Home Health & Hospice Week

Major therapy denials and downcodes could spell trouble for industry.

Home health agencies that thought therapy medical review was already tough may see a whole new level of surveillance, thanks to a new report from the HHS Office of Inspector General.

A report the OIG issued in May denied or downcoded 50 percent of a Connecticut agency's high-therapy claims reviewed (see Eli's HCW, Vol. XIV, No. 21). Now a new report denies or downcodes a whopping 88 percent of a California HHA's high-therapy claims reviewed. "Both [reports] have had significant downcodes and/or denials," notes reimbursement consultant M. Aaron Little with BKD in Springfield, MO.

More trouble ahead: And the news isn't going to get any better with the next report in the OIG's series, Little warns. A client the OIG currently is auditing for high-therapy claims has seen about half of its claims downcoded or denied, Little tells Eli.

"There is no doubt that the OIG and the intermediaries are targeting therapy services for increased review," cautions Abilene, TX-based reimbursement consultant Bobby Dusek. "That old saying 'follow the money' applies here. The simple fact is that 10 therapy visits doubles the amount of reimbursement for a normal episode."

When episodes have 10 to 12 therapy visits, medical reviewers must deny only one to three therapy visits to recoup more than $2,000, Dusek notes. "That adds up," Dusek says.

HHA Disputes Denied Visits

And those therapy denials have helped add up to a hefty $187,627 overpayment for Los Angeles-based Red Oak Home Health Services. The OIG had regional home health intermediary United Government Services review 74 of Red Oak's claims with 10 to 12 therapy visits from Oct. 1, 2002 through Sept. 30, 2003, according to the newest report (A-09-04-00050).

UGS denied or downcoded 64 claims for including medically unnecessary or unreasonable therapy and/or nursing services. And the intermediary denied one claim because the HHA failed to secure signed physician orders on time.

About $150,000 of the overpayment was due to therapy visit denials and $33,000 due to nursing visit denials, the OIG says. Nearly $5,000 was due to the late physician orders.

In its response to the report, Red Oak concedes that it failed to secure a signed plan of care from the physician for one episode. But the HHA disputes the medical reviewers' findings on medical necessity and reasonableness.

"We believe that we had adequately addressed the medical necessity and reasonableness of the services provided," Administrator Inga Tamazova and Director of Patient Care and Services Armen Adamyan say in their response letter included in the report. Examples provided show "Medical Review had arbitrarily and unfairly denied skilled visits," the letter says. "While documentation may not have been of the highest standards ... they have established the propriety of the claim."

Red Oak didn't respond to inquiries for this story.

Beware False Claims, Criminal Charges

Therapy denials and downcodes can carry a hefty price tag. But they could come with even worse consequences - fraud charges, warns Burtonsville, MD-based health care attorney Elizabeth Hogue. "Over-utilization may result in allegations of false claims," Hogue points out. "Providers may be criminally prosecuted and/or pursued civilly."

Bottom line: HHAs are no doubt headed for more intense review of their therapy visits than ever before, experts warn.

The controversy surrounding the therapy upgrade is likely to spark changes to the prospective payment system, Hogue notes. That may include requiring certain OASIS question scores to support a high-therapy designation. 

Note: The new OIG audit report is at www.oig.hhs.gov/oas/reports/region9/90400050.pdf.