Home Health & Hospice Week

Recent studies cast critical light on Medicare Advantage plans.

One of the Obama administration's first health care actions is widely predicted to be proposing reductions to Medicare Advantage plans' payment rates, and the result could be fewer MA patients on your rolls.

Insurance companies offering MA plans profited $1.3 billion more on them in 2006 than predicted, a new Government Accountability Office report has found. In addition, "the federal government's spending on the Medicare Advantage (MA) program has grown substantially in recent years, from approximately $60 billion in 2006 and $77 billion in 2007 to an estimated $91 billion in 2008," the GAO says in the Dec. 8 report, "Medicare Advantage Organizations: Actual Expenses and Profits Com-pared to Projections for 2006" (GAO-09-132R).

On average in 2006, MA plans earned profits of 6.6 percent, compared with the 4.1 percent they had projected, the GAO says. They also spent 83.3 percent of revenue on medical expenses, compared with the nearly 87 percent that was projected.

"The accuracy of MA organizations' projections is important because, in addition to determining Medicare payments, these projections also affect the extent to which MA beneficiaries receive additional benefits not provided under FFS and the amounts beneficiaries pay in cost sharing and premiums," the GAO explains. "For example, if MA organizations had more accurately projected their revenues and expenses ... they would have been able to provide beneficiaries with additional benefits or cost-sharing reductions, and still maintain the level of profits projected."

In comments on the report, the Centers for Medicare & Medicaid Services defends the program. "The result ... is well within the prevailing range of such differences for a one-year-ahead estimate," CMS Acting Administrator Kerry Weems says. MA organizations' higher-than-projected profits were due primarily to higher-than-projected revenues from Medicare, Weems adds.

House Ways and Means Health Subcommit-tee Chair Pete Stark (D-Calif.) requested the analysis after the Medicare Payment Advisory Com-mission said Medicare spends on average 13 percent more on MA plans than traditional fee for service.

The GAO report "puts to bed this idea [that] the plans are offering tremendous extra benefits with the overpayments," Stark tells the Associated Press. "The overpayments are going to profits."

Another report: A separate GAO report released Dec. 15 found that beneficiaries enrolled in private fee for service (PFFS) MA plans paid higher costs for home care.

For example: "One sponsor of PFFS plans increased the share of the cost for which beneficiaries were responsible from 30 percent to 70 percent if the beneficiaries did not contact the plan before obtaining certain durable [medical] equipment," the OIG says in "Characteristics, Financial Risks, and Disenrollment Rates of Beneficiaries in Private Fee-for-Service Plans" (GAO-09-25).

The GAO wants CMS to "investigate the extent to which PFFS beneficiaries face unexpected costs for not contacting their plan before receiving care," the report recommends.

Meanwhile, the HHS Office of Inspector General has issued a report about MA Special Needs Plans (SNPs). SNPs are supposed to manage high-risk patients, but the OIG found that "the type and severity of the potentially inappropriate drug pairs that SNP beneficiaries were exposed to varied little from those of other MA [prescription drug plan] beneficiaries."

Resources: The GAO reports are at www.gao.gov/cgi-bin/getrpt?GAO-09-132R and www.gao.gov/cgi-bin/getrpt?GAO-09-25. The OIG report is at www.oig.hhs.gov/oei/reports/oei-05-07-00490.pdf.

• CMS is getting snippy with oxygen suppliers over the payment changes that take effect Jan. 1. CMS has heard concerns about the oxygen change from Medicare beneficiaries and insurance counselors in Nebraska, Ohio, South Carolina, and other states, says Laurence Wilson of CMS.

Wilson says the concerns are unfounded and in many cases have resulted from misleading representations by oxygen equipment suppliers, according to the Associated Press. CMS will take enforcement action against oxygen equipment suppliers that have misled Medicare beneficiaries, ranging from a warning letter to the revocation of supplier billing numbers, Wilson threatens.

"Beneficiaries will continue to get oxygen as long as they need it," CMS says in a Medicare Consumer Alert on oxygen released Dec. 17. "The supplier is required to perform any repairs or provide replacements at no cost to beneficiaries until the beneficiary has used the equipment for 5 years."

If suppliers don't follow those rules, CMS directs beneficiaries to report them by calling the 1-800-MEDICARE number.

CMS goes into more details in a beneficiary tip sheet outlining how payment for oxygen and oxygen equipment has changed. "Your supplier has been paid over 36 months for furnishing your oxygen and oxygen equipment for up to 5 years, and your supplier is required to continue to maintain the oxygen equipment (in good working order) and furnish the equipment and any necessary supplies and accessories, as long as you need it until the 5 year period ends," the tip sheet says.

