Home Health & Hospice Week

DME is in the spotlight again.

The feds are stepping up efforts to crack down on Medicare fraud and abuse involving home medical equipment--and not a moment too soon for industry trade groups and federal watchdogs.

The U.S. Department of Health and Human Services announced May 9 that the first phase of a new targeted criminal, civil and administrative effort against fraud had led to 38 arrests in southern Florida. The so-called "strike force" is targeting suppliers of durable medical equipment and infusion therapy.

The news comes on the heels of a report from the Government Accountability Office suggesting that the Centers for Medicare & Medicaid Services failed to implement automated controls to flag unusual charges, a shortcoming that opened the floodgates for fraud.

For example, Medicare paid more than $2 million for braces for patients whose earlier amputations negated the need for the devices, the GAO said.

Too little, too late: Soon after HHS announced the arrests, the American Association for Homecare issued a statement praising the strike force that netted the arrests in Florida, but taking CMS to task for failing so far "to effectively exercise its already ample authority to combat fraud and abuse."

"Accreditation and tightened restrictions on entities that are allowed to obtain billing privileges will go a long way toward establishing an environment where unscrupulous companies cannot operate," AAHomecare's Tyler Wilson said in a statement.

Early success: Since the first phase of strike force operations began on March 1, the feds have obtained indictments of individuals and organizations that have collectively billed the Medicare program for more than $142 million, reports HHS.

Charges brought against the defendants in these indictments include conspiracy to defraud the Medicare program, criminal false claims, and violations of the anti-kickback statutes.

• Your patients' outcomes won't be the only official indicators of your care quality much longer, if new patient quality measures materialize as the feds wish.

CMS has process-based quality measures on deck, the agency says in the prospective payment system refinements proposed rule issued April 27. The agency would like to propose next year some "patient-level process measures" as part of the home health quality improvement program, according to the proposed rule. CMS hopes to implement such measures by 2010.

The agency also continues to develop a patient satisfaction survey as part of the HHQI initiative.

CMS will work with the Agency for Healthcare Research and Quality (AHRQ) to field test the Home Health Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey later this year, the rule says.

• If you're frustrated by Medicare enrollment delays, they may be your own fault, according to a report from the HHS Office of Inspector General.

There were two reasons for long delays in processing enrollment applications after Medicare instituted the Provider Enrollment, Chain and Ownership System (PECOS) as of July 2005, the OIG says in report 07-05-00100.

First, one Part B carrier had a backlog of applications waiting to be processed that accounted for 52 percent of the nationwide total. This carrier couldn't explain the delays.

And secondly, 41 percent of applications nationwide were held up because providers didn't respond to requests for information that was missing or incomplete on their applications. This finding could strengthen the contractors in blaming providers, instead of their own shortcomings, for enrollment delays.

The OIG did note that 61 percent of Medicare contractors had problems accessing PECOS.

The contractors reported that CMS sent them messages telling them to use PECOS only during certain hours of the day. The contractors also had a problem getting or using PECOS user IDs for their own employees, and this made it harder for them to process applications quickly.

• CMS has announced the next round of grants aimed at keeping seniors in their own homes, and this time it's awarding a whopping $547 million. The agency announced $23 million in such grants earlier this year (see Eli's HCW, Vol. XVI, No. 3).

The latest awards are part of a $1.75 billion outlay over five years, 2007 to 2011, "to help shift Medicaid's traditional emphasis on institutional care to a system offering greater choices that include home and community-based services," CMS says in a release. Thirteen states and the District of Columbia expect to move 14,000 people into community-based and home care using these grants, CMS says.

Rebalancing act: "The concept of money following the person to the most appropriate setting improves beneficiary satisfaction while reducing Medicaid costs," CMS Acting Administrator Leslie Norwalk says in the release. "We intend to keep taking steps to remove barriers and rebalance the options for Medicaid-funded long-term care."

The grants, which are part of the Bush Administration's New Freedom Initiative, will fund de-monstration projects where the government will pay a higher matching federal rate for Medicaid beneficiaries to move out of nursing homes and into the community.

"The higher matching rate will be paid for one year after an individual moves out of an institution and into the community," CMS explains.

