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Are More Home Health Program Integrity Initiatives on the Horizon?

April 22, 2015 by  
Filed under Home Health & Hospice


Physician Face-to-Face Encounter with Patient

(April 22, 2015): Late last month, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) released its 2015 “Compendium of Unimplemented Recommendations” (Compendium). Published annually, the Compendium sets out the top 25  program integrity issues previously identified by HHS-OIG that are expected to “most positively impact HHS programs in terms of cost savings and /or quality improvements” [1] when ultimately implemented. In past years, HHS agencies responsible for implementing these previously-identified problem areas have typically made significant efforts to address HHS-OIG’s recommendations. Not surprisingly, the a number of Medicare home health program integrity issues are again listed in this “hit list” of risk areas susceptible to fraud and abuse by unscrupulous providers.


I.  Home Health Program Integrity Issues Like “Face-to-Face” Examinations Remain a Problem:

As the Compendium sets out, home health program integrity issues remain an ongoing area of concern for HHS-OIG. Under the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) were given a number of expanded authorities and tools designed to assist the agency (and its contractors) in preventing and detecting instances of health care fraud and abuse. Not surprisingly, inadequate and / or incomplete home health documentation remains one of HHS-OIG’s primary concerns, particularly when it comes to the qualifying encounter between a Medicare patient and his or her treating physician. CMS implemented a requirement that a face-to-face encounter, setting out the reason(s) why home health is required, must be properly documented and certified as medically necessary by the patient’s physician. As mandated under the ACA, the requirement to properly document that a compliant face-to-face encounter was conducted by the patient’s certifying physician is a condition of payment.

II.  Deficient Face-to-Face Certifications Can Place Your Home Health Agency in Jeopardy:

Unfortunately, the fulfillment of requirement remains elusive. In a number of recent home health cases we have handled, the Zone Program Integrity Contractor (ZPIC) conducting the audit has asserted that the face-to-face certification completed by the patient’s treating physician has either been deficient or, in some case, completely absent from the medical record. As HHS-OIG has noted in its 2015 Compendium, in prior years, CMS oversight of the face-to-face problem has been minimal. HHS-OIG has estimated that approximately $2 billion in payments for home health services should not have been paid due to the fact that the associated face-to-face encounters conducted did not meet Medicare’s documentation requirements.

III.   What Should Our Home Health Agency do to Comply with Medicare’s Face-to-Face Requirements?

Not surprisingly, home health agencies have expressed concern and frustration over the face-to-face issue. From a business standpoint, home health agencies rely on referrals of patients from community physicians. If a face-to-face encounter is not fully or properly documented by a certifying physician, any Medicare payments resulting from the referral will likely be denied in an audit by a ZPIC. Agencies are therefore required to carefully review each face-to-face certification for completeness and accuracy prior to admitting a patient.

Despite repeated efforts by CMS to provide clarification to home health agencies (and the certifying physicians they work with) regarding what the agency expects and requires in order for a face-to-face certification to be compliant, clear assistance has been an elusive goal. Within the last month, CMS has published the following guidance on face-to-face certification requirements:

