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Home Health Revocation Actions by Medicare are Expanding Around the Country

September 28, 2020 by  
Filed under Home Health & Hospice

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Have you received a letter proposing the home health revocation of your agency?(September 28, 2020):  Last September, CMS published a Final Rule titled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.”[1]Among its many changes, the Final Rule significantly expanded the reasons that may be asserted by the Centers for Medicare and Medicaid Services (CMS) when revoking a health care provider’s enrollment and Medicare billing privileges.  The Final Rule also extended the period that a health care provider can be barred from reenrolling in the Medicare program.  Since the issuance of the Final Rule, the enrollment and Medicare billing privileges of an increasing number of home health agencies nationwide have been revoked.   This article examines several of the primary regulatory bases that have been cited by CMS when pursuing a home health revocation action.  It also examines a number of the issues that a home health agency should consider when faced with a potential revocation action.

I.  Summary Listing of the Reasons a Home Health Agency’s Medicare Enrollment May be Revoked:

With the implementation of the Final Rule, the number of reasons upon which CMS may seek to revoke the enrollment and Medicare billing privileges of a participating provider or supplier grew from 14 to 22.[2]  A summary listing of the expanded list of reasons for revocation is set out below.

  • Revocation Reason #1. Noncompliance. 42 C.F.R. §424.535(a)(1).

  • Revocation Reason #2. Provider or supplier conduct. 42 C.F.R. §424.535(a)(2).

  • Revocation Reason #3. Felonies. 42 C.F.R. §424.535(a)(3).

  • Revocation Reason #4. False or misleading information. 42 C.F.R. §424.535(a)(4).

  • Revocation Reason #5. On-site review. 42 C.F.R. §424.535(a)(5).

  • Revocation Reason #6. Grounds related to provider or supplier screening requirements. 42 C.F.R. §424.535(a)(6).

  • Revocation Reason #7. Misuse of billing number. 42 C.F.R. §424.535(a)(7).

  • Revocation Reason #8. Abuse of billing privileges. 42 C.F.R. §424.535(a)(8).

  • Revocation Reason #9. Failure to report. 42 C.F.R. §424.535(a)(9).

  • Revocation Reason #10. Failure to document or provide CMS access to documentation. 42 C.F.R. §424.535(a)(10).

  • Revocation Reason #11. Initial reserve operating funds. 42 C.F.R. §424.535(a)(11).

  • Revocation Reason #12. Other program termination. 42 C.F.R. §424.535(a)(12).

  • Revocation Reason #13. Prescribing authority. 42 C.F.R. §424.535(a)(13).

  • Revocation Reason #14. Improper prescribing practices. 42 C.F.R. §424.535(a)(14).

  • Revocation Reason #15. Reserved. 42 C.F.R. §424.535(a)(15).

  • Revocation Reason #16. Reserved. 42 C.F.R. §424.535(a)(16).

  • Revocation Reason #17. NEW — Debt referred to the United States Department of Treasury. 42 C.F.R. §424.535(a)(17).

  • Revocation Reason #18. NEW Revoked under different name, numerical identifier or business identity. Under 42 C.F.R. §424.535(a)(18).

  • Revocation Reason #19. NEW Affiliation that poses an undue risk. 42 C.F.R. §424.535(a)(19).

  • Revocation Reason #20. NEWBilling from a non-compliant location. 42 C.F.R. §424.535(a)(20),

  • Revocation Reason #21. NEW — Abusive ordering, certifying, referring, or prescribing of Part A or B services, items or drugs. 42 C.F.R. §424.535(a)(21).

  • Revocation Reason #22. NEWPatient harm. 42 C.F.R. §424.535(a)(22).

For a detailed discussion of the 22 revocation reasons summarized above, you may wish to review our article titled “42 CFR Sec. 424.535(a) Medicare Revocation Actions — Your Medicare Billing Privileges Can be Revoked for a Host of New Reasons. Are You Facing a Medicare Revocation Action? If so, You Must Act Fast to Preserve Your Appeal Rights.”

II.  Primary Reasons Cited in Home Health Revocation Actions:

In reviewing the 22 reasons that CMS may revoke a home health agency’s enrollment and Medicare billing privileges, it is worth noting that only Revocation Reason #11. Initial reserve operating funds. 42 C.F.R. §424.535(a)(11), specifically targets home health agencies.  Under this provision, CMS can revoke the Medicare billing privileges of a home health agency if the agency fails to provide documentation that CMS can use to verify that the home health agency meets the initial reserve operating funds requirement described in 42 C.F.R. §489.28(a).  Although this particular basis for Medicare revocation is explicitly aimed at home health agencies, to date, it is rarely been cited by CMS as the primary reason for revoking an agency’s enrollment and Medicare billing privileges.

Of the remaining revocation reasons cited above, the reasons CMS has repeatedly relied on a home health revocation action are Revocation Reason #5. On-site review. 42 C.F.R. §424.535(a)(5) and Revocation Reason #8. Abuse of billing privileges. 42 C.F.R. §424.535(a)(8).  Both of these reasons for revocation are discussed in more detail below, along with recent home health Medicare revocation case decisions examining these regulatory violations.

III.On-Site Review” as a Basis for a Home Health Revocation Action:

In recent years, our attorneys have represented numerous home health agencies whose enrollment and Medicare billing privileges have been revoked due to the fact that an unannounced, on-site visit by a CMS-contracted inspector found that the provider was no longer operational to furnish Medicare covered home health services. As 42 C.F.R. §424.535(a)(5) provides:

“(5) On-site review. Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is either of the following:

(i) No longer operational to furnish Medicare-covered items or services.

(ii) Otherwise fails to satisfy any Medicare enrollment requirement.” (emphasis added).

What does this mean?  Simply put, if a CMS-contracted inspector conducts an unannounced site visit of a home health agency’s existing certified location and finds that the agency is no longer “operational” at that location, the home health agency’s enrollment and Medicare billing privileges are subject to revocation.  A home health agency is considered to be operational[3] if it:

“. . . has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.”

Many of these revocation cases are the result of a home health agency’s failure to properly notify the appropriate MAC that it intends to move from its surveyed and certified location to a new site (within its current approved geographic area).[4]  Home health agencies must also submit an amended Form CMS-855A, along with any other required documentation within 90 days.[5]  A recent DAB decision affirmed the revocation of a home health agency by CMS on the basis that an on-site review of the provider’s surveyed location found that the agency was not operational.

March 2020.  Texas Home Health Agency. Reason for Revocation – On-Site Review.  In a recent case decided by an Administrative Law Judge (ALJ) of the HHS, Departmental Appeals Board (DAB), the ALJ reviewed a revocation case involving a Texas home health agency that allegedly failed to meet its regulatory requirements under 42 C.F.R. §424.535(a)(5).

The facts in the case are fairly straightforward. In July 2017, a CMS-contractor inspector attempted to conduct an unannounced site visit of a home health agency in Tyler, Texas.  When the inspector arrived at the agency address on file with CMS and the MAC, she found that the building at that location was “[v]acant and locked.”  The inspector also found that no employees were present and there were no signs of customer activity.”

At appeal, the home health agency argued that the regulations require that a provider NOT the provider’s physical practice location was required to be “open to the public” for the purpose of providing health care related services.  The home health agency argued that since its staff delivered home health services in the homes of patients and not in a single practice location, it was, in fact, “open to the public.”  Based on the facts presented, the DAB ruled that since the home health agency was not operational at the address on file with CMS, it was in violation of the requirements under 42 C.F.R. §424.535(a)(5)(i).  The DAB therefore affirmed the revocation action and the two-year enrollment bar that had been imposed.

III. “Abuse of Billing Privileges” as a Basis for a Home Health Revocation Action:

As a review of 2019 and 2020 DAB decisions will confirm, CMS is increasingly citing a home health provider’s abuse of billing privileges when exercising its Medicare revocation authority.  Most of the revocation actions taken during this period alleged that the home health agency “has a pattern or practice of submitting claims that fail to meet requirements.” [6] As 42 C.F.R. §424.535(a)(8) provides:

“(8) Abuse of billing privileges. Abuse of billing privileges includes either of the following:

(i) The provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service. These instances include but are not limited to the following situations:

(A) Where the beneficiary is deceased.

(B) The directing physician or beneficiary is not in the state or country when services were furnished.

(C) When the equipment necessary for testing is not present where the testing is said to have occurred.

(ii) CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements. In making this determination, CMS considers, as appropriate or applicable, the following:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions.

(D) The length of time over which the pattern has continued.

(E) How long the provider or supplier has been enrolled in Medicare.

(F) Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice described in this paragraph.”  (emphasis added).

What does this mean?  When analyzing this revocation reason, it is worth noting that it is comprised of two parts, paragraphs (i) and (ii).  Under 42 C.F.R. §424.535(a)(8)(i), several straightforward criteria are outlined in sections (i)(A)-(C) that can serve as the basis for revoking a provider’s enrollment and Medicare billing privileges.  In contrast, paragraph (ii) permits CMS to revoke a provider’s enrollment if it determines that the provider “has a pattern or practice of submitting claims that fail to meet Medicare requirements.”   Although sections (ii)(A)-(F) are intended to provide a framework that can be used by CMS to determine if a “pattern or practice” of improper billing conduct is present, in our opinion this reason for revocation is still remarkably broad and subject to the vagaries of the discretion of CMS and its contractors.  An overview of one of the more interesting Medicare revocation cases brought under 42 C.F.R. §424.535(a)(8) is set out below.

May 2020.  Texas Home Health Agency. Reason for Revocation — Abuse of billing privileges:  In this case, an ALJ was faced with a case where a Texas home health agency was alleged to have submitted 38 claims (associated with 13 beneficiaries) to Medicare for services that were allegedly provided without a valid certification of eligibility.

In this case, the 13 home health Medicare beneficiaries at issue listed a Houston physician as the ordering / certifying physician.  Qlarant, the Unified Program Integrity Contractor (UPIC) for Texas, conducted a review of these claims and discussed them with the physician who allegedly ordered the home health services.  The physician attested that he did not order home health services for any of the 13 beneficiaries under review.  Based on Qlarant’s findings, Palmetto (the assigned Medicare Administrative Contractor) revoked the home health agency’s enrollment and Medicare billing privileges, citing violations of 42 C.F.R. § 424.535(a)(8)(ii). In support of its decision, Palmetto noted that the physician denied ordering the home health services.  Palmetto further stated that the physician did not have a prior Part B relationship with the 13 beneficiaries at issue.[7] Therefore, Palmetto took the position that the Physician was not involved in the care, treatment, or monitoring of the 13 beneficiaries whose medical records he reviewed.

On appeal, it was argued that a licensed nurse practitioner working under a valid collaboration agreement with a Houston-based physician properly certified the need for home health services in connection with these 13 beneficiaries.  As the home health agency noted, the supervising physician had signed a letter which stated:

To whom it may concern: This is [to] certify that I [Physician] authorized [Nurse Practitioner] NP of [Pasadena Medical Clinic] to sign all Home Health orders on my behalf as her supervising physician.”

In its arguments, the home health agency conceded that “all related orders were signed and submitted by [Physician] and/or [Nurse Practitioner] of [Pasadena Medical Clinic].”  On appeal, the home health agency acknowledged that the claims were noncompliant because there was an impermissible delegation of his authority to sign home health certification documents” by the nurse practitioner.  Therefore, the DAB found that the claims did not qualify for coverage and payment.  The DAB also ruled that it was appropriate to revoke the home health agency’s enrollment and Medicare billing privileges for violating 42 C.F.R. § 424.535(a)(8), “Abuse of Billing Privileges.”  The ALJ also upheld the three-year enrollment bar that had been imposed by CMS.

As a final point, it is worth noting that during the period at issue (August 2016 through November 2017), Medicare paid for home health services only if a physician certifies the beneficiary’s eligibility for the home health benefit – not a nurse practitioner.[8]

IV.  Length of a Medicare Enrollment or Re-enrollment Bar:

As the case examples above reflect, until recently a health care provider could only be barred from being enrolled in the Medicare program for a period of one to three years.  Under the Final Rule effective November 4, 2019,[9] this period was extended to ten years[10] (under certain circumstances, a provider may be barred from enrolling or re-enrolling in the Medicare program for up to 20 years).[11]

V.  Anticipated Impact of New Medicare Revocation Authorities:

Six of the reasons that may be relied on by CMS when revoking a home health agency’s enrollment and Medicare billing privileges are new and became effective November 4, 2019.  Of the six new reasons, we believe that Revocation Reason #17: Debt referred to the United States Department of Treasury.  42 C.F.R. §424.535(a)(17) may represent the most significant risk to your home health agency.  As 42 C.F.R. §424.535(a)(17) provides:

“(17) Debt referred to the United States Department of Treasury. The provider or supplier has an existing debt that CMS appropriately refers to the United States Department of Treasury. In determining whether a revocation under this paragraph (a)(17) is appropriate, CMS considers the following factors:

(i) The reason(s) for the failure to fully repay the debt (to the extent this can be determined).

(ii) Whether the provider or supplier has attempted to repay the debt (to the extent this can be determined).

(iii) Whether the provider or supplier has responded to CMS’s requests for payment (to the extent this can be determined).

(iv) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.

(v) The amount of the debt.

(vi) Any other evidence that CMS deems relevant to its determination.”

What does this mean?  Many home health agencies around the country have been subjected to postpayment audits by UPICs (or their predecessor contractors, ZPICs).  Alleged overpayments in these cases have been as high as $10 million.  As you are likely aware, the Medicare administrative appeals process used to appeal these alleged debts has been hopelessly overwhelmed by the appeal of alleged debts identified in audits by UPICs, ZPICs and RACs.  From a practical standpoint, if your home health agency files for a hearing before an ALJ, it will be an average of 3.9 years before your case gets adjudicated.

Assuming that you haven’t paid-off the alleged debt, while your administrative appeal is pending, CMS and its contractors will be required under the Debt Collection Improvement Act of 1996 (DCIA) to refer eligible delinquent debt to the Department of Treasury (Treasury) for collection or offset through the Treasury Offset Program (TOP).  Upon receipt of the referral, Treasury or one of its contracted collection agencies will initiate proceedings to satisfy the alleged debt.

We can typically get Treasury to place its collection efforts on hold while an alleged Medicare overpayment is actively being appealed,  Unfortunately, with the implementation of 42 C.F.R. §424.535(a)(17), CMS is now also able to revoke a home health agency’s enrollment and Medicare billing procedures after referring an alleged debt to Treasury for collection.

