Home Health & Hospice Week

Watch out for further fraud-fighting measures such as an HHA surety bond.

The home care industry once again served as Medicare's whipping boy in a Senate Finance Committee hearing on Medicare fraud April 24.

The hearing was titled "Anatomy of a Fraud Bust: From Investigation to Conviction." It aimed "to learn from a success story where [the Centers for Medicare & Medicaid Services], the HHS Inspector General, and the Justice Department were able to work as a team," said Senate Finance Chair Max Baucus (D-Mont.) in an opening statement for the hearing.

The senators asked representatives from CMS, the OIG and DOJ to talk about its takedown of 91 defendants in a record-breaking bust coordinated across the nation last September (see Eli's HCW, Vol. XX, No. 33, p. 259). While the feds referenced that bust, they focused more on the investigation of ABC Home Health and Florida Home Health in Miami.

Recap: ABC and Florida HH engaged in a number of fraudulent activities surrounding outlier payments, the reps recounted. They billed Medicare for $25 million in home care and physical therapy services that weren't medically necessary and/or were never provided, noted Inspector General Daniel Levinson in his testimony.

The agencies paid kickbacks to patient recruiters for the beneficiaries, noted Wifredo Ferrar, U.S. Attorney for the Southern District of Florida. Then they paid kickbacks to physicians to sign their fraudulent plans of care and certifications. "A review of Medicare billing data showed that almost every Medicare beneficiary who received home health care services from ABC [and Florida HH] during this period purportedly received the exact same treatment: daily insulin injections by nurses and home health care aides and/or physical therapy," Ferrar said.

Patient-swapping occurred between the agencies, noted CMS's Peter Budetti in testimony. "One entity would admit the patient, bill for services, and discharge the patient, and then the other entity would admit the patient and bill for services," said Budetti, Deputy Administrator and director of CMS's Center for Program Integrity.

Note: Data analysis from Zone Program Integrity Contractors (ZPICs) played an important role in identifying the aberrant billing patterns of the agencies, Budetti pointed out.

As authorities secured indictments in the case, those defendants already indicted cooperated with investigators, which led to more indictments. In the end, the case yielded indictments against 63 people and 60 convictions or guilty pleas, Ferrar said.

The reps noted other home care fraud issues in the hearing too. For example, as part of the big fraud bust last September, Jodi Leonore Latson, owner and operator of referral business Health Pro Resources, was indicted for providing beneficiary information to 100 different home health care agencies in exchange for illegal payments. And the Gov-ernment Accountability Office noted CMS's recent payment suspension of 78 HHAs in Dallas in relation to the fraud case against Dr. Jacques Roy (see Eli's HCW, Vol. XXI, No. 9, p. 68).

But the lion's share of the scrutiny went to the ABC/Florida Home Health case. The convicted agencies have given the industry another public relations black eye to deal with, observers lament.

Improved Data Analysis Leads To  Quicker Prosecutions

Medicare has taken some major losses as fraud becomes a bigger problem. The federal government loses $60 billion a year to health care fraud, Baucus estimated.

But the feds touted their stepped-up fraud-fighting activities.

For example: In response to the ABC/Flor-ida Home Health case, CMS put a 10 percent cap on outlier payments, Levinson pointed out. Medicare spending on home health in Miami dropped one-third from 2009 to 2011, and spending on outliers dropped 90 percent. Before that in 2008, 52 percent of Medicare's home care spending was going to Miami, while it contained only 2 percent of Medicare beneficiaries.

Improved and more timely data analysis has led to quicker prosecution of fraudsters, according to Levinson. And the feds are securing a $7 to $1 return on the Health Care Fraud and Abuse Control (HCFAC) program.

In 2011, HEAT Medicare Fraud Strike Force teams charged 327 defendants who billed Medicare $1 billion, Ferrar said. They secured 201 criminal convictions, and sentenced 175 defendants to prison.

CMS has implemented its "twin pillar approach to fraud prevention in Medicare," Budetti explained.

Old way: "In the past, the government was often two or three steps behind perpetrators, quickly paying out nearly every apparently proper claim -- then later trying to track down the fraudsters after we got a tip or identified a problem," Budetti told the senators. "That meant we were often showing up after criminals had already skipped town, taking all of their fraudulent billings with them."

New way: Now CMS uses a Fraud Preven-tion System (FPS) and an Automated Provider Screening (APS) system. "The FPS uses predictive analytics and other sophisticated analytics to detect aberrant billing patterns and other vulnerabilities by running predictive algorithms against all Medicare Part A, Part B, and Durable Medical Equipment (DME) claims before payment is made," he said. "The APS will ultimately perform rapid and automated screening of all providers and suppliers seeking to enroll or revalidate their enrollment in Medicare, and already conducts ongoing monitoring of the eligibility status of currently enrolled providers and suppliers."

Reminder: Under the APS, revalidating home health agencies and all hospices are considered "moderate" risk level. They are subject to unscheduled or unannounced site visits on top of the basic requirements, which include verification of Medicare requirements, license verifications, and checks of databases such as the OIG exclusions database. New HHAs are "high" risk level and are subject to the above requirements plus criminal background checks and fingerprinting.

Expect Mandatory Compliance Programs

But not all the lawmakers were impressed with the reps' testimony. "American citizens are sick and tired of stories about government's failure to act as a faithful steward of taxpayer dollars," said Orrin Hatch (R-Utah), Ranking Member of the committee. "And there are few programs as rife with waste as Medicare," Hatch said in his opening statement.

"While CMS has begun to make some strides in its fight against fraud, its implementation of congressionally mandated program integrity efforts has been lackluster at best," Hatch blasted. "The CMS report card is not one to be proud of."

Hatch upbraided CMS for failing to implement fraud-fighting measures such as a moratorium on Medicare enrollees "where more than enough [providers] already exist to furnish health care services." The Visiting Nurse Associations of America recently supported the idea of a targeted moratorium when it was suggested by the Medicare Payment Advisory Commission.

And Hatch lambasted the agency for failing to implement a home health agency surety bond "even though CMS considers new home health agencies a high risk." CMS also has failed to make compliance programs mandatory for providers, he added in the statement.

CMS also has failed to contract for fingerprint-based criminal background checks yet, the GAO pointed out.

Note: For more details about the feds' fraud-fighting programs, see prepared testimony and a hearing webcast at http://finance.senate.gov/hearings/hearing/?id=89f86e81-5056-a032-5200-808cc00b1fe6.