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Home Health & Hospice Week

Fraud & Abuse:

HHAs Back In The Fraud Crosshairs

Published on Thu Oct 16, 2003

Quality, therapy, ALFs top OIG hit list 

Don't be surprised if federal investigators take a fine-toothed comb to your relationships with assisted living facilities in the coming year.

"Home Health Agencies' Arrangements With Other Facilities" is one of the six HHA-specific projects set out in the HHS Office of Inspector General's fiscal year 2004 Work Plan. The plan mentions relationships with health systems, nursing homes and rehab facilities, but it is ALF relationships that will prove the most fertile ground for fraud - and thus of most interest to the OIG, experts say.

"ALF connections are a huge issue," stresses Gene Tischer of trade group Associated Home Health Industries of Florida.

HHAs run into two major problems with their ALF relationships:

1) Kickbacks. Many HHAs are providing something of value in exchange for ALF referrals, and that's a kickback under federal and many state laws, Tischer notes. "This is felony stuff," he says.

ALFs are pressuring agencies to furnish them with services such as chart audits in exchange for their business, reports Burtonsville, MD-based attorney Elizabeth Hogue.

2) Patient choice violations. Often, in exchange for something of value, ALFs agree to establish a so-called "preferred provider" relationship with an HHA, notes attorney John Gilliland II with Indianapolis-based Gilliland & Caudill. But that status often means ALFs simply don't allow other agencies in to see their patients, which is a violation of Medicare patient choice regulations.

In addition to those two hot buttons, some HHAs appear to be disregarding the OIG's directions, contained in its model home health compliance guidance, to make sure they aren't duplicating ALF services under state regulations, says Hogue.

Tischer welcomes the OIG's probe into the area, noting that agencies "trying to do the right thing are getting killed" by those offering kickbacks to facilities for their business. "This is widespread, and there has been no enforcement," he tells Eli.

The OIG also might investigate hospital referrals and patient choice under this area, adds attorney Greg Naclerio with Ruskin Moscou Faltischek in Long Island, NY. "If the vast majority of a hospital's patients go to its HHA," the OIG may look at whether the hospital is truly giving patients a choice of providers as required by the Balanced Budget Act of 1997, Naclerio says.

Other project areas addressed in the Work Plan include:

  • Quality. The OIG plans to investigate whether the prospective payment system has affected home care quality, according to the plan. To gauge quality levels, the watchdog agency will look at changes in the level and mix of services offered by HHAs, the number of hospital readmissions and emergency room readmissions, and the number of survey deficiencies.

    HHAs can take a cue from the nursing home industry, which has seen quality under its PPS mushroom into false claims charges, says Naclerio, who formerly worked for New York's fraud control unit. "The tea leaves indicate ... HHAs will be subject to false claims over quality of care," he forecasts.

    The government has argued that if nursing homes submit claims for care that is deemed to be of substandard quality, those claims are false under the False Claims Act, Naclerio relates. Smart agencies will monitor their patients' outcomes carefully and take quick action if their conditions worsen, he advises. When patients are dehydrated, have decubitus ulcers or accidents, federal investigators may break out false claims charges.

  • Therapy. HHAs receive around an additional $1,800 per episode when patients need 10 or more therapy visits, and the OIG isn't letting that significant reimbursement impact go unnoticed. The agency will look at the number of therapy visits provided per episode and the duration of visits to determine if the visits are in compliance with Medicare regulations, it says.

    So agencies that always furnish just at or over 10 visits or that provide quickie visits could be held up for recoupments at best, fraud at worst. "We've been warning people about this a long way out," Tischer notes. "If anyone's out there doing lots of 10- to 11-visit episodes, they deserve to get their butts kicked," he argues.

    Adequate, convincing documentation will be the key to proving that therapy visits are necessary, Naclerio notes.

    But HHAs that are furnishing legitimate therapy visits still may have trouble if their utilization changed significantly from their pre-PPS stats, Hogue worries. "Agencies will have great difficulty in accounting for any differences in these areas for patients with basically the same clinical picture," she fears. "The question for agencies will then be: When were you either underutilizing or overutilizing? It has to be one or the other."

  • PPS Payment. Proper coding, unbundling and overlapping episodes all will fall under the OIG's catchall category of "payment system controls." The OIG most likely means coding of the OASIS document, notes attorney Jeff Schneider with Hogan & Hartson in New York City. The agency is particularly interested in that area because the OASIS instrument is so complicated to fill out and is so essential to setting reimbursement for the patient's episode, Schneider explains.

    As with the quality issue, agencies can look to nursing homes' troubles with their own OASIS-like instrument, the MDS, for hints on what to expect, Schneider says. Recoupments are a major feature, and the OIG already has started the process with a series of reports on M0175 (see Eli's HCW, Vol. XII, No. 27, p. 210).

  • Access and Outliers. The OIG has two separate reports planned on beneficiary access to home care services and outlier payments, but the two issues might overlap, Tischer suggests.

    HHAs have used only about half of the expected outlier amount under PPS, which may indicate they have stopped admitting patients who need heavy care. Since the outset of PPS, "the average number of visits per episode of care has fallen dramatically," the Work Plan notes. "Home health agencies may be reluctant to accept beneficiaries who need extensive services."

  • CPO. Although home health and hospice care plan oversight investigations will focus on physicians submitting CPO claims, it is home care providers who could suffer if docs are afraid to claim such services, and thus make fewer referrals to home care. Physician CPO reimbursement increased from $15 million in 2000 to $41 million in 2001, the OIG says.

    The large number of OIG home health projects planned for 2004 indicates the break from fraud scrutiny HHAs saw under the transition to PPS is over, Schneider points out.

    Editor's Note: The Work Plan is at www.oig.hhs.gov/publications/workplan.html#1.

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