VI.  Responding to a Proposed Home Health Revocation Action:

We cannot overstate the seriousness of a home health revocation action.  For most home health agencies, traditional Medicare is the largest payor, with Medicaid typically constituting the second-largest payor.  From a practical standpoint, if your home health agency’s Medicare enrollment and billing privileges are revoked, it will be difficult, if not impossible, for your company to remain solvent.

It is therefore crucial that you contact experienced health law counsel to represent you when you first receive notice of a revocation action.  The appeals procedures followed in a revocation case is quite different from that employed in the appeal of a claim denial or an alleged overpayment.  Liles Parker attorneys have extensive experience representing health care providers and suppliers in challenging the imposition of a Medicare revocation action.  Is your home health agency facing revocation?  Give us a call for a free consultation.  1 (800) 475-1906.

Robert W. LilesRobert W. Liles and the health lawyers at Liles Parker, Attorneys & Counselors at Law have extensive experience representing health care providers and suppliers nationwide in Medicare revocation actions.  Has CMS proposed that your enrollment and Medicare billing privileges be revoked?  Give us a call for a free consultation.  We can be reached at:  1 (800) 475-1906.

[1] The Final Rule under 42 C.F.R. §424.535(a), was published in order to implement sections 1866(j)(5) and 1902(kk)(3) of the Social Security Act (as amended by the Affordable Care Act).

[2] Two of the new reasons for revocation have not yet been announced.  Placeholder slots remain open at 42 C.F.R. §424.535(a)(15) and (16).

[3] The definition of “operational” is set out at 42 C.F.R. §424.502.

[4] For additional information, please see CMS guidance titled Home Health Agencies (HHAs): Change of Address Notification of the Medicare Administrative Contractor (MAC).”

[5] See 42 C.F.R. §424.516(e)(2).

[6] The revocation reason “Abuse of Billing Privileges” was added to the existing list of revocation reasons that may be asserted by CMS effective February 3, 2015.  79 Fed. Reg. at 72,513 (adding paragraph (ii) to 42 C.F.R. § 424.535(a)(8)).

[7] While not explicitly stated, we suspect that this means that the so-called ordering physician had not billed Medicare for an Evaluation and Management (E/M) service in the course of caring for these 13 patients.

[8] Prior to the emergence of COVID-19, CMS had identified limited exceptions to this rule.  For example, under Maryland law, a nurse practitioner can provide primary care services.  Effective January 1, 2020, CMS allowed Medicare-enrolled nurse practitioners to certify home health services for Medicare beneficiaries as part of the Maryland Total Cost of Care (TCOC) Model. See MLM Matters Number MM 11330Additionally, as provided Section 3708 of the CARES Act, CMS is temporarily allowing a Medicare-eligible home health patient to be under the care of a nurse practitioner, clinical nurse specialist, or a physician assistant who is working in accordance with State law (for Medicare claims with a “claim through date” on or after March 1, 2020).  For additional information on the temporary regulatory waivers that CMS has implemented in response to COVID-19, see the agency’s guidance entitled “Home Health Agencies: CMS Flexibilities to Fight COVID-19,” issued September 8, 2020.

[9]Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process”

[10] See 42 C.F.R. §424.535(c)(1)(i).

[11] See 42 C.F.R. §424.535(c)(1)(ii).

Recent Developments in Personal Care and Other Home and Community-Based Services in Medicaid and Medicare

March 23, 2020 by  
Filed under Home Health & Hospice

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(March 23, 2020): Until recently, personal care services, such as home health aides, were not covered under the Medicare program unless they were part of a skilled service where the beneficiary was homebound.  However, beginning with calendar year 2019, the Medicare program has expanded the ability of plans that participate in the Medicare Advantage program (“MA Plans”) to offer these services as a separate supplemental service at their option.  Additionally, as part of the Bipartisan Budget Act of 2018,[2] Congress expanded the supplemental benefits that MA Plans could offer to encompass certain benefits that were not primarily health related for certain chronically ill patients beginning with calendar year 2020.  This paper will discuss those changes, some of the major compliance issues that providers of personal care services face, and how the Medicaid program addresses these services.

I.   The Medicare Advantage (“MA”) Changes to Cover Additional Supplemental Benefits:

A. The 2019 MA Changes to Cover Personal and Other Home and Community Based Type Services

MA Plans are permitted to cover certain benefits that are not included in the fee for service Medicare program (“Original Medicare”).  Generally, these have taken the form of benefits such as dental and vision services.  However, to be covered as supplemental benefits, the items and services have been required to be “primarily health related.” [3]

Prior to calendar year 2019, the Centers for Medicare and Medicaid Services (“CMS”) has considered an item or service to be “primarily health related” only if the primary purpose is to “prevent, cure, or diminish an illness or injury.”[4] However, CMS had not considered a service to fit within this definition if the primary purpose is daily maintenance.

In the 2019 Final Call Letter, CMS announced that it would change the definition of that term to cover services under certain conditions “even if a significant purpose of the item is daily maintenance.”[5] Thus, under the new interpretation, “in order to be ‘primarily health related’ … [an item or service] must diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and health care utilization.”

The intent of the change was to provide plans the flexibility to offer supplemental benefits that enhance the quality of life and improve outcomes.  The service, however, also must be medically appropriate, recommended by a licensed provider as part of a plan of care, and cannot include items or services that are solely to induce enrollment.

A letter from CMS to MA Plans dated April 27, 2018 provided further guidance on the new interpretation of “primary health related.”[6]  The letter listed a number of examples of benefits that MA Plans could provide beginning in 2019 under the revised definition including in-home support services, adult day care services, home-based palliative care, support for caregivers enrollees, medically-approved non-opioid pain management, stand-alone memory fitness benefit, home and bathroom safety devices and  modifications, transportation, and over-the-counter benefits.  The letter further described in-home support benefits as:

“in-home services to assist individuals with disabilities and/or medical conditions in performing ADLs and IADLs within the home to compensate for physical impairments, ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization.  Services must be provided by individuals licensed by the state to provide personal care services, or in a manner that is otherwise consistent with state requirements.” (Emphasis added.)

Finally, in a speech at the Medicare Prescription Drug Plan Spring Conference, Seema Verma, Administrator, CMS, stated that “[t]his means that now Medicare Advantage beneficiaries will be provided adult day care services, respite care for caregivers, and in-home assistance with activities like bathing and managing medications.” (Emphasis added.)[7]

B. The 2020 MA Changes to Cover Benefits that are Not Primarily Health Related for Certain Chronically Ill Patients

The Balanced Budget Act of 2018 further expanded the benefits that MA Plans could offer as supplemental benefits to include certain benefits that are not primarily health related for chronically ill beneficiaries if they chose, beginning in 2020.  In the 2020 Final Call Letter, CMS refers to these benefits as Special Supplemental Benefits for the Chronically Ill (“SSBCI”).[8]

Unlike other supplemental benefits, MA Plans are able to offer SSBCI in a non-uniform manner.  Thus, MA Plans will be allowed to vary or target SSBCI to an individual’s particular medical needs.[9]  However, the 2020 Final Call Letter also states that while MA Plans have broad discretion with respect to both non-uniformity and the form of the benefit, itself, the items or services provided must have a reasonable expectation of improving or maintaining the health or overall function of an individual as it relates to the chronic condition or illness.[10]

For the purpose of SSDI, a chronically ill enrollee is one who: “ 1) has one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee; 2) has a high risk of hospitalization or other adverse health outcomes; and 3) requires intensive care coordination.”[11] Currently, CMS will consider any individual with a condition identified as chronic in the list at section 20.1.2 of Chapter 16b of the Medicare Managed Care Manual to meet this criteria.  However, the 2020 Final Call Letter also states that CMS will convene a technical advisory panel to periodically update the list of conditions that satisfy the necessary criteria.[12]

CMS followed up the 2020 Final Call Letter with additional sub-regulatory guidance in the form of a letter to Medicare Advantage Organizations.[13]  That letter listed as examples of permitted benefits, the following: meals beyond a limited basis; food and produce; transportation for non-medical needs; pest control; indoor air quality equipment and services; social needs benefits; complimentary therapies; services supporting self-direction; structural home modifications; and general supports for living.[14]

C. Status of Implementation by MA Plans

Anecdotal information indicates that plans were experimenting with the types and scope of benefits to cover under the reinterpretation of “primarily health related” during the 2019 calendar year.  This was, in part, due to the fact that the 2019 Final Call Letter was not issued until April 2018, just two months before plan bids were due.  Thus, there was a limit on the time within which MA Plans had to determine how to utilize this new flexibility.  Also, the nature of the benefit, coupled with the competition from traditional supplemental benefits such as dental and vision care, almost dictated a need for experimentation and slow implementation.

Nevertheless, two studies by Milliman attempted to encapsulate the manner in which MA Plans had implemented that flexibility in the initial plan year that they were available.[15]  And a more recent Milliman study that was published in November 2019 appears to indicate that a significantly greater number of plans are offering new types of supplemental benefits for the 2020 calendar year.[16]

II.   Compliance Issues in Personal Care:

Personal care services have become extremely popular as other government programs attempt to rebalance services for the elderly and disabled from those that are provided in institutions to those provided in the home.  Additionally, many individuals who otherwise do not qualify for government sponsored long term care under the traditional benefit package also prefer to use personal care aides to enable them to remain in their homes.

However, from a compliance standpoint, personal care provides a number of challenges.  First, aides are frequently low paid, and thus struggle to make a living wage.  Additionally, the work can be difficult.  From an agency perspective, government rates generally are low, thus furthering the need to retain workers at low wage levels and the needs of elderly and disabled clients can be extremely challenging.  Adding to these difficulties is the fact that because the work takes place in the home, it is more challenging to monitor than care provided in the institutional setting.

Over the past years, there have been a number of investigations and prosecutions of home and personal care aides and agencies.  The issues involved in these cases have taken a number of forms but generally arise under several categories.  Thus, conduct that has been prosecuted can range from aides colluding with clients who otherwise would not be eligible for services, falsification of time sheets by aides and clients, operation of an agency by an excluded individual, and theft from elderly clients.

As an example, in 2014 the Federal Bureau of Investigation had a “takedown” of more than twenty individuals and agencies for Medicaid fraud in the District of Columbia.  Allegations involved aides falsifying time sheets for visits that never occurred, sometimes to clients who falsified their eligibility for services, and splitting the Medicaid payments between aides and clients for services that were never provided.  In one instance, an agency owner who had been excluded in Virginia under her maiden name, operated an agency in the District under a different name and allegedly received more than $70 million from the District Medicaid program before being busted.  There were even allegations that one or more aides involved in the conduct transported a patient who had been out of state when services were allegedly delivered, back to the District because they had determined that the company would be making an internal compliance verification visit to check on the delivery of services.[17] These actions resulted in the Director of the District’s Medicaid program estimating that he lost approximately 70% of his providers and temporarily establishing a government operated personal care agency to provide care while the Medicaid program rebuilt its provider pool.

In another example, twelve people, including home care aides and the owners of a home care agency, were indicted for an $87 million Medicaid fraud in Pennsylvania. The allegations included making false Medicaid claims, creating fake employees, misusing customers’ personal information and falsifying documents, and submitting claims for “customers” who were in the hospital, jail, or dead. [18]

As yet another set of examples, two more home care workers were recently sentenced to prison for paying kickbacks to beneficiaries and submitting timesheets to different home care agencies for services that they did not provide, and one for billing for services that she claimed to provide while traveling outside of the United States.  This case also highlights the difficulty of monitoring the service because the aides were alleged to have perpetrated the fraud to the District of Columbia Medicaid program from 2014 through 2018 at eighteen different agencies, despite the major District takedown in 2014.[19]

The Office of the Inspector General at the United States Department of Health and Human Services has issued several reports with recommendations in the area.[20] The most significant would require states to either enroll personal care attendants as providers or require those attendants to register with state Medicaid agencies, assigning each a unique identifier.

Finally, as part of the 20th Century Cures Act, beginning January 1, 2020, all State Medicaid Agencies must require an electronic visit verification (“EVV”) system for Medicaid-funded personal care services to verify that the visits actually occur.[21] States that fail to implement this requirement on a timely basis are subject to an incremental reduction in their Federal Medical Assistance Percentage for these services which ultimately reaches 1%.  CMS is authorized to provide an exception to states to delay implementation for up to one year if they can demonstrate making a good faith effort to comply but have encountered unavoidable delays.  However, the State must apply for, and be granted, the waiver by CMS.[22]

While this provision only applies to personal care services provided under the Medicaid program, these trackers may be at least a partial solution for those agencies that choose to provide these services for MA Plans.  This is especially so since agencies that also participate in Medicaid will already be required to implement EVV for those services, and MA Plans almost certainly will have their own compliance plan requirements as well.

III.   Personal Care and Home and Community Based Services in Medicaid:

Unlike the Medicare program, states have been able to provide home and community-based services, including personal care services, under Medicaid for many years.  While states will vary on how and when they will provide these services to beneficiaries, virtually every state covers personal care services under either its State Plan or one of several waiver authorities.[23]

States are able to provide personal care services under the following authorities taken from a table in a recent Kaiser Family Foundation report[24]:

  1. Home Health Services (required State Plan service):
    • Part-time or intermittent nursing services, home health aide services, and medical supplies, equipment and appliances suitable for use in the home
    • At state option-physical therapy, occupational therapy, and speech pathology and audiology services
  2. Personal Care Services (optional State Plan service)
    • Assistance with self-care (e.g. bathing, dressing) and household activities (e.g. preparing meals)
  3. Community First Choice (optional):
    • Attendant services and supports for beneficiaries who would otherwise require institutional care
    • Income up to 150% FPL or eligible for benefit package that includes nursing home services; state option to expand financial eligibility to those eligible for HCBS waiver
  4. Section 1915(i) (optional):
    • Case management, homemaker/home health aide/personal care services, adult day health, habilitation, respite, day treatment/partial hospitalization, psychosocial rehabilitation, chronic mental health clinic services, and/or other services approved by the Secretary
    • Beneficiaries must be at risk of institutional care
    • Population targeting permitted
  5. Section 1915(c) waiver (optional):
    • Same services as available under Section 1915(i)
    • Beneficiaries must otherwise require institutional care
    • Secretary can waive regular program income and asset limits
    • Cost neutrality required (average per enrollee cost of HCBS cannot exceed average per enrollee cost of institutional care)
    • Enrollment caps permitted
    • Population targeting permitted
  6. Section 1115 waiver (optional):
    • Secretary can waive certain Medicaid requirements and allow states to use Medicaid funds in ways that are not otherwise allowable under federal rules for experimental, pilot, or demonstration projects that are likely to assist in promoting program objectives
    • Federal budget neutrality required
    • HCBS enrollment caps permitted”

These services can be targeted at a variety of beneficiary populations including such groups as seniors, seniors and adults with physical disabilities, individuals with developmental disabilities, individuals with HIV/AIDS, medical fragile technology dependent children, mental health, and TBI and spinal cord injuries.[25]  What is clear is that state Medicaid programs are attempting to rebalance and focus their spending on long term care towards services in the home and community as opposed to institutional care, and that personal care services play an important role in Medicaid.