  • 03/09/15: “. . . CMS is developing a list of clinical elements within a suggested electronic clinical template that would allow electronic health record vendors to create prompts to assist physicians when documenting the home health (HH) face-to-face encounter for Medicare purposes. Once completed by the physician, the resulting progress note or clinic note would be part of the medical record.  The current draft of the electronic clinical template is available in the Downloads section below. Comments can be sent to In addition to developing an electronic clinical template for documenting a home health face-to-face examination, CMS is developing a paper clinical template. To see information about the home health paper clinical template, see home heath (HH) paper clinical template.
  • 03/23/15: In reviewing the transcript, CMS realizes that inaccurate information was provided related to HHA documentation to support certification for home health services.  Per 42CFR 424.22 (a) and (c), the patient’s medical record must support the certification of eligibility and documentation in the patient’s medical record shall be used as a basis for certification of home health eligibility.  Therefore, reviewers will consider HHA documentation if it is incorporated into the patient’s medical record and signed off by the certifying physician.   More guidance will follow regarding the review of home health claims shortly.  CMS apologizes for the confusion. (emphasis added). The Open Door Forum scheduled for April 8, 2015 @ 1:00pm (EST) is our last scheduled call to discuss the draft Home Health Templates.  An updated version of the draft templates will be posted prior to the Open Door Forum.”
  • 03/30/15: Previously, CMS announced it would conduct an Open Door Forum on the Home Health Electronic and Paper Clinical Template on April 8, 2015 and May 6, 2015 @ 1:00pm (EST) to discuss the draft.  We are now combining these calls and will have one final scheduled call on Tuesday April 28, 2015 at 1:30pm (EST).   An updated version of the draft templates will be posted prior to the Open Door Forum.  We appreciate all the comments we have received and are considering the comments as we revise the draft template.  While we will not be replying directly to questions received in the mailbox, we will try to address the most common issues during the Open Door Forum call.  Please continue to offer your concerns and suggestions as we appreciate your feedback.  The deadline to submit comments is 8:00pm (EST) on May 5th. Comments can be sent [to]

And, finally, last week CMS posted the following:

  • 04/17/15: “The new version of the draft Home Health Electronic Clinical Template and the new draft Paper Template have been developed.  We have removed the old versions to minimize confusion.  The next and final Open Door Forum to discuss this draft template will take place on Tuesday, April 28, 2015 at 1:30 p.m. (EST).  Please submit comments regarding this draft template via e-mail to  We value all of the comments submitted and consider each one, but we cannot guarantee all questions will be addressed during the Open Door Forum call.  We will try to address the most common issues/concerns received.  CMS will continue to accept comments sent to the e-mail address even after the call.  Stakeholders are encouraged to submit questions or comments as quickly as possible.  Once a draft of the template is completed, the template will undergo the required Paperwork Reduction Act (PRA) approval process.  A release date for the template cannot be determined until the PRA process is complete.  Once released in its final approved format, the use of this documentation tool will be voluntary.” (emphasis added).

As reflected in the agency’s multiple posts, the face-to-face issue is a lot more complicated that it may have seemed at first blush, when first included in the ACA as a “condition of payment.”

IV.  Conclusion:

Home health program integrity audits are expected to remain a focus of ZPICs and other CMS contractors for at least the near future.  Unfortunately, part of the ongoing problem faced by home health agencies is that the government’s documentation expectations have been a moving target.  While we appreciate CMS’ repeated efforts to provide definitive guidance on what the agency and its ZPICs expect in terms of documentation and medical necessity, home health providers and their referring physicians are continuing forward, in the hopes that clear instructions will ultimately be provided on this critical requirement. Unfortunately, the government’s ongoing confusion in this area has not precluded Health Integrity, AdvanceMed and other ZPICs around the country from conducting home health audits and denying claims based on the contractor’s assertion that the required face-to-face certification was deficient.

During this interim period, in order to avoid face-to-face denials, home health agencies should continue to carefully review all certifications completed by referring physicians for completeness and accuracy. While changes to prior face-to-face templates issued by CMS will undoubtedly be forthcoming, it remains the responsibility of each agency to review each certification in light of the guidance CMS has issued thus far and to proceed cautiously with each admission.

Robert Liles represents health care providers in RAC and ZPIC appeals.Robert W. Liles, JD, MS, MBA serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law. Robert represents home health agencies of all sizes around the country in connection with a full range of ZPIC prepayment reviews, postpayment audits and suspension actions. He also handles home health False Claims Act cases. For a complimentary consultation, please call Robert at: 1 (800) 475-1906.

[1]Department of Health and Human Services, Office of Inspector General (HHS-OIG), “Compendium of Unimplemented Recommendations” Page I, (March 2015).


CMS Has Clarified the HHA Definition of When a Patient is Confined to Home

CMS has clarified the term Confined to Home.(August 26, 2014): On August 1, 2014, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 192, clarifying their definition of when a home health patient is considered to be Confined to Home as described in the Medicare Benefit Policy Manual. This clarification more accurately articulates the Homebound definition found in the Social Security Act and is intended to prevent confusion and promote greater enforcement of the statute. The homebound clarification discussed in Transmittal 192 takes effect September 2, 2014.  As set out below, it is essential that you meet with your home health staff and referring physicians to better ensure that everyone in the patient care chain fully understands what it means for a patient be Homebound.