The states participating in the money-follows-the-person grants are Delaware, District of Columbia, Georgia, Hawaii, Illinois, Kansas, Kentucky, Louisiana, New Jersey, North Carolina, North Dakota, Oregon, Pennsylvania and Virginia.

Illinois pledges the most "transitions" at 3,357 while Delaware plans the least with 100, according to the May 14 release at www.cms.hhs.gov/apps/media/press_releases.asp. More information on MFP grants is at www.cms.hhs.gov/DeficitReductionAct/20_MFP.asp.

• If you've seen payment delays from regional home health intermediary Palmetto GBA, you're not alone. PGBA has identified 12,000 home health agency and hospice claims that incorrectly rejected or returned to provider (RTP'd), the RHHI says on its Web site.

The problem began when requests for anticipated payment (RAPs) rejected with reason code U538F and hospice Notice of Elections (81A-82A) rejected with reason code U5106, Palmetto explains. The unprocessed earlier claims caused the final HHA and hospice claims to reject with edit 38107 and U5106, respectively.

Palmetto will make all corrections by June 2 without requiring provider action, the Web site says.

• Providers that want to succeed at the Department Appeals Board should probably avoid bashing the feds rather than presenting a legal argument. So indicates a recent dismissal of one home health agency's appeal of a Medicare certification termination.

High Tech Home Health in Davie, FL appealed its March 2005 termination to the DAB. Florida Agency for Health Care Administration surveyors found the agency substantially out of compliance with eight conditions of participation in February 2005 and upon a re-survey, found High Tech still out of compliance with five COPs (see Eli's HCW, Vol. XV, No. 38).

High Tech started out its prehearing memorandum with "It is important for this Appeals Board to understand just how historically awful CMS, HCFA ('Health Care Finance Administration'), and AHCA ... have been in managing and regulating the Medicare home health program in Florida and the United States for the past twenty years," the DAB notes in its April dismissal of the agency's appeal (CR 1583).

The agency then set out five counts it wanted to litigate: "Wasting of Federal Funds," "Mass Felony Murder," "Breach of Contract," "CMS Improperly Used the Survey Process," and "HIGH TECH Is Not a Threat to Patients."

After numerous disregarded instructions, the DAB dismissed the appeal as not being within its jurisdiction, among other reasons.

• Power mobility giant The Scooter Store has agreed to pay $4 million to settle allegations that it filed fraudulent Medicare and Medicaid claims.

The New Braunfels, TX-based firm will also give up claim to more than $13 million in pending reimbursement, the Department of Justice announced May 11 (United States v. The Scooter Store, W.D. Tex., No. SA05-CA-0034 and SA05-CA-0033).

Scooter Store founder Doug Harrison will contribute $500,000 toward the settlement of the false claims case. He also agreed to give up dividends from his shares in the company for the next year in exchange for a release of his personal liability, DOJ said in a statement.

Watch out: The whistleblower who called the feds' attention to the alleged false claims will rake in a cool $3.2 million, according to DOJ. That kind of settlement may encourage potential whistleblowers at other suppliers to act.

For the next five years, The Scooter Store will operate under an OIG corporate integrity agreement.

The Scooter Store maintained that it did nothing wrong when it billed Medicare for the power wheelchairs. "Unfortunately, the unstated policy of this government is to limit costs to the Medicare program and do whatever it can to curtail access to power wheelchairs and scooters," Harrison says in a statement. "Our company got caught in the middle."

• Publicly traded hospice chain VistaCare Inc. has hit rough seas. The Scottsdale, AZ-based for-profit reported a $3.2 million loss on revenues of $59.0 million for the quarter ended March 31, compared to a $2.0 million loss on $55.9 million in revenues for the same period in 2006.

"Our operating results for the second quarter were disappointing and unacceptable," VistaCare CEO Richard Slager says in a release.

The VistaCare Board of Directors has established a special committee to review strategic alternatives and has engaged a consulting firm to advise the committee, according to the release. The company already closed four underperforming programs and one inpatient unit during the quarter.

Dallas-based Odyssey HealthCare Inc. was not in quite such dire straits for the quarter, but did report almost flat revenue that resulted in lower profits for the company. 

The chain reported net income of $3.7 million on revenues of $103.4 million for the quarter ended March 31, down from a $5.8 million profit on $102.6 million in revenues for the same period in 2006.