For a comprehensive understanding of the services and populations that each State is covering under home and community-based services, readers are referred to the Kaiser Family Foundation reports referenced in note 23.

IV.   Conclusion:

The provision of personal care services and other services that address the social determinants of health in the public programs and under private health insurance is evolving and expanding.  What is clear is that there is now a growing understanding at both the state and federal government levels and in the private health insurance market that these services can play a vital role in reducing costs and improving health.  The expansion of the definition of optional supplemental benefits in the MA program, discussed, above, present significant potential opportunities in this area.  However, issues of compliance that have occurred in the past also make it critical that providers seeking to participate in this area understand both the potential benefits and pitfalls in the manner of any participation.

For more on this please check the presentation here given on this topic at the AHLA LTC conference March 2020

personal care servicesAnyone seeking advice in this area should contact Michael Cook[1] at mcook@lilesparker.com or (202) 298-8750 (office), (202) 361-2508 (cell)Michael is a partner and Co-chair of Liles Parker’s Health Care Practice Group.

[1] Michael Cook is a Partner and Co-chair of the Health Care Group of Liles Parker PLLC.  This article was prepared for the American Health Lawyers Association Conference on Long Term Care and the Law in 2020.

[2] Pub. L. 115-123 amending section 1852(a) of the Social Security Act

[3] Medicare Managed Care Manual, Chapter 4, section 30.1

[4] Announcement of Calendar Year (CY) 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (April 2, 2018) (“2019 Final Call Letter”), p. 207 https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2019.pdf

[5] Id. at 207-8

[6] Letter from Kathryn Coleman to Medicare Advantage Organizations and Section 1876 Cost Contract Plans, “Reinterpretation of ‘Primarily Health Related’ for Supplemental Benefits,” dated April 27, 2018 https://www.nahc.org/wp-content/uploads/2018/05/HPMS-Memo-Primarily-Health-Related-4-27-18.pdf

[7]https://www.cms.gov/newsroom/fact-sheets/speech-remarks-cms-administrator-seema-verma-medicare-advantage-and-prescription-drug-plan-spring.  While this guidance has been included only in sub-regulatory guidance to date, CMS recently published a proposed rule that, if adopted, will codify this re-interpretation into its regulations.  See 85 Fed. Reg. 9002, 9210 (February 18, 2020)

[8] Announcement of Calendar Year (CY) 2020 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (April 1, 2019) (“2020 Final Call Letter”), p. 187 https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2020.pdf

[9] Id. at p. 190

[10] Id. See also 83 Fed. Reg. 16440, 16481-2 (April 16, 2018)

[11] See 2020 Final Call Letter at p. 188

[12] Additionally, a recently published proposed rule for Medicare Advantage Contract Year 2021 and 2022, if adopted, would allow plans to target additional chronic conditions. See 85 Fed. Reg. 9002, 9012.

[13] Letter from Kathryn Coleman to Medicare Advantage Organizations, “Implementing Supplemental Benefits for Chronically Ill Enrollees,” dated April 27, 2019

[14]https://www.cms.gov/Medicare/HealthPlans/HealthPlansGenInfo/Downloads/Supplemental_Benefits_Chronically_Ill_HPMS_042419.pdf.  As with the guidance on the new interpretation of primarily health related, the guidance on SSBCI has been sub-regulatory to date.  However, the proposed rule cited at note 7, if adopted, would codify much of this guidance into regulations.  See 85 Fed. Reg. 9002, 9213

[15] LTSS Services in Medicare Advantage Plans – The 2019 Market Landscape and the Challenges Ahead http://www.qa.milliman.com/insight/2019/LTSS-services-in-Medicare-Advantage-Plans/; Review of contract Year 2019 Medicare Advantage Supplemental Health Benefit Offerings https://www.bettermedicarealliance.org/sites/default/files/2018-12/20181207%20Milliman%20%20MA%202019%20Supplemental%20Benefits%20-%20Final.pdf

[16] Review of Contract Year 2020 Medicare Advantage Supplemental Healthcare Benefit Offerings https://www.bettermedicarealliance.org/sites/default/files/2019-11/Review_of_Contract_Year_2020_Medicare_Advantage_Supplemental_Healthcare_Benefit_Offerings.pdf

[17] See FBI Press Release, “More Thank 20 People Arrested Following Investigation Into Widespread Health Care Fraud in D.C. Medicaid Program,” February 20, 2014 https://archives.fbi.gov/archives/washingtondc/press-releases/2014/more-than-20-people-arrested-following-investigations-into-widespread-health-care-fraud-in-d.c.-medicaid-program

[18] See “12 Home Health Workers Indicted for $87 Million Medicaid Fraud,” Home Health Care News, November 27, 2018 https://homehealthcarenews.com/2018/11/12-home-health-workers-indicted-for-87-million-medicaid-fraud/); see also US Department of Justice Press Release, “Two More Defendants Plead Guilty in Multi-Million Dollar Home Health Care Fraud Conspiracy,” January 21, 2020 https://www.justice.gov/usao-wdpa/pr/two-more-defendants-plead-guilty-multi-million-dollar-home-health-care-fraud-conspiracy

[19] See US Attorneys Office for the District of Columbia Press Release, “Two former Personal Care Aides Sentenced to Prison for Defrauding Medicaid,” February 14, 2020 https://www.justice.gov/usao-dc/pr/two-former-personal-care-aides-sentenced-prison-defrauding-medicaid; see also US Attorneys Office for the District of Columbia Press Release, “Former Personal Care Aide Pleads Guilty to Health Care Fraud,” November 22, 2019 https://www.justice.gov/usao-dc/pr/former-personal-care-aide-pleads-guilty-health-care-fraud-1

[20] See “Medicaid Fraud Control Units: Investigation and Prosecution of Fraud and Beneficiary Abuse in Medicaid Personal Care Services,” HHS OIG Brief, OEI-12-16-00500 (December 2017) https://oig.hhs.gov/oei/reports/oei-12-16-00500.pdf; “Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Recommendations (July 2019) https://oig.hhs.gov/reports-and-publications/compendium/files/compendium2019.pdf; “OIG Calls for Additional Oversight of Home Health, Personal Care Service Providers,” Home Health Care News (July 25, 2019) https://homehealthcarenews.com/2019/07/oig-calls-for-additional-oversight-of-home-health-personal-care-service-providers/

[21] Section 12006(a) of the Cures Act (2016)

[22] See CMCS Information Bulletin from Calder Lynch, “Additional EVV Guidance,” dated August 8, 2019

[23] See “Key State Policy Choices About Medicaid Home and Community-Based Services,” M. Musumeci, M. O’Malley Watts, and P. Chidambaram, Kaiser Family Foundation (February 2020) https://www.kff.org/report-section/key-state-policy-choices-about-medicaid-home-and-community-based-services-issue-brief/; “Medicaid Home and Community-Based Services Enrollment Spending, M. O’Malley Watts, M. Musumeci, and P. Chidambaram, Kaiser Family foundation (February 2020) https://www.kff.org/medicaid/issue-brief/medicaid-home-and-community-based-services-enrollment-and-spending/

[24] See note 23, “Medicaid Home and Community-Based Services,” supra, Table 1 at p.4

[25] Id. at pp. 8-9

OIG Has Identified Common Errors by High-Risk Home Health Agencies.  Does Your Home Health Agency Have These Documentation Problems?

September 30, 2019 by  
Filed under Home Health & Hospice

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(September 30, 2019):  On September 5, 2019, the Department of Health & Human Services (HHS), Office of Inspector General (OIG) published an HHS-OIG Data Brief entitled “The Centers for Medicare & Medicaid Services Could Use Comprehensive Error Rate Testing Data To Identify High-Risk Home Health Agencies.”[1]  The purpose of OIG’s review was two-fold:  First, OIG examined the results of “high-risk” home health claims reviews conducted by Comprehensive Error Rate Testing (CERT) contractors during the Fiscal Years (FY) 2014 through 2017 and identified the most common types of errors that resulted in claims denials.  Second, OIG wanted to identify factors that can be used to more readily identify high-risk home health agencies, reduce improper payments and ultimately reduce the home health CERT error rate. The purpose of this article is to examine the common types of home health claims errors identified by CERT contractors and discuss steps that your agency should take when responding to a CERT audit request.

I.  Overview of the CERT Audit Program:

In 1996, the OIG first measured the improper payment rate for traditional Medicare, Fee-for-Service (FFS) claims on a nationwide basis.  The OIG continued to estimate the Medicare FFS improper error rate until 2002.  In 2003, the Centers for Medicare & Medicaid Services (CMS) took over responsibility for handling these measurements.  To do so, CMS implemented the Comprehensive Error Rate Testing (CERT) program.

The CERT program was designed to measure improper payments made under the Medicare FFS program and comply with the Improper Payments Information Act (IPIA).[2] What is considered to be an improper claim?  CERT contractors are specifically tasked with the review of a sample of Part A and Part B claims that have been paid by a Medicare Administrative Contractor (MAC) or a Durable Medical Equipment (DME) MAC.

After pulling a sample of paid Medicare FFS claims, the CERT contractor will then contact the responsible health care provider or supplier and request a copy of the medical documentation associated with the claim at issue.  Upon receipt, the CERT contractor will then audit the claim to determine whether it was correctly paid by the responsible MAC or DME MAC. If the MAC or DME MAC should have denied a claim or paid the claim at a different amount, the claim is considered to be an improper payment.  Each year, CERT contractors review approximately 50,000 Medicare FFS claims.  Based on their findings, a national improper payment rate is calculated.

II.  CERT Audits of Home Health Medicare Claims:

During the period FY 2014 through FY 2017, CERT auditors found that improper payment rates of Medicare FFS claims paid to home health agencies has significantly decreased, from 51% error rate in FY 2014 to 32% error rate in FY 2017.

Estimates of Improper Home Health Agency Payments as Reported by Comprehensive Error Rate TestingOIG Analysis of CERT Audits

III.  The OIG Analysis of CERT Home Health Error Data:

Despite the fact that significant progress by home health agencies has been made, CERT auditors calculated that as of FY 2017, approximately 32% of the Medicare FFS payments made to home health agencies were improper. This error rate is more than three times higher than the overall national improper payment rate of 9.51%.[3]

With the CERT contractor’s findings in mind, the OIG conducted an analysis of the CERT audit results in an effort to identify “high-risk HHAs with high rates of improper payments as well as the common types of errors that caused improperly paid claims.” [4]

As the OIG report notes, there is no definitive list of high-risk HHAs. Therefore, the OIG assembled a list of home health agencies that have had three or more improperly paid claims (as identified by CERT auditors) during the period FY 2014 through FY 2017.

IV.  What Were the OIG’s Findings with Respect to High-Risk Home Health Agencies?

Upon review of the CERT audit findings, the OIG estimated that from FY 2014 through FY 2017, more than $4 billion was paid to high-risk home health agencies.  More significantly, OIG estimates that during this same period, 78% of the CERT-reviewed payments made to high-risk home health agencies were improper.  As the chart below reflects, from FY 2014 to FY 2017, the improper error rate of high-risk home health agencies declined from a high of 81.2% to a low of 72.0%.  Nevertheless, it is important to remember that the error rate for high-risk home health agencies remains more than twice the overall error rate for all home health agencies.

The 87 High-Risk Home Health Agencies’ Error Rate Compared With the Home Health Agency National Error Rate

OIG Analysis of CERT Audits

V.  Primary Claims Errors of High-Risk Home Health Agencies:

Overall, OIG found that more than 90% of the CERT audit denials of high-risk home health agencies were based on “insufficient documentation.”  The primary documentation errors noted included the following:

    • 49% of Face-to-Face Evaluations Did Not Meet Medicare Documentation Guidelines. As Palmetto GBA (the MAC for Texas-based home health agencies) has noted, the most common face-to-face documentation deficiencies identified by CERT auditors included the fact that (1) the documentation was insufficient to show that the physician-patient encounter was related to the primary reason for home care, (2) the documentation was insufficient to show how the patient’s condition supports the patient’s homebound status, and / or (3) the documentation was insufficient to show how a patient’s condition supports the need for skilled services.
    • 16% of Physician Certification and Recertification Requirements Have Not be Properly Documented. Under 42 CFR 424.22(a)(1), a physician must certify that a patient is eligible for Medicare home health services.  The contents of a proper certification must reflect that (1) the individual needs or needed intermittent skilled nursing care or physical therapy or speech-language pathology services, (2) the individual is confined to the home except when receiving outpatient services, (3) a plan for furnishing services has been established and will be or was periodically reviewed by an eligible physician, (4) a face-to-face patient encounter, related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care or within 30 days of the start of care.  Additionally, the face-to-face encounter must be conducted by a physician, nurse practitioner, certified nurse specialist, certified nurse midwife or a physician assistant (as described in 42 CFR 424.22(a)(1)(v)(A) through (B)).

Additional documentation errors included:

  • 9% of Orders were improperly documented or were missing.
  • 9% of Outcome and Assessment Information was not in the OASIS repository or the patient’s medical records.
  • 5% of Plans of Care were not properly documented or were missing.
  • 4% of Progress Notes were not fully documented to support a billed date of service by specific specialists or were missing.
  • 8% Other documentation deficiencies.

VI.  Comments from CMS:

Although CMS acknowledged that home health claims remain problematic, the agency took issue with the OIG’s findings. As the agency wrote:

CMS does not believe this methodology for identifying error-prone HHAs is valid. The CERT program calculates the improper payment rate for the entire Medicare Fee-for-Service program by evaluating a statistically valid stratified random sample of claims to determine if they were paid properly under Medicare coverage, coding, and billing rules. . . However, the service-type improper payment rates do not have similar precision requirements and therefore CERT data is not precise at the provider level.”  (emphasis added).

