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OIG Identifies 5 Characteristics of Home Health Fraud


I am often asked if doing something, usually following the advice of a consultant, might result in a red flag at Medicare.  Most of the time the answer is no.  Medicare is not going to stop everything and go after an agency where nurses mistakenly answered an OASIS question incorrectly if they cancel claims and resubmit corrected versions.  Medicare mines data.  They look for patterns and trends and more importantly, the outliers.  In the past we have seen agencies fall under scrutiny for lengths of stay that far exceed their peers.  We have seen Medicare take a hard cold look at agencies where average payment per patient is high for their area and we know that Medicare will look hard at claims where more than 20 therapy visits are provided.  It’s all about the data.

Medicare has once again been playing in the data fields and has arrived at five new areas of concern.  You should pay attention to these.  Medicare is telling you in advance what they think might be considered fraud.   Read about here or in their own report and then look objectively at your own data.

No recent visit with the supervising physician:  Almost 500 agencies and 16,789 physicians had more than 60 percent of patients on service with no visit billed by the physician in six months.  The good news is that these agencies only constituted 4 percent of all agencies and only 5 percent of physicians met this criterion.  The OIG believes that physicians did not adequately evaluate patients prior to beginning services.  It’s hard to disagree with that conclusion.  If the OIG were to ask, they would be told by us to banish these agencies from the face of the earth and replace them with Ice Cream vendors.

No Hospital or Nursing Home Stay prior to admission.  Get this.  1,751 physicians referred at least 97 percent of their home health patients without a hospital or nursing home stay within the prior 30 days.  Oddly enough, that’s only one half of one percent of physicians and probably the lowest 0.5 percent in their class.  If you have one of these physicians as a referral source, you likely know it or someone higher on the food chain does.  This outlier does not happen without effort and cooperation between both parties.   Remember, home health agencies are not like health clubs.  Patients do not wake up and decide to join a home health agency because they are bored.  Always, no matter what the diagnosis, explain in admission paperwork what happened that precipitated a referral to home health.

Diabetes and Hypertension:  Nationally, the median percentage of patients admitted to a home health agency for diabetes or hypertension is 10 percent.  For about 500 agencies, that number is about 45 percent.   For 7937 physicians, 29 percent or more referrals fell into this category compared to a national median of five percent.  Some areas in the South have remarkably high rates of diabetes and when a small agency has gained the trust of an endocrinologist, the percentage of patients with Diabetes may be quite high. Admit the patients who are eligible and need care and document well.

Multiple Agencies:  770 agencies and 7500 physicians were associated with beneficiaries who had claims billed from multiple agencies over the course of two years.   For the home health agencies, about 26 percent of their patients fit this description compared to the national median of six percent.  For the physicians, the national median was 0 percent and the outliers came in at 14 percent.  This occurs when recruiters or owners of multiple agencies transfer beneficiaries to avoid scrutiny or to meet their own financial needs.

Multiple Admissions:   778 HHAs and 3,822 physicians had or referred patients with a disproportionate number of readmissions for patients.  For these outlier agencies and physicians, about 20 percent of their patients had multiple admissions in a short period of time compared to 6 percent of home health agencies and 4 percent of physicians.  According to their report:

Past OIG fraud investigations have uncovered incidents in which HHAs provided—and physicians supervised—unnecessary care over a long period of time and tried to conceal the duration of that care by periodically discharging and re-enrolling their beneficiaries.

Fraud Hotspots

Now that the OIG has disclosed what they will be looking for, it helps to know where they will be looking. Twenty-seven fraud hotspots in 12 states were identified in the OIG report based on the following criteria:

  • outliers on 2 or more measures,
  • areas with 10 or more HHAs that were outliers on 2 or more measures, or
  • areas with 50 or more physicians that were outliers on 2 or more measures.

Several of the identified hotspots met more than one criteria.  Miami, FL and Detroit, MI met all three criteria.  The combined spending for Medicare Home Health in the 27 hot spots represented 37 percent of home health expenditures nationally.  Note that the OIG has not promised to limit scrutiny to these 27 areas so don’t relax if you live in Montana or Maine.

The 12 states are:fraud hot spots

  • Arizona
  • California
  • Florida
  • Illinois
  • Louisiana
  • Michigan
  • Nevada
  • New York
  • Oklahoma
  • Pennsylvania
  • Texas
  • Utah

If you live in one of these hotspots or if your agency meets any of the five areas considered by the OIG to be characteristic of fraud, it may be time to take a closer look at your Corporate Compliance Plan which should include a clinical record review.  Call if you don’t have one – we can help.  Or, if you believe you cannot afford us, google model compliance plan for home health (if the link doesn’t work).   There is nothing complicated or difficult about a compliance plan.  The only time it gets hard is when an agency has to make hard decisions based upon the information gathered from the plan’s activities.

Keep in mind we know many agencies that have cleaned up after a period where things got out of control usually because leadership became complacent and quit looking.  We also work with agencies who have signed Corporate Integrity Agreements with the OIG.  Compared to Integrity Agreements, compliance plans are a piece of cake.

Comments are always welcome.  You can also email me privately if you have any questions.

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