Home Health & Hospice Week

Feds’ extrapolation practices are ‘flawed and unreliable,’ agency counsel blasts.

Backtracking on a big portion of claims denials seems to be par for the course for the OIG these days, judging from a new report. And that should call into question whether any of the claims determinations are valid, some observers say.

The HHS Office of Inspector General outlines its findings from an audit of 100 claims submitted by Mederi Caretenders Home Health in Creve Coeur, Missouri — including a whopping $1.26 million overpayment based on errors for 21 claims. Mederi was an Almost Family Inc. subsidiary, and became part of LHC Group Inc. when Almost Family and LHC merged last year, an LHC spokesperson confirms to Eli.

Old news: The OIG undertook the audit due to the 2016 Comprehensive Error Rate Testing program’s determination of a 42 percent error rate for home health claims, the report notes. What the OIG fails to mention in the report is that the CERT-determined payment error rate has dropped drastically since then, down to 17.6 percent in 2018 (see Eli’s HCW, Vol. XXVII, No. 42).

The OIG had a contractor review 100 Mederi claims from 2013 to 2015, the report says. Originally, the contractor said 42 claims did not comply with billing requirements ranging from homebound to medical necessity to face-to-face documentation. But when Mederi disputed the findings, the OIG asked its contractor to re-review the claims. The contractor then dropped the denials for half of them, leaving 21 claims noncompliant.

In recent audit reports, the OIG likewise took back a number of erroneous HHA claims determinations (see Eli’s HCW, Vol. XXVIII, No. 20).

Fuzzy math: The 2013 claims are outside of the four-year claim-reopening period. But the OIG calculated that Mederi received $31,428 in overpayments due to the 21 claims that weren’t compliant in 2014 and 2015. Extrapolated to the agency’s universe of claims for the time period, Mederi received at least $1.26 million in overpayments for those years, the OIG calculates.

“You’ve got to love their data analytics,” quips consultant Tom Boyd with Simione Healthcare Consultants in Rohnert Park, California.

The home care industry has long contested the feds’ extrapolation techniques. The OIG announced last year that it would issue a report in 2019 scruti­nizing Medicare contractors’ statistical sampling and extrapolation practices, but so far the report has not appeared (see Eli’s HCW, Vol. XXVII, No. 9).

Mederi submitted a lengthy response to the audit through its attorney at Waller Lansden Dortch & Davis in Nashville, Tennessee. “Mederi Caretenders disagrees with the findings of the independent medical review contractor that the audited claims did not meet Medicare billing requirements,” the response letter states. “For each of the forty-two denied claims, Mederi Caretenders is submitting detailed responses which demonstrate that the patients at issue were in fact homebound and had skilled needs, and were provided quality care from Mederi Caretenders that was reasonable and medically necessary, correctly coded and properly documented.”

Plus: The report “is fundamentally flawed because the independent medical review contractor misconstrued the applicable Medicare Benefit Policy Manual provisions and failed to perform a complete review of the patients’ entire medical record.”

Furthermore: “The statistical sampling methodology that led to the extrapolated overpayment … is flawed and unreliable,” Waller attorney Jennifer Weaver says in the letter. Originally, the OIG esti- mated an overpayment of $5.3 million based on the 42 claims found noncompliant.

While the OIG concedes that 21 of the 42 determinations were incorrect, as its contractor’s re-review found, it stands firm on the other 21. “We maintain that all of our findings, as revised, and all of our recommendations remain valid,” the watchdog agency says.

What the OIG recommended was that Mederi refund the portion of the $1.26 million in estimated overpayments received during CYs 2014 and 2015; “exercise reasonable diligence to identify and return any additional similar overpayments outside of the four-year claim-reopening period, in accordance with the 60-day rule;” and strengthen its controls.

Mederi maintains it owes no overpayment refund since the claims were valid and its existing controls already ensure compliance and accurate billing. “Mederi Caretenders respects the Office of the Inspector General and the important work they do,” the agency says in a statement shared with Eli. “However, we disagree with these findings and plan to appeal. We feel we have strong documentation to support the appropriateness of these claims.”

Note: The OIG report is at https://oig.hhs.gov/oas/reports/region7/71605092.pdf.