Regardless of whether you side with the OIG or with CMS, there is no dispute that overall, home health agency documentation remains incomplete and / or missing 32.2% of the time.  Unfortunately, home health agencies in Ohio, Illinois, Texas, North Carolina and Florida (Review Choice Demonstration Project states), are especially vulnerable as the project ramps up in these states.

VII.  Recommendations for Home Health Agencies:

Home health agencies around the country remain under the microscope.  Agency claims are being subjected to Target, Probe & Educate (TPE) audits, Additional Documentation Requests (ADRs), Prepayment Review and Postpayment Audit.  Implementation of the Review Choice Demonstration Project in the five states above further adds to the significant audit risks already faced by home health agencies in these states.

Now, more than ever before, it is imperative that home health agencies conduct periodic internal reviews of their documentation practices to ensure that they are meeting the myriad requirements that have been established by CMS in order for home health claims to qualify for coverage and payment.   Moreover, it is important to keep in mind that there are multiple government contractors that may audit your home health agency at any time.  The following chart provides an overview of the current home health audit landscape.

OIG Analysis of CERT Audits

As a participating provider in the Medicare program, a home health agency is required to have an effective Compliance Program in place.  One of the seven elements of your Compliance Program includes “Monitoring, Auditing and Internal Reporting Systems.”  If you have not already done so, your home health agency needs to periodically conduct internal audits and reviews to better ensure that physicians, nurse practitioners, therapists and staff are properly documenting their services in a compliant fashion.

Robert W. Liles Healthcare AttorneyLiles Parker attorneys have extensive experience representing home health agencies around the country in connection with claims audits by OIG, UPICs, MACs and other CMS contractors.  Notably, many of our health lawyers are also Certified Professional Coders (CPCs) and / or Certified Medical Reimbursement Specialists (CMRSs).  Give us a call if your home health agency is audited, WE CAN HELP. Questions?  Give us a call.  For a free consultation, we can be reached at:  1 (800) 475-1906.

 

[1] Department of Health & Human Services, Office of the Inspector General, HHS OIG Data Brief, A-05-17-00035, entitled “The Centers for Medicare & Medicaid Services Could Use Comprehensive Error Rate Testing Data to Identify High-Risk Home Health Agencies.”  (August 2019).

[2] The IPIA was later amended by the Improper Payments Elimination and Recovery Act (IPERA) of 2010 and the Improper Payments Elimination and Recovery Improvement Act (IPERIA) of 2012.

[3] See https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/

[4] Data Brief:  Analysis of Home Health CERT Data (A-05-17-00035).  Page 3.

Home Health Agency Alert: The Review Choice Demonstration Project start dates for Ohio, Texas, North Carolina and Florida are Around the Corner!

August 7, 2019 by  
Filed under Home Health & Hospice

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The Review Choice Demonstration Project starts(August 7, 2019): This article further updates our articles of February 19th and April 9th on the announcement by CMS of the implementation of the new five year “Review Choice Demonstration Project’ in five states – Illinois, Ohio, Texas, North Carolina and Florida, and the start date for the Demonstration Project in Illinois.

 

I. Background of the Review Choice Demonstration Project:

As background, the Review Choice Demonstration Project is an outgrowth of the Pre-Claim Review Demonstration Project that was initiated in Illinois in August 2016 and paused in April 2017.  Instead of continuing the Pre-Claim Review Demonstration, the Centers for Medicare and Medicaid Services (CMS) announced a new initiative – the Review Choice Demonstration Project to be phased in for the five states listed, above.

Under the Review Choice Demonstration Project, agencies in the affected states will initially select from three options to have their home health claims reviewed:

  • Pre-claim review;
  • Post-payment review; or
  • Minimal post-payment review with a 25% reduction.

After each six-month period agencies with a 90% affirmation or approval rate will be able to choose from two additional options that may be preferable depending upon the circumstances of each agency.  Our February 19th article discusses each of these options.

II. Illinois Home Health Claims are Under the Microscope:

The Review Choice Demonstration Project initially began in Illinois on June 1 for all episodes of care beginning on that date. Prior to that date, Illinois agencies were required to make a selection as to the initial option that they chose for this period between April 17 and May 16.

On July 29, 2019, CMS announced that Ohio will be the second State to implement the Review Choice Demonstration Project.  Home health agencies in Ohio will have from August 16th to September 15th to select an option for the first six-month period, which will begin on September 30, 2019 for all episodes of care starting on or after that date.  Any agency that fails to select an option during this period will be assigned to the second option, above – post-payment review.[1]

CMS also announced that it anticipates 60 – 90 days between beginning the Demonstration in the remaining states of Texas, North Carolina and Florida, and will provide 60-days’ notice in advance of the start date.  While the announcement is somewhat unclear as to whether this period will be spread out for each remaining state or that all three will start on the same date, it is clear that agencies in each of those states and Ohio should begin planning now for that implementation if they have not already done so.

CMS has published links to the Palmetto GBA portal for selecting and registering an option during this period as well as a number of additional resources at https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Choice-Demonstration/Review-Choice-Demonstration-for-Home-Health-Services.html.

III.  Planning for Implementation – Especially in Light of PDGM:

Our February 19th article goes into greater depth in explaining the various options.  However, most importantly, both articles emphasize the importance of thinking through which option makes the most sense for your agency.

Each one presents risks and benefits and the correct choice may differ depending upon the agency’s comfort and experience with denials and documentation, as well as operational capability – the one exception being that the third option – a 25% rate reduction, does not appear to be viable for any agency.  Our earlier articles also sets forth several examples of those risks and benefits and while not exhaustive, is meant to focus agencies on the thought process that your agency will want to consider in making this determination.  We thus cannot strongly enough recommend that each agency take the necessary time to consult with knowledgeable individuals both internal and external in making this determination for each 6-month period, and not wait until the last minute to do so.

Of equal, or perhaps greater, importance is the need for agencies in affected states to have procedures in place to prepare and quickly access documentation to properly support coverage for the cases that they take, and to move this documentation through the system quickly, accurately, and comprehensively.  This is especially important given the advent of the Patient- Driven Groupings Model (PDGM) on January 1, 2020.  For example, coding will be a key issue in driving coverage and payment, and “getting it right” in your documentation will be critical.  Also, addressing initial non-affirmation determinations quickly for agencies that select option 1 will be critical.

Finally, agencies should be updating their compliance and quality assurance programs to respond both to the PDGM payment model and to the Review Choice Demonstration Program.

Liles Parker attorneys have substantial experience in advising and working with home health agencies in preparing them for the audit process which is similar to the process that they will need in responding to the Review Choice Demonstration Project, and in identifying the risks of choosing one option in relation to the others.  For example, one of the additional two options available to agencies that score above the 90% affirmation or approval level in options 1 or 2 during a 6-month period may result in the inadvertent development of a statistical sample that can be utilized to broaden the scope of any denials and recovery.  A number of our attorneys are also Certified Professional Coders who have substantial experience in evaluating home health claims documentation. Finally, we have substantial experience in working with home health agencies in developing and updating their compliance plans.

Michael Cook Healthcare AttorneyAny person wishing a free consultation in this area should contact Michael Cook, the author of this article and Co-chair of the Health Care Group.  Michael Cook can be reached at (202) 298-8750 and mcook@lilesparker.com.

 

[1] We would also note that there was a misprint in our article of April 9.  That article inadvertently referenced that Illinois providers failing to make a choice during the initial registration period would be assigned to the third option.  The corrected reference is to the second option.

Home Health Agency Alert: The Review Choice Demonstration Project is Moving Forward in Illinois Effective June 1, 2019

April 9, 2019 by  
Filed under Home Health & Hospice

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Review Choice Demonstration Project in Illinois(April 9, 2019): This article updates our article of February 19 on the lifting by the Centers for Medicare and Medicaid Services (“CMS”) of the moratorium on the enrollment of new home health agencies in Florida, Illinois, Michigan and Texas, and the announcement by CMS of the implementation of a new five year “Review Choice Demonstration Project” in three of those four states (Florida, Illinois, and Texas) as well as Ohio and North Carolina (with a possible extension to other states within the Palmetto/JM jurisdiction).

At the time of that article, CMS had announced that the project would begin in Illinois, with implementation in the other four states in the near future thereafter.  However, CMS had not specified a “start date” for Illinois because it was awaiting approval by the Office of Management and Budget (“OMB”) at that time.  CMS has now received that approval and has announced implementation in Illinois to begin on June 1, 2019.  All episodes of care beginning on or after that date during the period of the demonstration will be subject to the requirements of the project.

I.  Background of the Review Choice Demonstration Project:

As background, under the Review Choice Demonstration Project, home health agencies in the affected states will initially select from three options to have their claims reviewed:

  • Pre-claim review
  • Post-payment review, or
  • Minimal post-payment review with a 25% reduction.

After each six-month period, agencies with a 90% affirmation or approval rate under one of the first two options, above, will also be able to choose between two additional options.  Each of these options is described in our February 19 article.

II.  Illinois Home Health Agencies are Under the Microscope:

Home health agencies located in Illinois must choose and register for one of the three options, above, between the dates of April 17 and May 16 on a portal established by Palmetto GBA.  Any agency that fails to make a choice during that period will be assigned to the third option and will not be able to change that option during the entire five-year period, and thus will receive a 25% payment reduction during this entire time.

As discussed in our February 19 article, the Review Choice Demonstration is an outgrowth of the Pre-claim Review Demonstration for Home Health Services that had been initially implemented in Illinois and then “paused” and never “restarted.”  However, Illinois agencies that had met the 90% full provisional affirmation rate under that project (based on a minimal 10 request submission between August 2016 and March 2017) will be permitted to begin the Review Choice Demonstration by selecting from any of the options including the additional ones available to agencies with a 90% affirmation or approval rate during a 6-month period.

CMS has established links to both the Palmetto GBA portal described, above, and to an operational guide and Special Open Door Forum Presentation that describes the program at https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Choice-Demonstration/Review-Choice-Demonstration-for-Home-Health-Services.html.

III.  Is Your Home Health Agency Ready for an Audit?

Our earlier article goes into greater depth in describing the various options.  That article also emphasizes the critical nature of the choice that each agency makes in selecting an option.

Each of the options presents a separate set of risks and benefits as opposed to the others – the one exception being that the third option of a 25% payment denial does not appear to be a viable one for any agency.  Our earlier article also sets out several examples of these risks.  We thus recommend that every agency take the necessary time to consult with knowledgeable individuals, both internal and external, in making this selection during each 6-month period.

Additionally, as stated in that article, we cannot recommend strongly enough that agencies in the affected states have procedures in place to properly document coverage for all the cases that they handle, and also a process to prepare and move documentation through the system quickly and comprehensively.  They also should be updating their compliance and quality assurance programs to respond to these changes.

Liles Parker attorneys have substantial experience working with home health agencies in preparing them for the audit process which is similar to the processes that they will need to follow in responding to the Review Choice Demonstration Project, and in identifying the risks of choosing one option in relation to the others.  A number of our attorneys are also certified coders who have substantial experience in developing a format to justify coverage.  Finally, we have substantial experience working with agencies in developing and updating their compliance plans.

Healthcare LawyerAny person wishing a free consultation in the area should contact Michael Cook, the author and Co-chair of our Health Care Group. Michael can be reached at (202) 298-8750 or mcook@lilesparker.com

CMS has Ended its Moratorium on New Home Health Agencies in Texas, Illinois, Michigan and Florida. Unfortunately, the Lifting of the Moratorium Isn’t Necessarily a Good Thing for Existing Home Health Agencies.

February 19, 2019 by  
Filed under Home Health & Hospice

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Review Choice Demonstration Project(February 19, 2019):  CMS has now ended, at least for the current time, the moratorium that it placed on the approval of new home health agencies.  At the same time, home health providers that operate in Illinois, Ohio, North Carolina, Florida and Texas, and potentially other states within the Palmetto/JM jurisdiction (Alabama, Arkansas, Georgia, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, Oklahoma, South Carolina, and Tennessee) face the likelihood that a revised pre-payment demonstration model will be implemented in the near future.

I.  Lifting of the Moratorium:

Effective January 30, 2019, CMS has officially ended the “temporary” moratorium on new home health agencies, sub-units and branch locations (collectively referred to as “HHAs,” “home health agencies,” or “agencies”) in Illinois, Michigan, Texas and Florida.[1]  This means that there is no longer in effect a federal prohibition on enrolling new home health agencies in the Medicare program in these or any other states, and that agencies in these states that wish to enroll in Medicare can now begin the process of doing so.

II.  Background of the Home Health Agency Moratorium:

CMS initially imposed a temporary moratorium to prevent the enrollment of new home health agencies in Miami-Dade County, Florida and Cook County, Illinois and surrounding counties in 2013.  CMS then extended the existing moratoria and expanded them to cover Broward County, Florida, Dallas and Harris Counties, Texas, Wayne County, Michigan and surrounding counties.  Finally, in August 2016, CMS extended and expanded the moratoria on new HHA’s to Florida, Illinois, Michigan and Texas, and further extended those moratoria through January 2019.  CMS has justified the imposition of the moratoria and selection of the geographic areas based on its view that those areas were especially at high risk for fraud, waste, and abuse.  Finally, CMS lifted the moratorium on home health agencies in these states effective January 30.

III.  What is the Anticipated Impact of Lifting the Moratorium?

As noted, above, this means that providers that wish to enroll new home health agencies in Medicare in these states may now begin that process.  However, experience has demonstrated that CMS is not reticent to take these, and other, actions when the agency believes that there is a high risk of fraud and abuse in particular localities.  Additionally, federal law and regulations require states to impose temporary moratoria on enrollment in the Medicaid and CHIP programs except in certain circumstances in areas and over time periods where Medicare takes these actions.  Finally, this relief affects only CMS approval.  It does not eliminate the need to check and comply with any restrictions that state or local governments may place on the establishment of new agencies.  Thus, as always, we continue to recommend to all home health agency providers that they establish and maintain strong compliance programs to alleviate the perceived need of moratoria in the future, and also to minimize the likelihood that their agencies will be the subject of investigation or sanctions.

IV.  CMS’s Review Choice Demonstration Project:

CMS’s Review Choice Demonstration Project is an outgrowth of the what was called the Pre-Claim Review Demonstration Project.  In August 2016, CMS initiated the Pre-Claim Review Demonstration Project for Illinois home health agencies under which these agencies were required to submit all of their Medicare claims and documentation for a pre-claim review prior to submitting them for payment.  It was only after the claim was “affirmed” that the agency could submit it for payment.

