Home Health & Hospice Week

HHAs, hospice occupy basement in overpayment collections.

Home care providers waiting for the other shoe to drop on surety bonds may see it happen in the coming year, if one government watchdog agency gets its way.

In addition to highlighting some high-profile fraud cases (see story, p. 339), the HHS Office of Inspector General once again urges the Centers for Medicare & Medicaid Services to impose surety bond requirements on home health agencies. This time, it uses HHAs' low overpayment collection stats as the reason.

Background: The "doc fix" bill signed into law in April 2015 contained a $50,000 surety bond provision for home health agencies (see Eli's HCW, Vol. XXIV, No. 15). The $50K figure was a minimum, with the amount going up corresponding to HHAs' revenues. But CMS has yet to implement the surety bond provision.

Both the OIG and the Medicare Payment Advisory Commission have been pushing CMS to go ahead with the requirement. In the latest example, the OIG advocated for HHA surety bonds in its "Top Challenges" report released last month (see Eli's HCW, Vol. XXVI, No. 43).

Now in the OIG's Semiannual Report to Congress released Nov. 30, the watchdog agency again hits on the issue. The OIG urges CMS "to implement the surety bond requirement for home health and consider the feasibility of requiring surety bonds for other providers based on their level of risk," according to the report.

The reason? The surety bond recommendation comes in response to the OIG's finding earlier this fall that Medicare Administrative Contractors collected only 11 percent of the home health and hospice overpayments referred by Zone Program Integrity Program Contractors and Program Safety Contractors in 2014. That compares to an average 20 percent rate across all Medicare provider types.

Not surprisingly, Part A services had the highest overpayment collection rate calculated by the OIG at 59 percent, the agency noted in its September report, "Enhancements Needed in the Tracking and Collection of Medicare Overpayments" (OEI-03-13-00630). Those are "mainly delivered by institutional providers such as inpatient hospitals," the report noted.

In contrast, DME had a 25 percent collection rate, Part B services 20 percent, and home health and hospice 11 percent, the OIG found.

Hopefully the home health and hospice rate differs "because the providers disputed the ZPIC/ PSC findings at the MAC level, thus making the collections percentage low," says billing expert M. Aaron Little with BKD in Springfield, Missouri.

"There is a respectable volume of denial dollars overturned with the appeals process," points out consultant Pam Warmack with Clinic Connections in Ruston, Louisiana.

A higher-than-average appeals success rate could indeed contribute to the 11 percent statistic, the overpayment report suggests. While the OIG doesn't include details, it does note that "because providers have the right to appeal overpayment determinations, the initial demand amount is not always the same as the final overpayment amount for which the MAC seeks collection."

Another problem: The issue also could be on the Medicare contractors' end, the industry veterans suggest. "Some poor administrative/communications processes between the MACs and ZPICs/PSCs" could be the culprit, Little offers.

Or "you have to wonder if the MACs are staffed to handle these collections," Warmack says. "Just because OIG demands the MAC process the denials and handle all the appeals, and ultimately the collections, does not mean the MAC is staffed to do so effectively."

A Less Favorable Factor

On the other hand, another characteristic of home care and hospice providers may be leading to the low collections figure. Some overpayments are "never collected because the ZPIC investigation resulted in the provider closing and declaring bankruptcy," Warmack tells Eli. "How is the MAC ever able to collect overpayments in that situation?" she asks.

The answer is, it's not able to, the OIG says. "MACs reported that collections can be a challenge if a provider has filed for bankruptcy or is no longer in business," the overpayment report notes. "Some MACs also raised the issue of providers being revoked from the Medicare program or on payment suspension, which can make collecting overpayments from these providers challenging."

The ZPICs and PSCs focus on identifying cases of suspected fraud, waste, or abuse, the OIG continues. Thus, "the providers they are identifying - and subsequently referring to the MACs for overpayment collection - are potentially problematic providers. Therefore, it is likely that some of these providers may no longer be billing Medicare and may be revoked or excluded from the Medicare program as a result of their actions."

Result: "Once a provider is no longer billing Medicare, it can be difficult for MACs to recover overpayments because they no longer have the ability to withhold or suspend future payments to these providers as a way to recoup these overpayments," the OIG says.

And that's why the OIG is pushing for surety bond implementation.

"Perhaps it's not such a bad idea for highrisk providers," Warmack allows. "That would help their collections of overpayments to a small degree."

That sentiment was shared by the National Association for Home Care & Hospice when President Obama signed the surety bond requirement into law back in 2015. "Any surety bond requirement should be time-limited and targeted to new providers only," NAHC said at the time. "Longstanding providers rarely present a risk to Medicare."

"But leave the honest, well-run agencies alone," Warmack exclaims. "They have enough challenges to face every day to stay in business."

Implementing the bond provision "would further hurt providers currently struggling to comply with expensive regulations; it would threaten access to care especially in rural areas; it is effectively a tax on the vast majority of providers to cover the cost of a few bad actors; [and] it provides too much discretion to CMS in setting the bond amount and implementing the requirement," NAHC said.

Note: See the semiannual report at https://oig.hhs.gov/reports-and-publications/archives/semiannual/2017/sar-fall-2017.pdf and the overpaymentreport at https://oig.hhs.gov/oei/reports/oei-03-13-00630.pdf.