Meanwhile, the American Association for Homecare is urging its members to support a last-ditch effort to get the punishing payment change delayed. Members of Congress can sign onto a Dear Colleague letter circulated by Reps. Heath Shuler (D-N.C.) and Tom Price (R-Ga.). "Without adequate recognition of the services that home oxygen providers furnish, the quality of care that patients have come to expect will deteriorate, leading to an increase in the number of emergency room visits," says the letter that lawmakers will send to CMS.

• Home health agencies served by regional home health intermediary Palmetto GBA with claims stuck in location SM95HG may need help.

The claims are stuck because multiple submissions are receiving the same Document Control Numbers (DCNs), Palmetto explains on its Web site. The Fiscal Intermediary Shared System is testing a fix for the issue, but it's not in place yet.

Consider this: "Providers experiencing financial difficulties may request an accelerated payment," Palmetto tells agencies on its site. Request forms and submission instructions are on Palmetto's Web site.

• Providers accredited by the Joint Commission have a new sentinel event to worry about. Prevention of technology-related health care errors is the Oakbrook Terrace, Ill.-based accrediting body's newest Sentinel Event Alert topic.

"Implementation of technology and related devices is not a guarantee for success, and may actually jeopardize the quality and safety of patient care," says the organization formerly known as JCAHO in a release.

The Commission recommends 13 steps health care providers should take to reduce the risk of technology-related errors. They include looking for possible risks in how caregivers carry out their work and resolving these issues before putting technology into place; involving the caregivers who will use the technology; training everyone who will be using the technology and providing frequent refresher courses; making clear who is authorized and responsible for technology; continually seeking ways to improve safety and discover errors; avoiding distractions for staff using technology; monitoring and reporting errors and near misses to find the causes; and protecting the security of information.

"The overall safety and effectiveness of technology in health care ultimately depend on its human users," the Joint Commission says. "Any form of technology can have a negative impact on the quality and safety of care if it is de-signed or implemented improperly or is misinterpreted."

Resource: More information is at www.jointcommission.org/SentinelEvents/SentinelEventAlert/sea_42.htm.

• A Mississippi physician has been arrested for fraud related to in-home physical therapy visits, according to the HHS Office of Inspector General.

Physician Cassandra Faye Thomas, owner and operator of Central MS Physical Medicine Inc., allegedly fraudulently billed Medicare for $16 million in bogus PT services in the home.

The Dec. 3 indictment filed in the U.S. District Court for the Southern District of Mississippi, Jackson Division, charges Thomas with conspiracy, health care fraud, making false statements, theft of public money, and wire fraud, the OIG says in a release.

"According to the indictment, the so-called physical therapy services were provided in patients' homes by unqualified, inadequately trained, unlicensed technicians with no supervision and then billed as though Dr. Thomas had provided or supervised the services," the OIG charges.

The case is part of a larger initiative involving PT practices in Mississippi, the OIG notes. In another settled case, "Progressive Physical Medicine Inc. submitted claims to the Medicare program falsely claiming that in-home physical therapy services had been rendered by the medical director or by a clinic employee under the physician's direct supervision," the OIG notes. "In fact, the services were provided by unlicensed and unsupervised employees."

PPM submitted more than $3 million in claims to Medicare and received more than $1 million in payments, the OIG notes. The owner was sentenced to 5 years in prison and ordered to pay more than $1 million in restitution.

• Florida HHAs and hospices now have a new Program Safeguard Contractor.

Effective Dec. 15, 2008, the PSC for home health and hospice providers in Florida is Safe-Guard Services, Palmetto GBA says on its Web site. TriCenturion, a Palmetto affiliate, "is no longer responsible for Regional Home Health and Hospice Intermediary (RHHI) fraud investigations in Florida."

Information about SGS is online at www.edssafeguardservices.eds-gov.com.

• Regional chain LHC Group Inc. is expanding its service area to its 17th state. Lafayette, La.-based LHC will buy the stock of Centralia, Wash.-based Northwest Healthcare Alliance Inc., which operates under the name Assured Home Health and Hospice.

Assured has four home health locations and five hospice locations in the certificate of need (CON) state, LHC notes in a release. Assured's annual net revenue is about $10.2 million.

Assured is an employee-owned company that successfully sued health system Providence Health System in 2003 over charges of patient steering to the system's own HHAs (see Eli's HCW, Vol. XIII, No. 41, p. 325).