Home Health & Hospice Week

Home health agencies are relieved Medicare is finally taking action against rampant fraud in the industry, but legitimate providers are likely to get caught in the crossfire.

The Centers for Medicare & Medicaid Services has announced "aggressive new steps" to find and stamp out fraud in Medicare, with particular attention to home health agencies and durable medical equipment suppliers. The initiative includes increased medical review and unannounced site visits of HHAs and suppliers.

Zero in: CMS is taking a special interest in Miami-Dade county in Florida. The agency has suspended payments for the top 10 agencies of outlier billing, according to press reports.

The feds took such action due to the extraordinary statistics for the county. Reimbursement for Miami HHAs is on track to reach $1.3 billion this year -- a 1,300 percent increase over the last five years and 20 times the national average. In contrast, the beneficiary population has risen only about 10 percent in that time, reports USA Today.

And the main problem is billing of outlier patients. These patients are usually receiving daily visits for insulin injections. The top 10 agencies that received suspension derive between 65 and 80 percent of their Medicare revenues from outlier pa-tients, reports The Miami Herald.

In Miami, outlier payments account for 60 percent of the HHA total. That's compared to 6 percent in the rest of the nation. And so far this year, Miami-Dade's home health spending is six times larger than that for Los Angeles County, Calif. That's despite the fact that L.A. has a beneficiary population three times larger than Miami's.

Reaction: "I'm amazed that it has taken this long, but I'm relieved that CMS now reports that they have gotten into gear," says Bob Wardwell with the Visiting Nurse Associations of America. "If CMS is able to successfully target the abusers and leave the compliant folks alone, I know our VNAs will welcome it with open arms," says Wardwell, a former CMS official.

HHA Medicare fraud has been allowed to go unchecked and this sort of crackdown is sorely needed, says Gene Tischer with trade group Associated Home Health Industries of Florida. "I'm just thrilled," Tischer tells Eli.

The National Association for Home Care & Hospice "is pleased that the Medicare program is finally taking action, since the home care industry notified CMS several years ago about fraudulent outlier billing," NAHC points out.

Bystanders harmed: While agencies are eager to see fraudulent providers called onto the carpet, they are likely to see "collateral damage" from the crackdown efforts, Wardwell warns. "There is sad precedent in the past for CMS and [the HHS Office of Inspector General] not being fully effective in targeting their efforts."

HHAs in Florida are already seeing this problem, says attorney Lester Perling with Broad & Cassel in Ft. Lauderdale. Some of the payment suspensions are affecting legitimate agencies, Per-ling notes.

"Payment suspensions can be a death sentence," Perling tells Eli. There is no appeal for suspensions. CMS is "shooting first and asking questions later."

The initiative may prove more burdensome than helpful to the industry, Perling worries.

One agency under suspension is Las Mer-cedes Home Care in Miami, the Herald reports. Administrator Francis J. Trullenque defended his company's medical and business standards, saying physicians are ultimately responsible for determining whether patients need referrals.

Most agencies won't see anything as dramatic as a full payment suspension under the new initiative, however. CMS says the crackdown in-volves these steps:

• Making unannounced site visits to double check that suppliers and home health agencies are actually in business;

• Implementing extensive pre- and post-payment review of claims submitted by suppliers, home health agencies, and ordering or referring physicians;

• Validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians;

• Verifying the relationship between physicians who order a large volume of DMEPOS or home health visits and the beneficiaries for whom they ordered these services; and

• Identifying and visiting high-risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.

The beneficiary visits have already begun in Miami, USA Today notes. In one example, investigators had trouble catching a supposedly homebound patient actually at home.

And all 334 Medicare HHAs in Miami-Dade will have to reenroll in the program, press reports say.

While increased medical review will be a resource drain, it shouldn't cause considerable worry for legitimate agencies, contends consultant Judy Adams with LarsonAllen based in Charlotte, N.C. "If the services being provided are medically reasonable and necessary and supported through good documentation, a home health agency does not have anything to fear from the review," Adams says.

In fact, agencies that have been doing the right thing for years will be glad to see a crackdown on excessive services, Adams believes. "The ex-treme volume of the abuses in the Medicare system by individual providers and suppliers ... still causes amazement in most providers," Adams says. They can't believe "that no one in the CMS network recognized these were occurring or thought to use the existing pre- and post-payment review systems to verify the appropriateness of the billings."

Many of the "new" steps CMS is taking are things they already had authority to do, points out consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas. For example, CMS should be sure that HHAs have offices before they give them a license, Boyd chastises.

Boyd worries that agencies will see cash flow problems if claims are requested for review, then sit on hold because there aren't enough reviewers to look at them. HHAs should be sure to secure a line of credit or build up cash reserves in anticipation of such slow-downs, Boyd recommends.

If agencies are hit with a payment suspension, they should be proactive in working with CMS and the contractor to resolve it, Perling counsels.

Information gap: Tischer takes CMS to task for failing to issue specifics about the crackdown. "There's nothing in writing" about the payment suspension details, he says.