I.  Clarifying the Confined to Home / Homebound Definition:

One of the eligibility requirements for Medicare coverage of home health care is that a beneficiary must be certified as “homebound.” The latest transmittal clarifies the definition of Confined to Home in section 60.4.1 of Chapter 15 of the Medicare Benefit Policy Manual (Pub 100-02). Some of the more notable parts of revised Section 60.4.1 is summarized as follows:

For a patient to be eligible to receive covered home health services, the law requires that a physician certify in all cases that the patient is confined to his/her home. For purposes of the statute, an individual shall be considered “confined to the home” (homebound) if the following two criteria are met:

Criteria One:

The patient must either:

  • Because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence


  • Have a condition such that leaving his or her home is medically contraindicated.

If the patient meets one of the Criteria One conditions, then the patient must ALSO meet two additional requirements in Criteria Two below:

Criteria Two:

  • There must exist a normal inability to leave home;


  • Leaving home must require a considerable and taxing effort.

This clarification more accurately articulates the homebound definition found at Sections 1814(a) and 1835(a) of the Social Security Act. It also brings the Manual guidance in line with the 2012 Home Health Prospective Payment System final rule that was published on November 4, 2011 (76 FR 68599-68600).

Additionally, CMS has removed vague terms such as “generally speaking” from the definition to ensure clear and specific requirements. According to CMS, these changes will prevent confusion, promote a clearer enforcement of the statute, and provided more definitive guidance to home health agencies in order to foster compliance.

II.  Final Remarks:

All home health agencies should carefully review Transmittal 192 and the updated Medicare Benefit Policy Manual language. More importantly, home health agencies should educate every member in their clinical staff on the update to ensure strict compliance.

Lately, CMS has been quite active in its efforts to ensure that home health agencies are fully compliant with the Face-to-Face requirements. Nevertheless, agencies must not forget the importance of ensuring that a beneficiary is certified as homebound. This is a requirement that must be met for Medicare coverage! As a result, this clarification should assist help home health agencies in their own audit process and provide clearer guidance to both home health agencies and CMS auditors in the future.

CMS auditors will not relent in their efforts to ensure that Medicare funds are appropriately paid and that home health agencies are meeting the strict requirements for Medicare reimbursement. If you have recently experienced an audit of your records by a Medicare contractor, effective legal counsel is an effective resource that you cannot afford to dismiss. Moreover, implementing an effective compliance plan will more effectively ensure that your compliance efforts meet statutory requirements when – not if – an audit is conducted in your facility. If you need assistance with these two issues, give us a call today and we would be more than happy to assist you.

Saltaformaggio, RobertRobert Saltaformaggio, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by RACs, ZPICs and other CMS-engaged specialty contractors.  The firm also represents health care providers in HIPAA Omnibus Rule risk assessments, privacy breach matters, State Medical Board inquiries and regulatory compliance reviews.  For a free consultation, call 1 (800) 475-1906

Medicare ALJ Appeals of Denied Home Health Claims

February 11, 2014 by  
Filed under Home Health & Hospice

Denied home health claims can be appealed through the Medicare appeals process.(February 11, 2014):  Has a Zone Program Integrity Contractor (ZPIC) denied your home health claims?  If you believe that these denials are unwarranted, your home health agency (HHA) may challenge the denials through Medicare’s administrative appeals process.  Medicare’s appeals process provides five levels of appeal. The first four levels of appeal are before different administrative bodies.  The fifth level of appeal requires that an aggrieved provider file suit in federal court. The levels include: Redetermination (conducted by the Medicare Administrative Contractor); Reconsideration (conducted by a Qualified Independent Contractor, or QIC); after reconsideration, a dissatisfied provider may file for ALJ appeal; next, a provider may seek review by the Medicare Appeals Council; and finally, an appeal to federal court. The purpose of this article is to describe certain considerations peculiar to the ALJ review process from the point of view of a Home Health Agency (HHA), or its legal representative.  The article focuses on the initial steps to be taken before an ALJ hearing and how to proceed during the hearing. 

