Home Health & Hospice Week

OIG Semiannual Report works through the naughty list.

‘Tis the season for the OIG to pile on the scrutiny for home health providers.

The HHS Office of Inspector has released its Semiannual Report to Congress covering April 1 through Sept. 30, 2020, as well as two audit reports in recent days (see related stories, p. 349) — and none of them are flattering to home health agencies.

In the Semiannual Report, the OIG once again highlights the issue of alleged home health agency gaming of LUPA payments. “Not all payments to home health agencies (HHAs) for home health services with five to seven visits in a payment episode complied with Medicare requirements,” the OIG charges. “We estimated that Medicare overpaid HHAs nationwide $192 million for our audit period” (more report details are in HCW by AAPC, Vol. XXIX, No. 29).

“These improper payments occurred because the MACs did not analyze claim data or perform risk assessments to target claims with visits slightly above the Low Utilization Payment Adjustment threshold of four visits for additional review,” the OIG judges in the Semiannual Report.

While the across-the-board five-visit LUPA threshold has gone away in the Patient-Directed Groupings Model, the issue of LUPA gaming still remains with thresholds set anywhere from two to seven visits based on payment category.

The OIG also estimates that Medicare could have saved $267 million over two years for hospital payments that should have been prorated for shorter-than-average hospital stays followed by a discharge to home health. Medicare’s post-acute care transfer proration policy has curbed home health discharges at some hospitals, critics say.

Ignore The OIG At Your Peril

In addition to general fraud and abuse topics, the report also touches on individual cases — including an unusual one with extremely steep penalties for ignoring a Corporate Integrity Agreement’s repayment requirements.

Reminder: “OIG negotiates corporate integrity agree-ments (CIA) with health care providers and other entities as part of the settlement of Federal health care program investi­gations arising under a variety of civil false claims statutes,” the watchdog agency explains on its website. “Providers or entities agree to the obligations, and in exchange, OIG agrees not to seek their exclusion from participation in Medicare, Medicaid, or other Federal health care programs.”

Back in 2015, Friendship Home Health Inc. and related entities settled a whistleblower-sparked false claims lawsuit for $6.5 million. The qui tam relator, who was an LPN at the Nashville, Tennessee-based agency, alleged a laundry list of misdeeds including forging signatures, falsifying documentation, and paying kickbacks to patients’ family members. She also claimed she was fired after reporting the violations to an accreditation surveyor (see HCW by AAPC, Vol. XXIV, No. 21).

According to the OIG, in 2018 it sent Friendship a demand for $1.3 million in penalties for its failure to repay overpayments identified in its second and third annual reports under the agreement. On June 1, 2020, “the Departmental Appeals Board (DAB) upheld OIG’s demand that Friendship … pay $1,322,500 in stipulated penalties for breaches of their CIA,” according to the report.

The case escalated to the DAB after the Administrative Law Judge upheld the OIG’s demand in 2019. “The DAB agreed with the ALJ’s conclusions that the CIA’s auditing and repayment provisions created independent obligations to repay overpayments to Medicare and Medicaid, and that each time [Friendship] violated those obligations to repay overpayments, it created a separate basis for OIG to demand stipulated penalties.”

Plus: The DAB “held that the CIA authorizes per-day stipulated penalties to run concurrently for each failure to make timely repayment,” the OIG adds. This indicates Friendship’s appeal may have had more to do with the amount of the penalties than their existence.

“The moral of the story is repay overpayments,” stresses attorney Robert Markette Jr. with Hall Render in Indianapolis. “If you have a CIA, you need to be sure to follow it.”

“Although this may not be the first time that a home health agency subject to a Corporate Integrity Agreement (CIA) has been 'dinged’ by the OIG for failure to comply, there is an important lesson for all agencies here," emphasizes Washington, D.C.-based healthcare attorney Elizabeth Hogue. “Corporate Integrity Agreements are very serious business. Providers under CIAs are closely monitored by the OIG and agencies incur considerable expenses to meet the requirements of the OIG if they are subject to CIAs.”

Better than adhering to a CIA is avoiding one altogether. "The most important action agencies can take to avoid enforcement action, including CIAs, is to have an up-to-date Compliance Plan that is fully implemented,” Hogue counsels.

Meanwhile, the fraud crackdown on home health operations in Detroit continues to generate results. An HHA owner who was indicted back in 2013 has been excluded from federal healthcare programs for a minimum of 20 years based on his conviction of health care fraud conspiracy, the OIG also says in the report.

Salman Ali and his wife controlled and operated home health agencies that billed Medicare for services that were not medically necessary or were not provided from about 2005 to 2013. In addition, Ali created false physical therapy files and claimed that PT services had been provided when they had not, the OIG says. The court sentenced him to serve nearly three years in prison and to repay about $12.1 million.

Note: A link to the OIG report is at https://oig.hhs.gov/reports-and-publications/archives/semiannual/2020/2020-fall-sar.pdf.