Initially, according to CMS, there was a wide variation of affirmation rates among agencies.  However, according to CMS, by the end of the first six-month period, agencies had on the average much higher affirmation rates.  The demonstration project was paused in April 2017 and has not been re-instituted or expanded past Illinois.

In light of the various problems encountered when implementing the Pre-Claim Review Demonstration Project, CMS has chosen not to re-initiate the program.  Instead, CMS revised its approach and announced that a new initiative, the Review Choice Demonstration Project was being implemented.  Once it goes “live” in a state, the Review Choice Demonstration Project will be in effect for five years.  As noted above, the Review Choice Demonstration Project is scheduled to cover services provided in Illinois, Ohio, North Carolina, Florida, and Texas, with the option to expand it to other states under Palmetto’s jurisdiction.

The Review Choice Demonstration Project was initially scheduled to be implemented in December in Illinois, with a rollout in other states to follow with a 60-day advance notice. However, the Illinois rollout has been delayed awaiting approval under the Paperwork Reduction Act, after which the agency will announce the start date for the demonstration in Illinois.

Under the Review Choice Demonstration Project, agencies will have their choice of three options for the first six-month period: (1) 100% Pre-Claim Review; (2) 100% Post-Payment Review; or (3) Minimal review with an automatic 25% payment reduction.

V.  Initial Options Under the Review Choice Demonstration Project:

Under the Review Choice Demonstration Project, a home health agency will have the option of choosing among three alternatives with respect to how its claims will be handled.  These three alternatives include the following:

  • Option #1: 100% Pre-claim Review

Under the first option, a home health agency will submit the pre-claim with all relevant documentation.  If the pre-claim receives an affirmation notice, the agency can submit the claim and will receive full payment, and absent evidence of possible fraud or gaming, the claim will not be subject to post-payment review by the MAC, RAC or Supplemental Medical Review Contractor.  If a pre-claim receives a non-affirmative decision, it can be submitted again for pre-claim review with additional documentation or explanation. If a claim is submitted with a non-affirmative pre-claim decision, it will be denied with full appeal rights.   Claims submitted without receiving a pre-claim determination will be subject to prepayment review and even if determined to be payable, will be subject to a 25% reduction in payment rate.

After six months, the agency will have its affirmation rate calculated.  If it has submitted at least 10 claims and if it obtains at least a 90 % affirmation rate, the agency will be allowed to continue in this option or to choose between two other options, described, below.  If the agency’s affirmation rate for the six-month period was lower than 90% or it did not submit 10 claims during that period, it must choose between one of the three initial options.

  • Option #2: 100% Post-Payment Review

Under this option, the agency will be paid in the normal course, but will have all of its claims during a six-month period undergo complex medical review.  Subsequent to the review, the MAC will recover for any claims that it has paid during this period that it finds not to meet Medicare requirements, and the agency may appeal the decision through the normal appeals process.  If the agency has obtained at least a 90% approval rate during the six-month period, it will be able to choose either option one or one of the additional two options discussed, below.  Otherwise, it will have the option of choosing one of the initial three options for the next six-month period.

  • Option #3: Minimal Review with 25% Payment Reduction

An agency that chooses this option will have its claims reviewed under the normal process, but the payment amount will have an automatic 25% reduction.  Claims will not be subject to post-payment MAC reviews but will be subject to RAC and UPIC review under the normal review process, and any denied claims will be subject to the normal appeal process.  The 25% reduction in payment amount, however, is neither transferable to the beneficiary nor subject to appeal.  Any agency that chooses this option will not be able to change options for later periods and will remain under this option for the entire five-year “demonstration.”

VI.  Subsequent Options Under the Review Choice Demonstration Project:

An agency that has selected either Option 1 or 2, above and that has an affirmation rate of at least 90% in the prior six-month period may choose either Option 1, above – 100% Prepayment Review, or one of the two options, below – Options 4 (selective post-payment review) or 5 (spot check review).

  • Option #4: Selective Post-Payment Review

Under Option #4, the agency will be paid under normal claim processing procedures.  However, the MAC will select “a statistically valid random sample” every six months for complex review.  An agency selecting this option at any time will not be able to change options at a later point in time.

  • Option #5: Spot-Check Review

Under Option #5, the MAC will select 5% of claims to be subject to pre-payment review every six months.  The agency is able to remain in this option for the remainder of the demonstration provided that “the spot check shows that the agency is compliant with Medicare coverage rules and policy.”  If the agency fails to meet that standard, it will then be required to choose between the first three options for the next six-month period.

VII.   Recommendations:

For those agencies in one of the states selected for the demonstration, the selection of an option – whether initial or subsequent – will require some thought and analysis.  For example, Option 1 could well affect agency’s cash flow depending upon its ability to submit quickly the necessary documentation in a manner that clearly demonstrates coverage.  While CMS has suggested that the MAC will make every effort to review and make pre-claim determinations within 10 days of the first submission and within 20 days of subsequent submissions for the same claims, the continued ability of the MAC to meet these time frames will also have an impact upon cash flow.

In contrast, Option #2 will subject the agency to complex review of every claim that it submits and as those agencies that have been through the appeals process understand, the backlog of appeals has caused a substantial delay in resolution no matter how worthy the appeal on its merits.  Thus, unlike the pre-claim review process, the agency may not have the opportunity to correct its documentation and correct errors for a substantial period.

Option #3 guarantees a 25% payment reduction for all claims, while Option #4 will result in the selection of what the government may argue is a statistically valid random sample for purposes of any subsequent denials.

Under these circumstances, several things are clear.  Now more than ever, agencies in these states must have procedures in place to properly document coverage for all cases that they handle, and also a form and process to be able to support coverage and simplify the process for the MAC to come to that determination quickly and without the need for appeal or multiple submissions, depending upon the option chosen.

Liles Parker attorneys have substantial experience in working with agencies in the enrollment process for Medicare certification.  Additionally, a number of our attorneys are also certified coders and have substantial experience in developing a format to justify coverage of claims.

Michael Cook Healthcare AttorneyAny person wishing a free consultation in either area should contact the author and Co-chair of our Health Care Group, Michael Cook.  Michael can be reached at (202) 298-8750 or mcook@lilesparker.com.

 

 

 

[1] https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/ProviderEnrollmentMoratorium.html

Texas Prosecutors are Aggressively Targeting Criminal Home Health Fraud

January 9, 2019 by  
Filed under Home Health & Hospice

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Texas prosecutors are aggressively pursuing criminal home health cases(January 9, 2019):  Despite real progress being made with respect to regulatory compliance, home health agencies, their owners, and affiliated health care professionals (such as referring / supervising physicians, therapists and staff) remain under strict government scrutiny. The government’s efforts to investigate and prosecute home health fraud cases have been especially evident in Texas.  In calendar year 2018, a number of home health agencies, owners and affiliated individuals have been indicted, prosecuted and / or sentenced in connection with their improper conduct.  This article examines many of these recent cases and discusses the improper conduct that led to these Texas home health prosecutions.

I. Texas Home Health Prosecutions in Calendar Year 2018:

Several significant home health fraud cases were investigated and prosecuted by the Department of Justice (DOJ) in Texas during 2018. These cases included, but were not limited to the following:

  • Southern District of Texas. December 2018.  In this case, the owner of a home health agency allegedly paid marketers and group home owners for Medicare beneficiary information which he used to bill Medicare and Medicaid for home health services that were either not provided or did not qualify for coverage and payment.  The government also alleged that the defendant owner personally falsified home health patient assessment forms to make the beneficiaries appear sicker on paper to receive higher reimbursement rates from Medicare,”and that he instructed agency employees to falsify home health certifications and forge physician signatures. A jury found the defendant guilty and he was sentenced to 109 months in prison. The defendant was also ordered to pay $3.5 million in restitution to the Medicare program.
  • Northern District of Texas. October 2018. Two owners and the administrator of a home health agency were convicted in this prosecution of various health care fraud violations after a six-day trial. The owners were convicted of conspiracy to commit health care fraud, and one of the owners and the administrator were convicted of two counts of making a false statement in connection with a health care benefit program. At trial, evidence was presented that both of the home health agency owners had previously been excluded from participating in federal health benefit programs. The government alleged that the administrator concealed the fact that the home health agency owners were excluded parties. The government further alleged that the administrator signed false documents indicating that a third person was the owner of the agency and that no one associated with the home health agency had been excluded from participating in federal health benefits programs such as Medicare and Medicaid.  Federal prosecutors were also able to show that the home health agency had billed the Medicare and Medicaid programs more than $3.7 million to which it was not entitled because the agency was owned by excluded parties. The defendants have not been sentenced as of the date of this publication.
  • Northern District of Texas. October 2018.  In this case, a licensed vocational nurse who was also the part-owner of a home health agency was sentenced to 120 months in prison for her role in the fraudulent submission of home health claims to Medicare for payment. The former part-owner and supervising physician at a physician house call company was also sentenced to 42 months in prison for his role in the fraud. Two additional home health agency employees were also convicted for their roles in the fraud. At trial,the government produced evidence that the supervising physician certified the medical necessity of home health services for a number of patients who had never been seen,and that the physician billed Medicare for over $1.6 millionin medically unnecessary home health certifications and physician home visits.
  • Southern District of Texas. October 2018. A patient recruiter was sentenced to 108 months in prison today for her role in a $3.6 million home health Medicare fraud scheme in this health care fraud case. At trial, the government submitted evidence to prove that the defendant patient recruiter sold personal patient information to a home health agency which it then used to bill the Medicare and Medicaid program for services that were either not medically need or were never even providedNotably, the patient recruiter paid Medicare beneficiaries, doctors, physical therapy companies and others for the paperwork and Medicare beneficiary information and services needed to facilitate the fraud.  Finally, to hide the fraud, the patient recruiter tried to make it look like she was paid an hourly wage and the marketing services she was providing were legal and proper.
  • Southern District of Texas. June 2018.  The part-owner of a home health agency, who also served as the agency’s Director of Nursing, was indicted in this prosecution for conspiracy to commit health care fraud.  The government has alleged that the defendant, along with an unnamed group of co-conspirators, paid physicians to falsely certify the medical necessity of home health services for Medicare beneficiaries.  The defendant and the unnamed group of conspirators are also charged with paying patient recruiters for referring Medicare patients to the home health agency.  The government has also filed a criminal forfeiture count in the indictment in which it claims that more than $16 million is subject to forfeiture.
  • Southern District of Texas. June 2018.  The owner of a Harris County home health agency was indicted by a Federal Grand Jury for Conspiracy to Defraud the United States, paying and Receiving Health Care Kickbacks, and substantive violations of the Federal Anti-Kickback Statute. Specifically, the government has alleged that the defendant owner and a number of co-conspirators paid kickbacks to several patient recruiters in exchange for referring Medicare beneficiaries to the owner’s home health agency. The government also alleges that the defendant owner and his co-conspirators paid kickbacks to a number of physicians in exchange for their certification of Medicare-required paperwork, and that they paid Medicare patients for their Medicare information in order to bill the Medicare program for home health services.  The case is set for trial in 2019, and the government also has included a criminal forfeiture count in the indictment, seeking the forfeiture of at least $1.2 million
  • Eastern District of Texas. June 2018.  In this case, the owner of a Missouri City, Texas home health agency, was indicted for conspiracy to violate the Federal Anti-Kickback Statute and f or violations of the Aiding and Abetting statutory requirements. The defendant and a co-conspirator patient recruiter are alleged to have paid cash amounts ranging from approximately $1,600 to $2,900 to Medicare beneficiaries to sign up for home health services with the defendant’s home health agency. The matter is set for trial later this year.
  • Southern District of Texas. May 2018. After a three-day trial, a Federal jury found a patient recruiter for a Texas home health agency guilty for her role in a $3.6 million Medicare fraud case. The patient recruiter was found guilty of one count of conspiracy to commit health care, five counts of health care fraud, and one count of conspiracy to pay health care kickbacks.  At trial, evidence was introduced that showed that the defendant and her co-conspirators submitted claims to Medicare for home health services that were not medically necessary and, in some case, were not provided. According to the government, the patient recruiter paid beneficiaries, doctors, physical therapy companies, and others for the paperwork, Medicare beneficiary information, and services needed to facilitate the fraud.”
  • Southern District of Texas. January 2018.  In this final case, a Texas mayor (a licensed physician and Medical Director) and three owners of a number of home health and hospice providers services, were indicted for their roles in an alleged $150 million health care fraud and money laundering scheme. The government has alleged that the owners caused kickbacks and bribes to be paid to the defendant physician (and other physicians) who served as Medicare Directors for their home health agency in exchange for falsely certifying that Medicare patients qualified for services. The defendant owners are alleged to have fraudulently kept patients on hospice services for years when such care was not medically appropriate.  A number of the defendants are also alleged to have made a false statement to the FBI and / or obstructed justice by producing false and fictitious records to a Federal Grand Jury.

II. What Lessons Can be Learned from these Home Health Prosecutions?

At the outset, it is important to note that none of the home health fraud prosecutions discussed above were based on differing professional assessments of the Medicare beneficiaries’ clinical condition or on a battle between medical experts over the medical necessity of home health services.  Instead, Texas prosecutors focused on illegal payments in the form of kickbacks and bribes by home health owners and operators in exchange for the referral of Medicare patients, falsification of certifications or statements, and/or for acquisition of beneficiary information. In other words, the Federal criminal cases being brought against home health owners, operators and affiliated physicians were based on the parties’ fraudulent conduct, not on the quality of care provided or the medical necessity of the home health services. Several fundamental lessons to be learned based on these cases include:

Lesson #1:  Sooner or later, improper Medicare claims practices and criminal wrongdoing WILL be identified by law enforcement or one of the contractors working for the Centers for Medicare and Medicaid Services (CMS). 

Since first passing the Medicare and Medicaid programs in 1965, the government has been compiling utilization, coding, and billing data related to the services billed to Federal and State health benefit programs.  CMS shares access to this information with a number of private claims processing and / or program integrity contractors.[1]  These entities are required (as part of their contractual obligations to CMS), to conduct data mining analyses of provider and supplier coding, billing and utilization practices.  While criminal conduct may escape discovery in the short run, it is essential for home health agencies, their owners, patient recruiters and affiliated physicians to recognize that there is a strong likelihood that the government will ultimately find out about the wrongdoing.