I. Engaging a Qualified Expert to Challenge an Extrapolation of Damages Related to Home Health Claims:

The extrapolation of alleged overpayment amounts using an error rate calculated by statistical sampling is one of the most powerful weapons a ZPIC can bring to bear against a home health provider. In our experience, it is often difficult for Medicare contractors to properly conduct sampling in the statistically-valid manner required by law.[1] Where extrapolation is used in Medicare enforcement audits, long-standing CMS program materials and Federal caselaw require that the sample in which the error rate is determined to be from established in a statistically valid manner. See HCFA Ruling 86-1 at 4, and Ratansen v. California 11 F.3d 1467 at 1471 (CA 9 1993).

If alleged overpayment amount in your case is large enough to justify it, a home health agency should engage a statistician familiar with Medicare’s processes to examine and critique any extrapolation that have been applied by a ZPIC.  If significant flaws are identified, the home health agency may be able to have the extrapolation reversed by the ALJ. In order to assess and critique the extrapolation, the expert must be able to review the statistical data and methodology used in the sampling.[2] The home health agency’s representative should communicate in writing with the ZPIC or other audit contractor to request in all of the statistical sampling data and records used by the ZPIC when calculating the extrapolation of damages.  If the requisite data is not forthcoming, your attorney should extend its requests to all administrative and appeals contractors who enter into the audit or appeals process. Although reversals of extrapolations are infrequent at the redetermination and reconsideration levels of appeal, they are possible.  Our firm has succeeded in getting extrapolations thrown out at every level of administrative appeal.

Occasionally the Medicare contractors involved in an audit and a subsequent appeal will refuse or merely fail to provide the extrapolation sampling data sufficiently for an expert to evaluate and challenge the extrapolation. When this happens, a home health agency has an argument for the reversal of the extrapolation entirely independent from issues of statistical validity. The contractors inevitably supply claim-line and similar spreadsheets which, while irrelevant to statistical sampling, can bear a superficial similarity to sampling data. The provider must therefore never assume that the absence of extrapolation and sampling data from the documents produced by the contractors will be conceded by the CMS parties, and must be prepared to prove that absence in its appeal just like any other disputed fact.

With this in mind, in any case where the full set of necessary data is given to the provider in an untimely manner or not at all, the statistical expert should examine all data provided by the contractors, and report in writing on its sufficiency for determination for determining statistical validity. The expert should be ready to testify about sufficiency in these cases, and his reports and testimony must be kept separate from those addressing the merits of statistical validity.

II. Engage a Skilled Nurse Expert to Report & Testify on Clinical Issues:

Unless the dollars at issue are small, or the issues in an appeal are exclusively legal in nature, a home health agency can benefit from engaging a skilled nurse as an expert witness.  The nurse expert can provide written reports on clinical issues for submission to the ALJ, and testify at the hearing. If the home health agency has a skilled nurse on staff, he / she may be able to perform these tasks. Otherwise, forensic nurses can be engaged for this purpose who are familiar with home health Medicare claims. In any case, the nurse expert should have education, other training and work experience sufficient to survive a challenge of their qualifications at the hearing.

Because the ALJ’s review in an appeal is a determination de novo of all legal and clinical issues of payability of each claim appealed,[3]the nurse expert’s written report should address all clinical issues in each claim, not just those cited as a grounds for denial in the decision being appealed. Accordingly, the nurse expert’s report should address the homebound status of the beneficiary, and the medical necessity of the services billed to Medicare.

In her testimony at the hearing, however, the nurse should avoid mention of clinical issues that aren’t being argued. The home health agency’s attorney or other representative conducting the hearing must communicate in advance so the nurse expert knows what clinical issues he expects to argue about, can organize her testimony to be concise and effective on those issues, and avoid other topics. The balance of the nurse expert’s report will be in the record if a contractor or the ALJ strays off into clinical issues not addressed by the QIC. If that happens, of course, she should be ready to give verbal testimony on the additional issues as well.

