Home Health Compliance Risks are a Significant Issue for Texas and Oklahoma Agencies

Agencies Should Fully Evaluate Their Home Health Compliance Risks.

(March 21, 2012): Over the past few weeks, several important events have occurred which should have home health agencies in Texas, Oklahoma and the rest of the country rethinking the adequacy of their existing compliance efforts. The home health compliance practices of many agencies have long been a concern of the Department of Health and Human Services, Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS). It is therefore essential that agencies assess their home health compliance risks. Last week, the OIG issued yet another report recommending that CMS further tighten its oversight of home health compliance through the implementation of additional sanctions for non-compliant home health agencies. Notably, OIG’s report has been issued literally "on the heels" of a significant home health fraud investigation centered in the Dallas, Texas area which was reportedly initiated by Health Integrity, the Zone Program Integrity Contractor (ZPIC) covering Texas and Oklahoma.

I. The OIG’s Home Health Report of Fraud and Abuse:

On March 2, 2012, the OIG issued a report entitled, "Intermediate Sanctions for Noncompliant Home Health Agencies" which examined CMS’ ongoing efforts to identify and sanction home health agencies that were non-compliant with Medicare’s applicable conditions of participation. As detailed in the report, CMS (formerly known as the Health Care Financing Administration (HCFA)) was directed in 1987 to develop and implement "intermediate sanctions" against home health providers violating Medicare rules. These sanctions were anticipated to include civil monetary penalties (CMPs), Medicare payment suspension, and even appointment of temporary management of a noncompliant agency. Initially required to implement these sanctions under the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987), CMS issued a Notice of Proposed Rulemaking in 1991, but subsequently withdrew this notice in 2000.

CMS has stated that it anticipates publishing new proposed rules in September 2012 addressing these "intermediate sanctions." Frankly, home health providers and their associates cannot continue down the current path. While both CMS and the OIG recognize the important role played by home health agencies in the care and treatment of homebound Medicare beneficiaries, the government has made it abundantly clear that participating providers must fully comply with applicable medical necessity, coverage, documentation, coding and billing rules. Non-compliant providers are being immediately suspended and / or excluded from participating in the Medicare program. Moreover, health care providers who engage in nefarious activities are being aggressively prosecuted.

II. Health Integrity’s Audit of Home Health Agencies:

Since winning the contract in 2009, Health Integrity, the Zone 4 ZPIC covering Texas, Oklahoma, New Mexico and Colorado, has conducted a wide variety of Medicare post-payment audits throughout Zone 4. To their credit, Health Integrity’s post-payment audits have not been limited to merely large metropolitan areas. Rather, the ZPIC is in the process of "leaving no stone unturned," conducting home health compliance audits and reviews throughout Zone 4, regardless of size, revenues and / or location.

To be clear, Health Integrity’s audits have not been limited to only home health services. The ZPIC has actively reviewed the operational, coding and billing practices of a wide variety of Part B health care providers in Zone 4. Nevertheless, the ZPIC does appear to have redoubled its audits of home health compliance for Texas and Oklahoma providers who appear to be outliers through data-mining activities. After reviewing the homebound status of both prior and current patients, clinicians working for Health Integrity have been thoroughly assessing the care and treatment provided by billing home health agencies. After carefully assessing the medical records forwarded by the home health agency, in many cases Health Integrity has concluded that it is appropriate to seek extrapolated damages based on the Medicare post-payment audit conducted.

III. Health Integrity is on the Front Line of Home Health Fraud Identification:

Despite the fact that most Texas home health agencies are doing their best to operate within the four corners of the law, there are still a number of providers who are continuing to engage in wrongdoing. Texas home health providers recently received significant negative media coverage for fraudulent and abusive billing practices allegedly committed by agencies within their ranks. As you may have heard, just last week a physician and several home health agency "recruiters" in the Dallas-Fort Worth area were indicted in the largest Medicare fraud scheme in history, allegedly totaling nearly $375 million for home health services either not needed or never provided. Additionally, it was noted that over 75 home health agencies to whom referrals were made have also been implicated in the wrongdoing. Such an enormous scheme only further demonstrates the fact that fraudulent activity in home health services is continuing, despite the fact that most Texas home health providers are well-meaning organizations, trying in good faith to provide medically necessary services to our nation’s most sick and disabled. Nevertheless, such accusations only increase suspicion and scrutiny of the entire home health industry in this region.

In a separate incident, a news reporter recently had a healthy, yet elderly, woman pose undercover as a potential home health patient when visiting a physician in South Texas. The reporter noted that the healthy patient was allegedly improperly diagnosed and certified as qualified for home health services. While some providers may be concerned about the use of patients in undercover sting operations such as this, the fact is that improper conduct is occurring, at both the physician referral and the home health agency level, clearly illustrating why law enforcement is concerned that fraud is continuing to occur in this area of practice. In light of these and similar cases, it is clear why Health Integrity appears to be "ramping up" its reviews of home health providers throughout Texas and Oklahoma.

