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Medicare Compliance & Reimbursement

Home Health:

HHAs Prepare For A Waiver Crackdown

Published on Wed Jul 23, 2003

Waiver providers should expect more audits and fraud charges.

The trend of more regulatory enforcement in Medicaid is about to reach home care, and the results may have providers leaving waiver programs in droves.

Seventy percent of the Medicaid waivers for the elderly the General Accounting Office recently reviewed "documented one or more quality-of-care problems," the GAO says in a new report, "Federal Oversight of Growing Medicaid Home and Community-Based Waivers Should Be Strengthened" (GAO-03-576).

The Centers for Medicare & Medicaid Services "does not adequately monitor" the rapidly growing state waivers, or "the quality of beneficiary care," the GAO maintains. Lack of federal and state oversight of the popular programs under home and community-based service (HCBS) waivers means the programs are prone to quality problems such as failure to provide authorized services, weaknesses in plans of care and inadequate case management, the federal watchdog charges.

Other troubles such as a lack of complaint systems and enforcement tools also are a product of weak oversight, the report says.

Every state but Arizona has a waiver program for the elderly, the GAO notes. The waivers allow Medicaid programs to furnish alternative care that keeps beneficiaries out of institutions and in their homes without all the requirements of the full Medicaid program. Usually that means offering the services to a limited population, such as the elderly that meet certain requirements. The programs often have waiting lists.

Slim Profit Margins To Get Slimmer 

While the report is an indictment of the federal and state governments, the criticism's impact will be felt at the provider level.

"When the feds tighten up on the states, the states will tighten up on providers," warns William Dombi, vice president for law with the National Association for Home Care's Center for Health Care Law.

Home health agencies and durable medical equipment suppliers that service waiver patients are in for a host of new activities under increased state scrutiny, predicts Burtonsville, MD-based attorney Elizabeth Hogue. Those include:

  • increased reviews and audits;

  • recoupment of monies; and

  • fraud allegations of substandard care.

    "Recoupment of monies is likely to be reinforced by the need to balance state budgets that are bleeding red ink," Hogue forecasts. "The idea that monies can be recouped through retrospective audits and reviews will be very seductive for government regulators."

    That means waiver providers already operating under slim profit margins are likely to rethink their participation in the programs. "We may see a significant decrease in the number of agencies willing to participate" in waivers, Hogue says.

    The criticism of waiver programs comes at a time when the Bush Administration and CMS have been pushing consumer-directed care waivers, where beneficiaries manage their own services and hire their own caregivers, notes Bob Wardwell with the Visiting Nurse Associations of America. Consumer-directed models "provide significantly more challenges in quality assurance," notes Wardwell, who formerly managed the waiver program when he was employed by CMS.

    Dombi hopes the home care industry doesn't become the scapegoat for these oversight problems while those participating in consumer-directed care programs go scot-free. The government "should look at consumer-directed care models as well as corporate providers of care," he insists.

    To combat the quality risks inherent in CD waivers, CMS might want to explore "some use of Medicare certified agencies to support quality assurance in Medicaid waivers," Wardwell suggests.

    Senators Call For Waiver Hold 

    Finance Committee Chairman Charles Grassley (R-IA) and Sen. John Breaux (D-LA), who requested the GAO study, think "these waivers should be put on hold until the department gets a handle on the quality of care going to older and disabled Americans," according to a July 7 letter the senators sent to the Department of Health and Human Services. "Right now, there's no accountability, and that's wrong," says the letter.

    Grassley and Breaux upbraid HHS for its "systemic failures ... in assuring quality of care in its waiver program." They set a July 28 deadline for HHS to propose ways to resolve the problems - ways that almost surely will lead to more regulatory burdens for waiver providers.

    The senators do state their commitment to home care, though. "We will continue to support the current trend toward home and community-based services, and away from unnecessary institutionalization," but only if it comes with "sufficient oversight and quality assurance mechanisms," the letter says.

    When CMS first envisioned the waiver program, the plan was to promote program flexibility by minimizing external federal standards, Wardwell tells MLR. Thus, CMS built "quality-reinforcing strategies" such as patient satisfaction into the program, but there have been some "lapses," he admits.

    In considering the GAO and Grassley's criticisms, CMS will have to establish an acceptable level of program risk versus regulations. The more regulation, the less risk - but the more cost. Conversely, less regulation is more risk - but less cost.

    To see the GAO report, go to www.gao.gov/new.items/d03576.pdf.

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