Lesson #2: Don’t pay kickbacks. . . ever. You will eventually be caught.

The Anti-Kickback Statute became a felony in 1977.[2]  Under the Anti-Kickback Statute, it is a criminal violation to offer, pay, solicit or receive anything of value to induce referrals or generate referrals reimbursed by Federal health care programs.[3]The Department of Health and Humans Services, Office of Inspector General (OIG) first publicized the agency’s concerns regarding home health related kickbacks in a “1995 Special Fraud Alert.”[4]  At that time, the OIG identified the following business practices as improper and potential violations of the Anti-Kickback Statute:

“Payment of a fee to a physician for each plan of care certified by the physician on behalf of the home health agency. 

Disguising referral fees as salaries by paying referring physicians for services not rendered, or in excess of fair market value for services rendered.

Offering free services to beneficiaries, including transportation and meals, if they agree to switch home health providers.

Providing hospitals with discharge planners, home care coordinators, or home care liaisons in order to induce referrals.Providing free services, such as 24-hour nursing coverage to retirement homes or adult congregate living facilities in return for home health referrals.

Subcontracting with retirement homes or adult congregate living facilities for the provision of home health services to induce the facility to make referrals to the agency.”  

Most of the Texas home health prosecutions pursued by DOJ prosecutors in 2018 involved illegal kickback conduct that the government first identified its 1995 Special Fraud Alert.  Despite the fact that more than twenty years have elapsed, a number of home health agency owners, operators, marketing personnel and referring physicians have continued to engage in illegal kickback activities.

Lesson #3: Don’t play games. Efforts to deceive the government or obstruct an investigation will only compound your problems.

In the criminal cases outlined in Section II above, a number of the defendants engaged in deceitful conduct. Several examples of the deceitful conduct included:

“A home health agency owner was alleged to have falsified home health patient assessment forms. 

A home health agency owner was alleged to have instructed home health staff to falsify physician signatures.   

A home health agency administrator was alleged to have signed false documents indicating that a third-party owned the agency and that no excluded parties were associated with the agency, when in fact, the true owners had been excluded from participation in the Medicare program.  

Defendants were also alleged to have made a false statement to the FBI and / or obstructed justice by producing false and fictitious records to a Federal Grand Jury.”

There are several Federal statutes that are implicated by this type of deceitful conduct.[5]  Statutory provisions that may be implicated (depending on the facts), include, but are not limited to:

Fraud and False Statements (18 U.S.C. § 1001). It is illegal for any person, in connection with any matter before any branch of the federal government or any federal agency, to do any of the following: (1) falsify or conceal a material fact; (2) make any material misrepresentations; or (3) make or use any false document knowing that such document contains a material falsehood. 

False Statements Involving Health Care Programs (18 U.S.C. § 1035).  It is unlawful for any person to, in any matter involving a health care benefit program and in connection with the delivery of or payment for health care services, knowingly: (1) falsify or conceal a material fact; (2) make a material misrepresentation; or (3) use a document knowing that it contains a material misrepresentation.

Health Care Fraud (18 U.S.C. § 1347).  It is unlawful for any person to knowingly: (1) defraud any health care benefit program; or (2) obtain by false pretenses any money or property owned or under the control of a health care benefit program. 

Obstruction of a Criminal Investigation into Health Care Offenses (18 U.S.C. § 1518).  It is unlawful to prevent, obstruct, or delay the communication of information relating to a federal health care offense to a criminal investigator. 

False Statements Involving Federal Health Care Programs (42 U.S.C. § 1320a–7b(a)). It is unlawful for any person to: (1) knowingly make a false statement in an application for benefits or payment under a federal health care program; (2) knowingly make a false statement for use in determining rights to benefits or payment under a federal health care program; (3) knowingly conceals or fails to disclose any event affecting one’s eligibility for benefits or payment under a federal health care program; (4) knowingly use the benefits or payment of another under a federal health care program for some reason other than their intended purpose; (5) knowingly present a claim for a physician’s service under a federal health care program where the person presenting the claim knows the service provider was not a licensed physician; or (6) knowingly assist another in disposing or transferring of assets such that he or she will be eligible for benefits under a federal health care program. 

Violations of these statutes are often uncovered during the course of administrative audits by CMS program integrity contractors. These types of violations may also arise in connection with patient complaints and whistleblower cases.

Lesson #4:  Medical Director agreements — it all comes down to the nature of the business relationship. 

Both parties need to recognize the importance of conducting due diligence before entering into a contract with a Medical Director.  Does the home health agency have an effective Compliance Program in place? Has either the home health agency or the physician being considered for a Medical Director position been the subject of an adverse action by Medicare, Medicaid, or a private payor?  To paraphrase the Greek philosopher Aesop, “You are judged by the company that you keep.”

When reviewing Medical Director agreements, government prosecutors and investigators are trained to conduct a critical assessment of these business relationships.  Are the terms of the Medical Director agreement consistent with Fair Market Value principles?  Has the Medical Director properly documented the services he or she provided and properly recorded the amount of time being spent in the performance of his or her Medical Director duties?  How many patient referrals are generated by your Medical Directors?  In a perfect world, a home health agency would not receive any patient referrals from the agency’s Medical Director.  To the extent that an agency’s Medical Director does, in fact, make a significant number of referrals to the agency for home health services, the government will understandably wonder whether the referrals being made are in exchange, in whole or in part, for the monies being paid to the physician under the Medical Director agreement.

Lesson #5:  Do you employ sales or marketing personnel? Regardless of whether you refer to a position as a Community Outreach Coordinator, a Marketing Specialist or a Physician Liaison, the government will still carefully review how these individuals are compensated, and the actual duties that are being performed.    

Marketing activities that may constitute ordinary business courtesies if extended to an actual or potential referral source in another industry, are often illegal in the context of Federal health care programs. Home health agencies that employ or contract with individuals to conduct marketing services on behalf of the agency need to ensure that the services being performed do not violate the Federal Anti-Kickback Statute or, if applicable, a state’s bribery law or all-payor statute.  Compensation agreements that reward a marketing individual based on the number of patient referrals generated are especially problematic.

III.  Conclusion:

The likelihood that your home health agency will be subjected to a Medicare or Medicaid audit or investigation increases every day.  As a participating provider in one or more Federal health care programs, providers have an affirmative obligation to ensure that your claims are properly documented, coded, and billed.  Additionally, providers must ensure that otherwise payable home health service claims have not been “tainted” by any statutory or regulatory violation of the Stark laws, the Federal Anti-Kickback Statute or the False Claims Act. When examining whether a claim is “payable,” a provider needs to remember that even though the medical service at issue may have been medically necessary and qualified for payment, if it is the result of an illegal activity, it will be tainted and will likely not qualify for payment. Unfortunately, many providers have never researched or reviewed the proper rules covering the work they provide.  If you have questions?  Give us a call.  Liles Parker attorneys have extensive experience representing home health providers around the country in connection with Medicare audits and investigations.

Robert Liles Healthcare LawyerRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at the health law firm Liles Parker, PLLC.  Liles Parker attorneys represent home health and hospice agencies around the country in connection with Medicare and Medicaid audits and investigations of home health and hospice services.  Has your agency received an administrative request or a subpoena for records?  Give us a call.  We can help. For a free consultation, please call: 1 (800) 475-1906.

[1] CMS works with claims processing contractors (Medicare Administrative Contractors (MACs)), and program integrity contractors (such as Recovery Audit Contractors (RACs), Supplemental Medical Review Contractors (SMRCs) and Uniform Program Integrity Contractors (UPICs) to identify overpayments and instances of potential fraud which may be referred to law enforcement authorities for investigation and prosecution.

[2] 42 U.S.C. 1320a-7b(b). The Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977 (Public Law 95-142), made violations of the Anti-Kickback Statute a felony. It also made those who offered remuneration for referrals and those who received them subject to various penalties.

[3] Under 42 U.S.C. 1320a-7b(f),a “Federal health care program” is defined as:

“(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under chapter 89 of title 5); or

(2) any State health care program, as defined in section 1320a-7(h) of this title.”

[4] Federal Register, August 10, 1996 (Volume 60, Number 154). A copy of this Special Fraud Alert can also be found on OIG’s website.

[5] For each of the criminal statutes identified below, there are corresponding regulations which would authorize the imposition of Civil Money Penalties by the Health and Human Services, Office of Inspector General (HHS/OIG), see, 42 U.S.C. 1320a-7a(a).

Home Health Providers Under the Microscope — The Review Choice Demonstration Project is Here

October 4, 2018 by  
Filed under Home Health & Hospice

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The Review Choice Demonstration Project (October 4, 2018):  Last week, the Centers for Medicare & Medicaid Services (CMS), confirmed that it intends to initiate the Review Choice Demonstration for Home Health Services project on December 10, 2018.  The Review Choice Demonstration project is slated to initially begin in Illinois. This initiative is the renamed, repackaged version of the prior Pre-Claim Review Demonstration project that was initiated, then placed on hold (due in large part to provider protests), in April 2017.  This article provides an overview of the long and sorted history leading up to the Review Choice Demonstration project.

I. Although Dropping, the Improper Payment Rates for Home Health Services Remain Excessive:

The last few years have been rough on home health providers.  As the government has been quick to note, one of the primary components of the Medicare Fee-for-Service (FFS) improper payment rate has consistently been the excessive level of improper payments made for home health services.  Broken down by fiscal year, the improper payment rates for home health services have included:

Fiscal Year

Report Period

Home Health Improper Payment Rate

FY 2014

July 1, 2012 – June 30, 2013

51.4%

FY 2015

July 1, 2013 – June 30, 2014

59%

FY 2016

July 1, 2014 – June 30, 2015

42%

FY 2017

July 1, 2015 – June 30, 2016

32.3%


Although the improper payment rate for home health services has dropped considerably from FY 2015 to FY 2017, it still constitutes a major portion of the overall Medicare FFS improper payment rate.  During the FY 2017 report period, it is estimated that more than $6.1 billion in improper payments was made by Medicare for home health services.  When reviewing the improperly paid claim lines associated with FY 2017, the Comprehensive Error Rate Testing (CERT) contractor tasked with this project found that more than 89% of the errors were due to documentation deficiencies. 

II. Overview of Corrective Actions and Initiatives Taken by CMS to Address Home Health Documentation Deficiencies:

The FY 2017 CERT contractor findings with respect to documentation have merely further strengthened the government’s long-standing belief that home health providers (and referring physicians), need ongoing education and guidance with respect to the medical necessity, documentation, coverage and payment requirements that must be met.  Over the last few years, CMS and its contractors have implemented a variety of corrective actions intended to address documentation and medical necessity deficiencies that have been identified in connection with Medicare home health claims. Examples of these actions have included Probe and Educate Reviews[1], the initiation of the Pre-Claim Review Project[2], the development of Home Health Plan of Care / Certification and Progress Note Clinical Templates[3], and the establishment of a Home Health Recovery Audit Contractor[4].  CMS also revised the Physician Face-to-Face Narrative Requirement[5] for home health services. Several of these corrective initiatives are discussed in more detail below:

A. Probe and Educate Reviews.

In late 2015, home health Medicare Administrative Contractors (MACs) began pulling five claims sample from each home health agency in their jurisdiction for prepayment review purposes.  The claims subject to review covered episodes of service beginning on or after August 1, 2015.  The purpose of the Probe and Educate Review initiative was to better ensure that home health agencies were fully complying with applicable medical necessity, documentation, certification, coverage and payment requirements.[6] Systemic problems identified by home health MACs through the Probe and Education Review process has included:

  1. Failure to comply with face-to-face requirements. For example, in some cases, the certifying physician signature was missing. In other cases, the encounter notes did not document the elements required to show that the patient was eligible for home health services.
  2. Failure to identify an estimate of time for continued need when recertifying the medical necessity of services.
  3. Failure to fully complete and / or properly complete the initial certification documentation required.
  4. Bailure to timely respond to an Additional Documentation Request (ADR) request from a Medicare contractor in a timely fashion.

B. Pre-Claim Review Demonstration Project.

Section 402(a)(1)(J) of the Social Security Amendments of 1967 authorizes the Secretary, HHS, to:

‘‘develop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established by the Social Security Act (the Act).’’

Using this authority, and inn consideration of the excessively high home improper payment rate for home health services, in June 2016, CMS announced[7] the initiation of a new Pre-claim Review Demonstration project. Theoretically, the demonstration project was not intended to create any new clinical home health documentation requirements. Home health agencies covered by the demonstration project would be required to submit supportive medical documentation to the CMS contractor for review prior to being paid. This approach was intended to help educate providers and better ensure that home health claims qualified for coverage and payment. The demonstration project was also intended to test whether the use of a pre-claim review process would improve the government’s ability to identify, investigate, and prosecute home health fraud. Originally, the demonstration project was scheduled to be put into place in five states. CMS and its contractors planned on rolling out the project over a six-month period: 

  • Illinois: August 1, 2016
  • Florida: October 1, 2016
  • Texas: December 1, 2016
  • Michigan and Massachusetts: January 1, 2017

Two months later, CMS took its first steps towards putting the planned three-year project into place by implementing it in Illinois.  To characterize the implementation as “problematic” would be generous.  From its very start, Illinois home health providers, both large and small, experienced significant problems meeting the reviewer’s documentation requirements, thereby resulting in significant provider payment delays. Bending under political pressure, the planned roll-out in Florida was placed on hold. This effectively delayed implementation in the remaining three states as well.  After several false starts, the initiative was ultimately placed on hold in March 2017.  For a more detailed discussion of the Pre-Claim Demonstration project, please see the following article.  Additional information may also be found here.

C. Home Health Plan of Care / Certification and Progress Note Clinical Templates:

As required under 42 CFR 484.60, Condition of participation: Care planning, coordination of services, and quality of care, Medicare patients are accepted for treatment on the reasonable expectation that a home health agency can meet the patient’s medical, nursing, rehabilitative, and social needs in his or her place of residence. In order to accomplish this:

“Each patient must receive an individualized written plan of care, including any revisions or additions. The individualized plan of care must specify the care and services necessary to meet the patient-specific needs as identified in the comprehensive assessment, including identification of the responsible discipline(s), and the measurable outcomes that the HHA anticipates will occur as a result of implementing and coordinating the plan of care. The individualized plan of care must also specify the patient and caregiver education and training. Services must be furnished in accordance with accepted standards of practice.”