Often during an ALJ hearing, questions will arise about the real-world practices of a home health agency. The nurse expert can be useful to offer advice and explanations in such cases to the ALJ. This boosts the judge’s trust and confidence in the nurse, and tends to enhance her credibility on clinical issues.

 III. Preparation For Hearing: Planning a Method to Streamline the Hearing of Clinical Issues:

Home health cases appealed to the ALJ level typically involve a large number of home health claims.  Most ZPIC overpayment audits employ statistical sampling, where a sample of home health claims is audited, and the resulting error rate (as determined by the ZPIC), is applied to all billings by the home health agency over a multi-year period. To constitute a statistically valid random sample, the sample usually consists of 30-90 individual home health claims. Although individual home health claims may be relatively small, it may not appear to be cost-effective to file an appeal.  We recommend you challenge single claim denials if you believe that the services qualify for coverage and payment.  This can help keep your overall error rate low and reduce the likelihood of future audits and reviews.

Medicare ALJs strive to conclude all appeal hearings in a single day; and every hearing will require at least two hours of arguments on procedural, statistical and legal issues of general application to all claims. Meaningful oral arguments on medical necessity of a single home health claim denial will consume 10-20 minutes. So an actual hearing of oral arguments on medical necessity issues in 30 or more individual claims would simply be too time-consuming to be feasible. Accordingly, most ALJs will seek to establish a method early in the hearing by which separate oral arguments on each claim at issue can be avoided.  Working with your attorney, a home health agency may be able to formulate a method of grouping its claims into a small number of categories, so that representative claims in each category can be argued exhaustively. The separate written arguments on the various claims will remain for separate consideration by the ALJ, but in this way a favorable impression in a stronger claim can be extended to a weaker one.

Meritless arguments run the risk of getting noticed here, in which case they will harm a home health agency’s credibility on the stronger claims. There is little chance a meritless argument will prevail, and having them present hurts the persuasiveness of a home health agency’s other arguments.

An appeal to the ALJ is, strictly speaking, an appeal of the denial reason cited by the QIC in its reconsideration decision.  Nevertheless, since the ALJ level of appeal is a de novo review, you must be prepared to address the alleged errors identified by the ZPIC and the MAC if requested to do so by the judge.

IV. The ALJ’s Record — Consider Citing Risk of Change Factors in Prior Episodes of Care:

Where a home health agency is supporting the medical necessity of skilled nursing services for Observation and Assessment by pointing to factors in the medical record which show a “likelihood of change” as defined in Medicare Program Benefit Manual Ch. 7, §, dangerous and unstable medical conditions evident in the Beneficiary’s medical record are often cited. If the episode in question is a follow-on episode, it is more convincing to point to dangerous and unstable conditions in earlier episodes. This is because medical necessity must be determined as of the date of the physician’s order for the skilled care in question.[4]Conditions which were already documented in the record at the time of the order will be more persuasive in establishing the reasonableness of the physician’s judgment.

To do this, obviously the records of the prior episodes must be available for review and submission to the appeal record; but the need for this sort of argument won’t normally be evident at the start of the case when medical records are being gathered. So for this and for other reasons, it is wise to gather the records of all episodes of care for the Beneficiaries in the appeal, not just the episodes at issue.

The handling of medical records by contractors in Medicare enforcement audits and appeals is notoriously sloppy. Although audit denials are generally based on an audit contractor’s review of medical records it receives from a provider or seizes, and CMS regulations require each contractor handling an appeal to turn over its entire file to the provider upon request,[5]contractors evidently find it impossible to comply. For this reason, providers appealing an overpayment determination must include a full set of all medical and billing records at issue, provided separately with each redetermination, reconsideration, and ALJ appeal filing.

A home health agency should therefore collect all medical billing and other records pertaining to all beneficiaries in the relevant audit sample, “Bates Label” them at the start of the appeal, and include the Bates labeled set with each appeal filing .  The same labeling must be used at every level of appeal. Efforts to organize each set of records in a logical and consistent manner will pay off later as well. The nurse expert and statistical expert must use Bates references for all document identification in their reports and live testimony. Judges always appreciate this, as it vastly speeds and simplifies testimony on any records.

