(November 23, 2016): The Office of Audit Services, Office of Inspector General (OAS), is in the process of conducting audits of large home health agencies. These audits are being conducted, in part, because the Centers for Medicare and Medicaid Services (CMS) had determined through the Comprehensive Error Rate Testing Program (CERT) that for 2014, there was greater than a 50% error rate nationally in Medicare claims for home health services. Additionally, it is our belief that because the advent of alternative payment methodologies is likely to diminish the relevance of the current process for medical necessity audits in the future, home health agencies are likely to experience a spike in audits of Medicare claims in the near future.
I. Initial Results From Early OIG Home Health Audits:
Irrespective of the motivation behind the audits, the first two audit reports resulted in findings of large error rates with extraordinary recommended refunds of more than $15 million for one agency and more than $8 million for the other. These results were generated by the application of a statistical extrapolation and a recommendation that the results be applied with an attendant request for refunds, not only for the three-year look-back period, but also for earlier years as a result of the “60 day” repayment rule. See Medicare Compliance Review of Excellent Home Care Services, LLC, Report No. A-02-14-01005 (OAS, July 2016); Medicare Compliance Review of Home Health VNA for 2011 and 2012, Report No. A-01-13-00518 (August 2016).
As a result, we are aware of several companies that are now undergoing similar types of audits by OAS. The review of these claims has been subcontracted to Maximus, a Qualified Independent Contractor (“QIC”) with experience in reviewing medical necessity audit determinations.
In the past for claim audits by MACs or ZPICs, clients would frequently submit the medical records without preparing any claim summaries, and instead prepare those summaries for purposes of the appeals process after the initial findings.
Because of the extraordinary refunds that have been recommended by the OAS reports cited, above, coupled with the significant delay in obtaining ALJ hearings after refunds are required, providers that receive notices of these audits may wish to take a more proactive approach to defend the legitimacy of the claims under review, including retaining and working with legal counsel at the beginning stage of this process.
II. What is OIG Requesting in These Home Health Audits?
Specifically, providers undergoing these audits of which we are aware have been asked to submit the medical records for 100 claims. For each of these claims, providers should bates label the pages of the claim. Additionally, they should organize the records so that it is easy to track the various components of the adverse findings of the earlier audit reports, such as face-to-face, nursing, therapy, etc. Finally, they may wish to consider submitting detailed claim summaries that identify how each of the claims meets the various criteria for coverage and payment, that cite to specific pages of the medical record and that are submitted at the time that the client initially submits the medical record. Additionally, to the extent that the initial review discloses gaps or ambiguities that can be appropriately and legitimately supplemented or explained, agencies may wish to accomplish that process up front, rather than risking the potential of adverse findings that might not otherwise accurately reflect the claims. By responding proactively, providers may be able to minimize the likelihood of recommended denials based upon misunderstandings by the reviewers.
Given the magnitude of the findings and recommendations for refunds in the two audit reports published to date, we strongly recommend that providers who are notified that they are to undergo these audits contact legal counsel familiar with responding to audits at the initial stage, rather than waiting for the initial recommendations or draft audit report. Knowledgeable legal counsel familiar with the audit process and the types of individuals conducting the audit, can work effectively with the clinical team to present the records to the audit team in a manner that provides an accurate picture of the claim at the beginning stage, and by doing so, potentially minimize or avoid improper adverse findings prior to the issuance of the audit report .
Michael Cook is the co-chair of Liles Parker’s health care group and has more than 35 years of experience representing providers in regulatory matters, including matters of this nature. Before entering private practice, Michael also represented the Federal regulators of the Medicare and Medicaid programs, is a member of the Board of Medical Assistance Services in Virginia, and has advised the campaigns of a number of candidates for state and federal office. Any entity experiencing an audit of this nature or having questions can contact Michael at (202) 298-8750 or firstname.lastname@example.org.