Similarly, 42 CFR 424.22, Requirements for home health services, mandates that a physician certify and recertify a patient’s eligibility for home health services in order to qualify for coverage and payment by Medicare.  Additional certification and recertification requirements are set out under the regulations.

Finally, CMS develop a template Progress Note that could be used by a physician and, when permitted under state law, by a physician assistant, a nurse practitioner, a clinical nurse specialist  and / or a certified nurse midwife to document that home health services are medically necessary and appropriate and to confirm that a Medicare patient is, in fact, homebound.

III. Rise of the Review Choice Demonstration Project:

In consideration of the various challenges encountered when trying to roll-out the Pre-Claim Review Demonstration project, CMS ultimately placed the initiative on hold in April 2017.  It is important to keep in mind that the underlying problem that gave rise to the Pre-Claim Review Demonstration project – an excessively high improper payment rate associated with home health services – was still (and continues to be) a serious program integrity concern. Additionally, it was abundantly apparent that wholesale changes would need to be made if the initiative were to be reintroduced. 

Over the next year, CMS completely reworked its prior initiative in an effort to provide additional flexibility for home health agencies that may be covered by an updated version of the project.   As reflected in the Federal Register, the “new and improved” initiative was named the Review Choice Demonstration project. As with its earlier iteration, the revised version of the demonstration project is intended to:

“help assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud. The demonstration would help make sure that payments for home health services are appropriate through either pre-claim or postpayment review, thereby working towards the prevention and identification of potential fraud, waste, and abuse; the protection of Medicare Trust Funds from improper payments; and the reduction of Medicare appeals.”

CMS has again proposed that the demonstration project will be implemented in five states. Much to the dismay of Illinois, Florida and Texas home health providers, they are STILL on the list of targeted states.  Michigan and Massachusetts are no longer slated to be part of the demonstration.  In their place, CMS has substituted Ohio and North Carolina.  CMS has stated that the new list of five states are:

“known areas of fraudulent behavior and had either a high home health improper payment rate or a high denial rate during the home health Probe and Educate reviews.”

Notably, CMS has indicated that there is the possibility that the Review Choice Demonstration project may later be expanded to other states in the Palmetto / JM jurisdiction.

As set out in the September 28th Federal Register notice, CMS intended to implement the Review Choice Demonstration project in Illinois on December 10, 2018. 

A. The Review Choice Demonstration Project is Intended to Offer Flexibility to Home Health Providers.

CMS has designed the Review Choice Demonstration project so that home health agencies in affected states have several ways that they may show their “compliance with CMS’ home health policies.”  Options available to home health providers include[8]:

The Review Choice Demonstration Project

 

Robert Liles Healthcare AttorneyRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations.  Are your transcranial magnetic stimulation claims being audited?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

 

[1] https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Home_Health_Medical_Review_Update.html

[2] https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Pre-Claim-Review-Initiatives/Overview.html

[3] https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Electronic-Clinical-Templates/Downloads/Home-Health-Services-Plan-of-Care-Certification-Template-Draft-20180709-R20.pdf

[4] https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/recovery-audit-program/

[5] https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Electronic-Clinical-Templates/Downloads/Home-Health-Services-F2F-Encounter-Template-Draft-20180709-R20.pdf

https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Electronic-Clinical-Templates/Downloads/Home-Health-Services-F2F-Encounter-Template-Draft-20180214-R10d.pdf

[6] Additional information regarding the Probe and Educate process is outlined in MLN Matters, MLN Matters ® Number:SE1524.

[7] 81 Fed. Reg. 37598.  June 8, 2016.

[8] 83 Fed. Reg. 48818September 27, 2018.

Personal Care Services Are Under the Government’s Microscope

January 22, 2018 by  
Filed under Home Health & Hospice

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personal care services (January 22, 2018): The Department of Health and Human Services, Office of Inspector General (HHS-OIG) has conducted numerous audits, evaluations, and investigations involving the provision of “ personal care services ” to Medicaid beneficiaries.  In fact, from 2006 to 2012, HHS-OIG produced more than 20 audit and evaluation reports analyzing various program integrity risks presented when providing personal care services.  Much of this work was summarized in a November 2012 report entitled “Personal Care Services: Trends, Vulnerabilities, and Recommendations for Improvement.” [1] Additionally, last month, HHS-OIG published an Issue Brief highlighting the involvement of State Medicaid Fraud Control Units (MFCUs) in pursuing health care fraud and beneficiary abuse in personal care services programs.

In this article, we have taken the summary information assembled by HHS-OIG in the reports outlined above and combined this information with data collected from the 50 state MFCUs in order to provide an overview of state and federal investigations, indictments, convictions, and recoveries involving fraud, waste, abuse and patient neglect in Medicaid personal care services programs around the country.  Before examining this information, let’s go over a few basics.

I. What Are “Personal Care Services”?

The coverage and scope of a state’s specific personal care services benefit varies from one state’s Medicaid program to another.  Using Texas as an example, prior to 2006, personal care services under Medicaid were only provided to qualified minors with physical disabilities and other medical needs.  Notably, children with cognitive or behavioral disabilities did not qualify for this benefit.  As a result of a class action lawsuit settlement,[2] the Texas Medicaid State plan was amended to cover personal care services for children with disabilities and chronic health conditions enrolled in the state’s Medicaid program. Today, the Texas Department of State Health Services describes “personal care services” as:

“A Medicaid benefit that assists eligible clients who require assistance with activities of daily living (ADLs) and instrumental activities of daily living (IADLs) because of a physical, cognitive or behavioral limitation related to their disability, physical or mental illness, or chronic condition.”[3]

Examples of ADLs that are often provided under the personal care services benefit include bathing, eating, toileting, positioning and transferring, dressing and walking. IADLS provided under the benefit typically include doing laundry, performing light housework, shopping for groceries and preparing meals.  As these tasks and activities reflect, personal care services are non-skilled in nature.  Skilled services provided by nursing personnel do not qualify as personal care services, though they may qualify under some other benefit such as home health.

It is also important to remember that neither ADLs nor IADLs would qualify as covered personal care services if a beneficiary has the physical, behavioral and cognitive ability to perform these tasks and activities without adult supervision.

II. Who Qualifies for Medicaid-Covered Personal Care Services?

Like the service itself, whether a person qualifies for personal care services depends on the specific requirements of each state program. However, using Texas as an example, a beneficiary must:

  • Be 20 years or younger and be eligible for Medicaid.
  • Have a disability, physical or mental illness, or a health problem that lasts for a long time.
  • Have a Practitioner Statement of Need signed by a practitioner (physician, advanced practice nurse, or physician assistant) who has examined you in the last 12 months.
  • Need help with ADLs and IADLs based on the Personal Care Assessment Form (PCAF).
  • Provide a reason why your guardian cannot help you with ADLs and IADLs.[4]

III. Trends in Medicaid Personal Care Service and MFCUs: 

Between 2012 and 2015, Medicaid spending on personal care services jumped from $10.9 billion to $13.3 billion.[5] As a result, MFCUs have increasingly been tasked with investigating and prosecuting Medicaid provider fraud and patient abuse and neglect within healthcare facilities. Despite being only one of 80 types of providers regulated by MFCUs, personal care service providers constituted 38% of their indictments and 34% of their convictions. During this period indictments and convictions related to fraud by personal care service providers increased 56% and 33% respectively. In the year 2015, cases of fraud by personal care service providers constituted 12% of all MFCU investigations. Overall these trends indicate that MFCUs are concerned with the vulnerability of Medicaid beneficiaries and are more aggressively targeting personal care service providers.

IV. Current Systemic Weaknesses Facilitate Fraud, Abuse, and Neglect:

Throughout last month’s report, HHS-OIG highlighted many of the weaknesses of the current model of Medicaid personal care service oversight. Presently, there are no federal training or educational requirements for personal care service attendants so the quality of personal care services provided from one caregiver to another can vary greatly.  Additionally, thorough background checks are not consistently required.  As a result, there have been a number of instances where habitual offenders have been found to have exploited beneficiaries under their care.

Another issue of concern is that thorough documentation is not required for Medicaid personal care services, leading to the ability of an attendant to charge for services that did not occur or for time in which the attendant and beneficiary where not even in the same location. Aside from creating a window of opportunity for fraud, this also allows for personal care service attendants to neglect their beneficiaries. In the past, this scenario has led to the death of a beneficiary.  Lack of oversight also shifts the burden to report on to the beneficiary. Thus, mental and physical handicaps of beneficiaries leave them vulnerable as reporting may be rather difficult. Due to federal regulations, MFCUs are also unable to investigate or prosecute cases of abuse or neglect by in-home/community personal care service providers.

As a consequence of these systemic issues, despite being the best equipped agency to take on this task, MCFUs do not receive funding for this and are forced to refer such cases to other agencies that may be less effective in investigating and prosecuting these cases. Overall, the current model is vulnerable to fraud and leaves beneficiaries vulnerable to abuse and neglect.

V. Improper Payments to Personal Care Service Providers Will Lead to Investigations:

An improper payment is any payment that is made that, according to federal and/or state laws, should not have been made. The inconsistency in state rules and the lack of depth of federal rules complicates the generalization of improper payments. According to an audit of state Medicaid programs by HHS-OIG, the most common types of improper personal care service payments are:

  • Claims paid without supporting documentation.
  • Services provided and billed that are ineligible for Medicaid reimbursement.
  • Services provided without required supervision.
  • Services provided by an unqualified attendant.
  • Services provided by an attendant without proper verification of required qualifications.
  • Payments made for care while the Medicaid beneficiary was in an institution.

It is important to note that improper payment is not the same as fraud. Improper payments are considered a result of error and a personal care service provider is required to return the overpayment as soon as the improper payment is discovered and may face further consequences. While self-disclosure of improper payments is considered an act of good faith, the nature of the improper payment may lead into an investigation into potential waste, fraud, and/or abuse.[6]

VI. What is Personal Care Services Fraud?

The vulnerability of the current personal care services system to fraud has made these services a significant concern for MCFUs around the country. Many of the fraud cases brought in recent years have involved instances of billing for services not rendered to a Medicaid beneficiary.  Examples of this type of improper conduct has included instances when:

  • A Medicaid beneficiary was on a vacation.
  • A Medicaid beneficiary was in an institution.
  • A Medicaid beneficiary was documented to be without the personal care attendant by another healthcare provider.
  • The personal care aide or attendant was documented to be working elsewhere at the time.
  • The Medicaid beneficiary was deceased at the time personal care services were billed.

Often, wrongdoers have committed this type of fraud by having a Medicaid beneficiary sign off on blank time sheets in advance of services that are to be provided. While the Medicaid beneficiary is typically unaware of the fraudulent intentions of the personal care attendant, there have been cases where the personal care services attendant has made an agreement to share profits with the beneficiary or a family member of the beneficiary in order to obtain a signed blank time sheet.

While fraud is often committed by individual personal care aides or attendants, a personal care services agency can be held accountable if it is aware of the attendant’s fraudulent billing practices. One investigation in Alaska led to the criminal prosecution of over 40 individuals for fraud.[7] In that case, the personal care services agency was aware that employees were submitting falsified timesheets in addition to charging Medicaid for services rendered by excluded individuals.

VII. Personal Care Services Fraud Investigations:

Personal care services fraud has been an increasing concern of MCFUs. As expected, the amount of criminal investigation into personal care services fraud has risen over the 2015 and 2016 fiscal years, with a total of 1,929 individual personal care services attendants and 250 personal care services agencies being investigated for fraud at the end of 2016.[8] Convictions have risen slightly over those 2 years, with 464 individual personal care aides and attendants and 36 personal care services agencies convicted of criminal fraud charges in 2016. Overall, personal care service fraud appears to more commonly perpetrated by individual personal care service attendants, though agencies are certainly being held responsible for their role in personal care services fraud.

personal care services fraud

Table 1: The number of open investigations into personal care services fraud by agencies and attendants at the close of the 2015 and 2016 fiscal years.

personal care services fraud

Table 2: The number of criminal convictions and civil court settlements/judgements for personal care services fraud in the 2015 and 2016 fiscal years.

VIII. Recoveries from PCS Fraud Cases:

Despite an increase in civil settlements and judgements, the total amount recovered through settlements decreased substantially for both PCS attendants and PCS agencies. The result of criminal convictions has been markedly different. In the fiscal year 2016, a total of 464 PCS attendants were convicted of PCS fraud compared to only 36 agencies.[11] While personal care attendants constitute the overwhelming majority of convictions, approximately 45.8% of the amount recovered in 2016 came from personal care service Agencies. From fiscal year 2015 to 2015, the amount of PCS agencies convicted increased by 63.6%, from 22 to 36. In the same period, the amount recovered from criminal convictions of PCS agencies more than doubled, from $1,718,223 to $4,108,575. Thus, it is evident that PCS agencies are increasingly being held responsible for their role in PCS fraud.

personal care services fraud

Table 3: The amount of money recovered in personal care services fraud cases in the 2015 and 2016 fiscal years.

 IX. What is Abuse or Neglect of a Beneficiary?

The current system leaves beneficiaries vulnerable to abuse. Abuse has cases revolve around incidents in which a personal care services attendant causes physical harm to the beneficiary. In a case in Florida, a personal care attendant was fired and later charged with elderly abuse after repeatedly striking, pinching, and pulling at an elderly individual and leaving bruises on the individual.[13] However, abuse is not always physical. Abuse also includes harm done by theft, in which personal care service attendants take advantage of their beneficiaries and steal valuable items from them. In one case, a personal care service attendant at an assisted living facility stole nearly $10,000 from beneficiaries.[14] In another, an attendant stole two guitars from a beneficiary and sold the guitars to a local music shop.[15] When the attendant became aware of the beneficiary’s intent to contact authorities, the attendant returned the items. In the end, the attendant was still charged with fourth degree larceny.

Drug diversion is a serious abuse prevalent in personal care service that goes beyond theft and extends into physical harm as well. In addition to the monetary loss, the beneficiary is losing the treatment they require. For many, especially in hospice care, the use of opioids is used to manage pain. When attendants take these medications, they leave the beneficiaries suffering. In one case, an attendant began to switch a beneficiary’s hydrocodone with acetaminophen, leaving the patient suffering until the attendant’s drug diversion was discovered. In addition to leaving patients suffering, the use of substitute substances and potentially unsterile equipment puts the beneficiary at risk of serious harm or death.

