG will review home health agencies’ OASIS data to identify payments for episodes for which OASIS data were not submitted or for which the billing code on the claim is inconsistent with OASIS data.

These three actions portend ever increasing scrutiny on the explosive growth within the home health industry. While the Affordable Care Act and other government initiatives include incentives to encourage more community- and home-based services, the rebalancing will not come without growing pains as more and more government resources are devoted to these services.

Jason E. Bring, Esq., is a member of the Healthcare Group of Arnall Golden Gregory LLP. Bring defends nursing facilities in medical liability and False Claims Act cases, as well as assists them in regulatory and reimbursement issues.

Disclaimer: This article is not legal advice. Consultation with licensed and experienced legal counsel is advised.

Topics: Facility management , Finance , Regulatory Compliance