Medicare Compliance & Reimbursement

Plus:  Home care agency owner nabbed for defrauding Medicare of $40 million.

The Centers for Medicare & Medicaid Services (CMS) is requiring Medicare carriers to change their claims processing systems.

Effective on July 1, 2007, the Multi-Carrier System (MCS) will process all diagnosis information that providers report on their claims for Medicare payment determination, instead of considering only the first four diagnosis codes on the claims, according to an Oct. 27 CMS transmittal.

The MCS has been considering all diagnosis codes on claims for clinical laboratory services, but has done so manually and for no other types of claims, CMS says. The agency wants to expand this to all claims and is requesting that the MCS change its systems so that by July 1, 2007, it automatically recognizes all diagnosis codes and has updated its coding edits and audits.

For more information, you can read the transmittal at www.cms.hhs.gov/transmittals/downloads/R1095CP.pdf. Stolen Laptop Causes Privacy Headache For Another HHA A stolen laptop is once again creating privacy headaches for a home care provider. A thief took from a nurse's car a laptop computer containing patient information, including home addresses and Social Security numbers, for 14,000 patients of Allina Hospitals & Clinics OB home care program, reports the Minneapolis Star Tribune.

Minneapolis-based Allina is offering free credit monitoring services to its patients, the newspaper reports. The health system doubts the information has been accessed because doing so requires two passwords, a spokesperson told the Tribune. California U.S. Attorney Cracking Down On Illegal Kickbacks, Medicare Fraud A registered nurse who at one time owned the two largest home health agencies (HHAs) in California has pleaded guilty to defrauding Medicare of $40 million and filing false tax returns, U.S. Attorney Debra Wong Yang says in a release.

Lourdes "Lulu" Perez owned and operated Provident Home Health Care Services Inc. in Los Angeles and Tri-Regional Home Health Care Inc. in San Dimas.

According to information unsealed last month, Perez and people working with her defrauded Medicare by paying illegal kickbacks for referrals, billing for patients who weren't homebound and didn't medically need home health services, billing for services not rendered, and creating false medical records to support the fraudulent claims, the release says.

Former Provident director of nursing Margaret Tan also is pleading guilty in the case.

The charges resulted from a payroll clerk at Provident, Marietta Diaz, filing a whistleblower lawsuit against Perez, the release notes. Medicare suspended payments to Provident and Tri-Regional in October 2003. The government has recovered nearly $34 million from Perez, and Diaz received more than 20 percent of the settlement.