IV. What Steps Can an Agency Take to Home Health Compliance Risks?

To be clear, there is no proverbial "silver bullet" that can be used by a home health agency to avoid the scrutiny of Health Integrity and / or law enforcement. Every home health agency in Texas and Oklahoma should expect to be audited. Rather than wait for such an eventuality, home health agencies should affirmatively review their operations, coding and billing practices to ensure that their practices squarely fall within the rules. Although not all-inclusive, the following five steps can serve as an excellent starting point when preparing for an audit of your agency’s home health claims:

Recommendation #1: Don’t assume that your current practices are compliant, check them out! Conduct a "gap" analysis and implement an effective Compliance Plan. While most, if not all, home health agencies will profess to have a Compliance Plan already in place, the real question is whether the existing plan is "effective," or merely a sample that was obtained by the agency in the past. No two home health agencies are alike. As a first step, a home health provider needs to engage qualified legal counsel to advise the organization on whether the agency is properly operating at a baseline level of compliance. If not, remedial steps must be taken so that the agency can move forward in a compliant fashion.

As you will recall, Section 6401 of the Affordable Care Act (ACA) (generally referred to as the "Health Care Reform Act") states, ". . . a provider of medical or other items or services or supplier within a particular industry, sector or category shall, as a condition of enrollment in the program under this Title . . . establish a compliance program". Although HHS-OIG has not announced the deadline for home health agencies to meet this requirement, it is only a matter of time before all health care providers who choose to participate in the Medicare program must have an effective Compliance Plan in place in order to remain a participating provider.

Recommendation #2: As you review your claims, you should abide by the following: First, "If it doesn’t belong to you, give it back." Conversely, "If you don’t owe the money, don’t throw in the towel." One of the attorneys in our firm is regularly asked to speak at provider conventions around the country. For years, he has told providers "If it doesn’t belong to you, give it back." This simple concept covers a lot of ground when it comes to Medicare overpayments and is the single best policy you can employ as a good corporate citizen.

Recommendation #3: Don’t merely focus on your claims. Are your business practices fully compliant with applicable laws and regulations? Health Integrity and other ZPICs serve an essential role in identifying overpayments and other wrongdoing by health care providers. While an audit will almost always include a request for medical records, you should keep in mind that Health Integrity will not merely be examining your medical documentation. Should you receive a request for documents, it will probably be broken into two major parts. The first section will likely be focused on business-related records such as the following:

"Business contracts or agreements with other providers, suppliers, physicians, businesses or individuals in place during a specific period. Additionally, any verbal agreements must be summarized in writing.

A listing of all current and former employees (employed during a specific period), along with their hire date, termination date, reason for leaving, title, qualifications, last known address, phone number.

  • "A list of all practice locations, along with their address and phone number."
  • "Leases."
  • "Employment agreements."
  • "Medical Director contracts." "

One purpose of this section is to assist the ZPIC in identifying potential business practices which may constitute a violation of the Federal Anti-Kickback Statute, Stark Laws and / or the False Claims Act. Should the ZPIC identify a possible violation, it will readily refer the case to CMS, HHS-OIG and / or DOJ, depending on the nature of the potential violation.

In contrast to the first section of the ZPIC’s request, the second section of the request will usually list the patient records and dates of service to be audited. The number of dates of service audited differs from case to case. Regardless of whether the ZPIC requests supporting documentation related to 5 claims or 50 claims, it is essential that you never ignore a request for information. If additional time is needed to assemble the requested information, call the contractor. Health Integrity has generally been cooperative with providers needing additional time to gather the records being requested.

Recommendation #4: Remember learning how to "drive defensively" in high school? Your documentation practices should be approached in a similar fashion. When is the last time that you have reviewed the applicable documentation requirements set out in the Medicare Administrative Contractor’s latest Local Coverage Determination guidance covering the services you are providing? Health Integrity’s auditors are excellent at identifying one or more deficiencies in your documentation. While you may disagree with the ultimate conclusions reached by their clinicians, you should not completely discount their assessments. Health Integrity’s findings should be carefully analyzed so that any problems with your documentation can be promptly addressed.

Recommendation #5: Engage qualified legal counsel and clinical experts to assist with your efforts. If your home health agency is audited, we strongly recommend that you engage qualified legal counsel, with experience handling this specific type of case. Moreover, don’t be afraid to ask for references and to inquire about the anticipated cost of an engagement. While it is often difficult to estimate legal costs due to the various factors faced when handling a ZPIC audit case, most experienced health lawyers can give you a range of expected legal fees.

V. Conclusion:

While an effective home health Compliance Plan cannot fully shield an organization from risk, the implementation of, and adherence to, an effective plan can greatly assist your home health agency in identifying weaknesses and taking corrective action before an audit occurs. Now is the time to ensure that your practices are compliant – after an audit occurs, it may be too late.

Robert Liles Healthcare Lawyer

Liles Parker is a full service health law firm, providing compliance reviews, "gap analyses" and training to home health providers and their staff. Our attorneys are also experienced in representing home health providers in the administrative appeal of overpayments identified in the post-payment audit process. Should you have any questions, please Robert W. Liles at 1 (800) 475-1906 for a free consultation.