Home Health & Hospice Week

Lower gas prices lead to lower reimbursement level in 2006.

Now that record-setting gas prices have receded, so will the Internal Revenue Service's mileage rate.

Back in September, the IRS raised its rate an unprecedented 20 percent to 48.5 cents per mile (see Eli's HCW, Vol. XIV, No. 33). But now it has set a new rate of 44.5 cents to take effect Jan. 1.

"The IRS made a special one-time adjustment for the last four months of 2005... in response to a sharp increase in gas prices, which topped $3 a gallon," the agency notes in a release. "The 2006 mileage rates reflect that gas prices have dropped," IRS Commissioner Mark Everson says in the statement.

The change may be good news for home health agencies struggling to reimburse employees at the IRS rate, but bad news for employees who received the extra funds. Many agencies weren't able to raise pay levels to the new rate anyway--and may not reach this payment level either, observers note.

• If you make a billing mistake because you relied on bogus advice from your Medicare contractor, at least you may not have to pay any interest on the overpayment, according to Centers for Medicare & Medicaid Services Transmittal 739, dated Nov. 1. The transmittal implements a Medicare Moderniza-tion Act provision to waive penalties when you follow "erroneous guidance."

• The CMS Administrator has reversed the Provider Reimbursement Review Board decision that favored Potomac Home Health Care in Rockville, MD (see Eli's HCW, Vol. XIV, No. 41), reports Potomac's attorney, Joel Hamme with Powers Pyles Sutter & Verville in Washington, DC. Potomac will join forces with another agency facing a reversal over per-visit therapist pay, Erwine's Home Health Care Inc. in Kingston, PA, to file an appeal in federal court.

The Administrator's conduct in these cases is "both shameful and cynical," Hamme says in a release. "It is designed simply to avoid making Medicare reimbursement payments that the government itself has effectively conceded--and that the courts have unanimously concluded--must lawfully be paid." The HHAs are seeking other agencies with similar pending appeals to join their suit, Hamme reports.

• The U.S. Department of Justice is dropping its antitrust probe into Vermont's home health industry, but that doesn't mean there aren't changes in store for the state's HHAs.

The DOJ is closing its investigation because the Certificate of Need (CON) state passed the Home Health Act of 2005, which will create more competition, the agency says in a release.

The Justice Department urges state officials to "critically evaluate the agencies' arguments for maintaining the status quo and keeping out competition." The state can use the provisions in the act to allow more competitors to become certified, according to the DOJ.

• Outpatient therapy caps are back. Barring congressional intervention, Medicare will limit payments for outpatient therapy services starting in January, according to CMS' Nov. 18 Transmittal 759. The limits will be $1,740 for occupational therapy and $1,740 for speech language pathology and physical therapy services combined. The caps don't affect therapy furnished under the home health benefit.

• Arcadia Resources is on a buying binge. The Southfield, MI-based home health and durable medical equipment company recently announced that it completed the purchase of O2 Plus, a respiratory and DME supplier in San Fernando, CA.

Also last month, Arcadia's wholly owned subsidiary, American Oxygen & Medical Equipment, completed an asset purchase of Madrid Medical, a respiratory and DME supplier in Lafayette, IN.

• Reverse mortgages are proving so popular that lawmakers are calling to expand them. Many seniors use reverse mortgages, where they draw equity out of their homes, to fund long-term care like private-pay home care. The bank makes the money back by selling the home when the residents die, or allowing the residents' heirs to repay the loan.

The number of reverse mortgages has more than doubled from 2003 to 2005 and Congress earlier this year raised the cap on Federal Housing Administration-insured reverse mortgages from 150,000 to 250,000, reports Gannet News Service. Rep. Michael G. Fitzpatrick (R-PA) and Sen. Rick Santorum (R-PA) have introduced legislation to lift the FHA cap on mortgages altogether, the service says.

• An Ohio task force's efforts to detect Medicaid home health care fraud has resulted in four unrelated indictments against Ohio providers.

In the first, a federal grand jury indicted Community Home Health Services Inc. in Columbus and Kevin Dennis on a myriad of charges, including health care fraud, mail fraud, money laundering, and for Dennis, various drug charges, according to a release from Ohio U.S. Attorney Gregory G. Lockhart and Ohio Attorney General Jim Petro.

The indictment alleges that between June 2000 and May 2005, Dennis and Community Home Health defrauded Medicaid by billing the program for skilled nursing and home health services that weren't performed. Dennis is also accused of not disclosing a 1997 felony conviction from Rhode Island in his Medicaid provider application. The fraud resulted in payments of $32 million and Dennis used more than $650,000 of it for personal expenses, prosecutors charge.

In the second indictment, Angel Health Care in Columbus and Wilma Kpohanu are charged with billing Medicaid for skilled nursing visits that weren't performed and making false statements. In the third indictment, Hood Medical Services of Columbus and George S. Hood, III are accused of health care fraud and making false statements.

Prosecutors in the cases targeted misconduct such as forging plans of care, reporting fictitious times and dates of service, creating fraudulent bills and/or nursing notes, using unapproved providers to perform services and billing visits for patients in the hospital.

Finally, in September a grand jury indicted Melee Kermue, Wilma Bailey and Hope Home Health Care Inc. of Reynoldsburg on fraud charges. Kermue and Bailey have been arrested in their home country of Liberia and await extradition, the release says.

 • The Department of Health and Human Services has entered into agreements with organizations that will help to promote electronic records in the Gulf Coast region, where many paper records were destroyed in the wake of Hurricane Katrina, HHS says.