Fraud & Abuse:
West Coast Fraud Could Mean Tougher Regulation
Published on Thu Feb 19, 2004
Industry veterans fear ORT-style crackdown on industry is coming.
The honeymoon with the prospective payment system is over, and it could be law-abiding home health agencies who wind up in divorce court. Home health agencies should prepare to get painted with the fraud brush all over again as fraud scams come to light, investigators delve into PPS infractions and high profit margins are alleged. The Centers for Medicare & Medicaid Services has stopped payment to three unnamed Los Angeles-area HHAs after discovering $100 million in fraudulently billed claims, CMS reportedly has told the National Association for Home Care and Hospice. The HHAs, which had been operating for about three years, allegedly secured Medicare beneficiaries' ID numbers and billed for home care services for patients who never received them, reports William Dombi with NAHC's Center for Health Care Law. CMS has recovered about $24 million from the HHAs so far, but no arrests or indictments in relation to the matter have been announced. CMS Region IX Administrator Jeff Flick didn't respond to calls for this story by press time. The warning sign was an exponential increase in the amount of services (and dollars) being billed, Dombi says. When intermediary and program safety contractor investigators looked into it further, the claims were backed up by "perfect" documentation and timing - a sure sign of suspicion.
Meanwhile, an investigation of kickbacks for home care referrals appears to be underway in the Las Vegas area (see Eli's HCW, Vol. XIII, No. 3). It is unclear if the two investigations are related, Dombi notes. The HHS Office of Inspector General has trained its sights on patients' prior hospital stays and on therapy provision, which is very lucrative for HHAs if the visit number is 10 or more. More areas of inquiry are likely to surface as the OIG spots PPS system weaknesses. And the Medicare Payment Advisory Commission continues to insist that HHA profit margins reach enviable heights - an estimated 16.8 percent this year - even though an independently confirmed NAHC study says agencies will actually lose money on average in 2003-2004 (see Eli's HCW, Vol. XIII, No. 5).
Are HHAs Headed For a Fall? Back in the mid 1990s, agencies were opening left and right and spending for home care services rose exponentially. Following close on the heels of the boom was Operation Restore Trust - a severe crack-down on the industry - and the interim payment system that put one-third of HHAs out of business in the late 1990s. Then came PPS in 2000, and a relative breather from fraud and abuse scrutiny while both the industry and Medicare adjusted to the new payment system. Now that the authorities are used to PPS, a case of fraud like the [...]