Neglect is defined as “the failure or omission on the part of a caregiver to provide the care, supervision, and services necessary to maintain the physical and mental health of a disabled adult or elderly person that a prudent person would deem essential for the  well-being of the patient.” Neglect is serious, as the lack of adequate care or supervision of vulnerable individuals can be fatal. In one case, a personal care service attendant did not provide the services that were billed for an entire week, leaving the beneficiary hospitalized due to malnourishment and dehydration.[16] In another case, a personal care service attendant took a mentally handicap person to a crowded shopping area and lost the individual on a winter day in Philadelphia. The attendant did not immediately seek out the beneficiary nor did the attendant contact authorities in a prompt manner. The beneficiary was later found dead due to hypothermia. Neglect can also stem from fraud. In one case in Arkansas, a personal care service attendant billed Medicaid for services rendered to a beneficiary while frequenting Casino.[17] The attendant’s neglect led to malnourishment and dehydration, eventually leading to the death of the beneficiary.

X. Investigating Abuse or Neglect of a Beneficiary:

Despite the desire of MCFUs to investigate abuse or neglect, allegations are not investigated as often and extensively as they would like due to a lack of federal and state funding to do so. From the close of the 2015 fiscal year to the close of the 2016 fiscal year, open investigations into Abuse or neglect of a beneficiary decreased marginally from 254 to 252 investigations.[18] This marginal decline indicates the limitations placed on MCFUs ability to investigate abuse or neglect of beneficiaries. All of these investigations were criminal. In the same period, criminal convictions for abuse or neglect raised from 44 in 2015 to 52 in 2016. In 2015, there was one civil court settlement for abuse or neglect by a personal care service attendant. Overall it appears that MCFUs are becoming increasingly serious about addressing abuse or neglect by personal care service attendants and will continue to do what they can within their means to address the issues.

personal care service abuse

Table 4: The number of open investigations into abuse or neglect by personal care service attendants at the close of the 2015 and 2016 fiscal years.

Number of Convictions or settlement

Table 5: The number of criminal convictions and civil court settlements/judgements for personal care service abuse or neglect cases in the 2015 and 2016 fiscal years.

 XI. Recoveries from Abuse or Neglect Cases:

As can be expected by the findings of the recent HHS-OIG issue brief, convictions of abuse or neglect of a beneficiary only increased by 8 convictions in 2016, an 18% increase from the 2015 fiscal year. This again highlights the limitations placed of MFCUs in addressing abuse or neglect of beneficiaries. However, the total amount recovered in these cases more than tripled from the 2015 to the 2016 fiscal year, from $71,817 in 2015 to $247,972 in 2016. This substantial increase in recoveries again suggests that MFCUs are increasingly serious about addressing abuse or neglect of beneficiaries.

PCS Attendant

Table 6: The amount of money recovered in personal care service abuse or neglect cases in the 2015 and 2016 fiscal years.

XII.  HHS-OIG Recommendations:

The recommendations made by HHS-OIG are aimed at creating greater state oversight of personal care services provided by aides and attendants to Medicaid beneficiaries. These recommendations include measures such as:

  • Creating an enrollment or registration process for attendants.
  • Requiring comprehensive background checks for personal care service attendants
  • Mandating greater documentation requirements for personal care service attendants, including details such as time of service and services provided.
  • Requiring beneficiary case managers to conduct more in-home/community supervisory visits.
  • Establishing mandatory training or educational standards for personal care service attendants.
  • Cross-referencing personal care service attendant and beneficiary locations to prevent fraudulent billing.
  • Federal funding for investigations and prosecutions of abuse or neglect by in-home/community personal care service agencies.

The current model provides too much opportunity for fraudulent, negligent, and abusive behavior by agency providers to be overlooked. These reforms could effectively deter personal care service providers from engaging in fraudulent, abusive, or negligent behavior by making them aware of the consequences of such behavior. In addition, these reforms would make it easier for MFCUs to effectively hold all personal care service providers accountable for their actions.

XIII.  Conclusion:

At present, despite efforts from personal care agencies to better screen their staff, Medicaid beneficiaries are still finding themselves subject to fraud, abuse and / or neglect by a significant number of individual personal care service aides and attendants each year. Unfortunately, fraud, abuse and / or neglect by personal care service aides and attendants will likely continue to be a major concern until the further safeguards are taken by both personal care agencies and regulators to better protect Medicaid beneficiaries.

In addition to conducting standard due diligence, as an owner of a personal care services agency, it is especially important that you screen your applicants (before hire), employees, vendors and contractors, against all Federal and State exclusion databases, every 30 days.  We recommend that you contact the folks at Exclusion Screening to get this accomplished.  They can be reached at www.exclusionscreening.com

Robert W. Liles Healthcare AttorneyRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, PLLC.  Liles Parker is a health law firm representing personal care agencies and other health care providers around the country in connection with Medicare, Medicaid and private payor audits.  For a complimentary consultation, give Robert a call at: (202) 298-8750.

[1] As mandated by Public Law 95-452, HHS-OIG’s mission is to “protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the health and welfare of beneficiaries served by those programs.”  HHS-OIG’s report entitled “Personal Care Services: Trends, Vulnerabilities, and Recommendations for Improvement” (OIG-12-12-01).

[2] Alberto N. et al. v. Hawkins. (No. 6:99-cv-00459) May 19, 2005.  EDTX, Tyler Division.

[3] https://www.dshs.texas.gov/region1/documents/tmp-personalCareservices.pdf

[4] https://www.dshs.texas.gov/caseman/pcs.shtm

[5] https://oig.hhs.gov/oei/reports/oei-12-16-00500.pdf

[6] “Waste” occurs when unnecessary services are provided that lead to a waste of resources, such as when more hours of services are rendered than are necessary. “Fraud” is defined at 42 C.F.R. §433.304 as “(in accordance with §455.2) . . . an intentional deception or misrepresentation made by a person with knowledge that the deception could result in some unauthorized benefit to himself or some other person. This includes any act that constitutes fraud under applicable Federal of State law.” “Abuse” is defined is defined at 42 C.F.R. §455.2 as “provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. It also includes beneficiary practices that result in unnecessary cost to the Medicaid program.”

[7] https://oig.hhs.gov/reports-and-publications/portfolio/ia-mpcs2016.pdf

[8] https://oig.hhs.gov/oei/reports/oei-09-17-00210.pdf

https://oig.hhs.gov/oei/reports/oei-07-16-00050.pdf

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13]http://www.myfloridalegal.com/newsrel.nsf/newsreleases/8A86BFE3E705BD60852580D5006CC686

[14] http://www.fox9.com/news/caregiver-admits-to-stealing-thousands-in-cash-jewelry-from-elderly-patients

[15] https://www.nbcconnecticut.com/news/local/Personal-Care-Attendant-Accused-of-Stealing-Guitars-from-Client-in-Southington-464400253.html

[16] https://oig.hhs.gov/reports-and-publications/portfolio/ia-mpcs2016.pdf

[17] http://www.swtimes.com/news/caretaker-arrested-fort-smith-man-s-death?start=6

[18] https://oig.hhs.gov/oei/reports/oei-09-17-00210.pdf

https://oig.hhs.gov/oei/reports/oei-07-16-00050.pdf

[19] Ibid.

[20] Ibid.

[21] Ibid.

Medicare Home Services (CPT® codes 99341-99350) are Being Audited

June 20, 2017 by  
Filed under Home Health & Hospice

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(June 20, 2017):  As the Department of Health and Human Services (HHS), Office of Inspector General (OIG), signaled in both its 2016 and 2017 Work Plans, the government is concerned about the rapid growth they are seeing in the number of physician home services billed to the Medicare program.  In order to qualify for coverage and payment, physicians providing this type of care are required to document why it is medically necessary to conduct a home visit of a patient in lieu of an office or outpatient visit.  In light of the restrictive nature of these services, the OIG is in the process of conducting assessments of health care organizations that bill the Medicare program for Evaluation & Management (E/M) services provided at a beneficiary’s home, sometimes colloquially referred to as “house calls.”

I.  CPT Codes Used to Bill E/M Home Services in a Patient’s Residence:

Only a limited set of codes may be used to report E/M services rendered to a patient living in their own home or apartment. CPT® codes 99341 through 99350 are used to code for Home Services.  In order to qualify for coverage and payment under the Medicare program, the documentation must show that the E/M guidelines have been met and, in the case of a nonphysician practitioner (NPP), that the home service provided fits within the scope of practice authorized in that state. A description of these codes is outlined below.  Please note, the time estimates indicated are only included in the AMA CPT Codebook descriptions.  They are not included in either the 1995 or 1997 E/M Guidelines.

Home Visit Codes – New Patient:

99341        Low severity problem, 20 min.

99342        Moderate severity problem, 30 min.

99343        Moderate to high severity problem, 45 min.

99344        High severity problem, 60 min.

99345        Patient unstable or significant new problem requiring immediate physician attention, 75 min.

Home Visit Codes – Established Patient:

93347        Self-limited or minor problem, 15 min.

99348        Low to moderate problem, 25 min.

99349        Moderate to high problem, 40 min.

99350        Patient unstable or significant new problem requiring immediate physician attention, 60 min.

These codes cannot be used if the patient resides in a shared living facility or group home.  In order for a home visit to be billed by a physician, the physician must have actually been present in the beneficiary’s home.  These codes only apply in care settings that can be properly coded as Place of Service (POS) 12 (Patient’s Home).

II.  Does a Patient Have to be “Homebound” in Order to Qualify for Home Services?

The homebound requirements of Medicare’s home health benefit are not applicable to the provision of home services (as billed under CPT codes 99341 through 99350).  In other words, a Medicare beneficiary does not necessarily have to be “confined to the home” in order for a physician to provide a covered home visit. Nevertheless, the medical record must document why it was medically necessary for the physician or qualified NPP to conduct a home visit in lieu of seeing the patient in the physician’s office or in an outpatient clinic.

III. CMS Contractors are Actively Auditing E/M Services Conducted in a Patient’s Home:

It is important to note that in addition to OIG, several CMS contractors are also actively auditing providers that have billed Medicare for E/M services conducted in a patient’s home.  As with their law enforcement counterparts, these administrative contractors are focusing their audits on whether the home visit was, in fact, medically necessary.  As you will recall, a fundamental Medicare requirement under § 1862(a)(1)(A) of the Social Security Act is that:

“. . . no payment may be made under part A or part B for any expenses incurred for items or services —

(1)(A) which, except for items and services described in a succeeding subparagraph, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. . .”

With only limited exceptions,[1] the services provided by a physician or an NPP cannot be services that could be provided by a visiting nurse or home health agency under Medicare’s home health benefits program.

Additionally, the decision to provide home visit services must be based on the medical necessity of providing in-home care. Medicare auditors will review the patient’s medical records carefully to determine if, in fact, the patient was unable to come to the physician’s office or an outpatient clinic for care.  Moreover, even if the documentation supports that the patient was unable to come the physician’s office or outpatient clinic on a specific date due to physical or mental disabilities, if the documentation does not support additional in-home visits, they will be denied.

IV.  Know the Coverage Rules and Check Your LCD Covering Home Services:

It is essential that you understand the coverage and billing requirements governing home services as set out in the Medicare Benefit Policy Manual (MBPM) and the Local Coverage Determination (LCD) issued by your Medicare Administrative Contractor (MAC).  LCD requirements may slightly vary from one jurisdiction to another.  Therefore, you need to ensure that your practices fully comply with the LCD requirements applicable to your claims.

When assessing whether one or more home services are medically necessary, Medicare auditors will carefully examine the documentation associated with each visit.  The documentation of each beneficiary encounter must include:

  1. Reason for the encounter and relevant history;
  2. Physical examination findings, and prior diagnostic test results, if applicable;
  3. Assessment, clinical impression, or diagnosis;
  4. Medical plan of care including how the visit will change/changed the care of the beneficiary.

To be clear, a physician or NPP must also obtain a full range of the administrative information normally obtained in an office visit when visiting a new patient.  For instance:

  • Did you provide the patient with necessary HIPAA privacy information? Did the patient complete a “Notice of Privacy Practices” form
  • Have you obtained an executed “Consent for Treatment” form from the patient?
  • Did you obtain a completed intake form for use with new patients?
  • Did you have the patient complete a form outlining their prior medical, family and social history?
  • Did you provide a copy of the organization’s financial policies to the patient?

V. Risk Areas When Billing for Home Services:

If audited, the Medicare reviewer examining your claims will likely deny payment if one of the following reasons for denial is identified:

  1. It appears that one or more of the home services were was conducted for the convenience of the patient, the patient’s family, or the physician, AND the documentation does not reflect that the patient was unable to come to the physician’s office or an outpatient clinic for care.
  2. The medical record does not clearly demonstrate that the patient, his/her family or another clinician involved in the case sought the initial service. In other words, what was the source of this referral?  Was the care solicited by a party representing the home visit organization?
  3. The home services are provided at a frequency that exceeds that which is typically provided in the office and acceptable standards of medical practice.
  4. The home services are not being personally performed by a physician. It is being performed by an NPP but the claim is being billed at the physician’s rate.
  5. The home services are being solely performed by an NPP but only the physician, not the treating NPP, is credentialed with Medicare.
  6.  The specific services provided during the home services could be provided by a visiting nurse or home health agency.

VI.  Conclusion:

Home services (CPT® codes 99341 through 99350) billed to Medicare are currently being audited by multiple CMS contractors around the country and by OIG.  If you receive a request for medical records from a UPIC, ZPIC or MAC, we recommend that you contact a qualified health lawyer as soon as possible.  Depending on the contractor, the records request you receive may be related to a probe audit OR it may require that you send in a larger sample of records, one that the contractor contends is a “statistically relevant sample.”  If that is the case, the contractor will likely seek to extrapolate the error rate found when it reviews your claims records.  It is imperative that you understand the ramifications of such an audit – call your health lawyer immediately.

Robert W. LilesRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at the health law firm Liles Parker, PLLC.  Liles Parker attorneys represent health care providers around the country in connection with Medicare, Medicaid and Private Payor audits.  For a free consultation, please call: 1 (800) 475-1906.

[1] The Medicare Benefit Policy Manual (MBPM), Sec. 60.4, “Services Incident to a Physician’s Service to Homebound Patients Under General Physician Supervision,” outlines very limited circumstances when a physician can provide services that would normally be performed by a home health agency. Should a UPIC, ZPIC or MAC conduct a postpayment audit of these services, their review will focus, in part, on whether a “substantial number of the services provided under this coverage when they could otherwise have been performed by a home health agency.”

 

 

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