V.  Keep Your Experts’ Live Testimony Short and Concise:

The live hearing before the ALJ is no place for a verbose treatment of a technical subject. Make sure each expert handles his written report, which can and should be a complete coverage of all issues, very differently from his verbal testimony which will be most effective if short. Complex subjects can seldom be communicated exhaustively in a 1-day hearing, and the expert will quickly lose the ALJ if he insists on trying to do that. Make sure your experts plan their testimonies accordingly.

CMS contractors can and do participate in ALJ hearings, but they can do so only as non-parties. Medicare regulations require non-parties to give notice of their intent to participate within 10 days of an ALJ’s notice of a hearing date.[6] When contractors give late notice, or appear at a hearing without notice, your legal representative may choose to object on the record at the start of the hearing. These objections will be more successful if the representative can plausibly argue that he would have prepared differently for the hearing if timely notice had been given. 

A sizable appeal to an ALJ may involve submissions to the judge after the filing of the initial appeal. In any case, evidence submitted subsequent to the issuance of the reconsideration decision can be admitted to the ALJ record only on a motion and showing of good cause.[7  Keep in mind, it is getting more difficult each year to show the requisite requirement of “good cause.”  Therefore, every effort should be made to submit relevant evidence into the record BEFORE the QIC has issued its reconsideration decision.

A seldom-addressed issue in Medicare enforcement audits is non-physicians being allowed to challenge, years after the fact, the medical judgment of physicians who saw the patients and have cared for them. Ostensibly, payment denials for lack of medical necessity are based on “lack of adequate record,” but in practice Medicare audits involve just this sort of second-guessing. The provider’s representative should try to make this point occasionally during the hearing, and not let the ALJ forget that the treating physician’s medical judgment is reflected in the medical records he is reviewing.

A recognized goal of home health care is keeping beneficiaries out of nursing homes and other long-term care facilities; and Medicare Benefit Policy Manual Ch. 7, §30.5.2 expressly provides that the number of re-certification periods for Home Health Care is unlimited as long as the beneficiary remains qualified. CMS contractors however often look askance at successive recertification periods, and suggest they are disfavored[8]. Providers’ representatives should not allow a suggestion along those lines at an ALJ hearing to go unchallenged, and be prepared to explain why and by what authority home health care is not limited to any specific time period.

Healthcare LawyerDavid Parker practices in the business transaction and healthcare areas. In the health law area, Mr. Parker represents providers in Medicare, Medicaid, and private payor administrative proceedings involving overpayment, revocation and other audit matters, and buyers and sellers in healthcare related transactions. He also gives advice on False Claims Act, Stark, and Anti-Kickback Statute issues.  For a free consultation, call:  1 (800) 475-1906.

[2]. Medicare Program Integrity Manual Ch. 8, § lists the extrapolation statistical data which the contractor must preserve in its files and make available to the provider.

[3]. 42 CFR 405.1032(a).  The ALJ cannot however re-open claims in an audit which are not appealed to him.

[5]. See Medicare Claims Processing Manual Ch. 29, §300.3

[6]. See 42 CFR §405.1010(b)

[7]. See 42 CFR §405.1018 & 1028

[8]. Several CMS contractors disseminate program materials which state, without citing any authority, that Home Health Care should be provided only for short periods. For example, one enforcement contractor in the Southwest includes in its standard form Educational Letter on Medicare HHC the statement “We must preserve …HHC services [for] people who, for a short period of time, are too… infirm to leave their homes…to receive physician…services.”


Health Integrity Educational Letter Sent to Home Health Agencies in Texas and Oklahoma

November 8, 2013 by  
Filed under Home Health & Hospice

Has your home health agency received a Health Integrity educational letter?(November 8, 2013):  Health Integrity serves as the Zone Program Integrity Contractor (ZPIC) for Zone 4.  This zone is comprised of Texas, Oklahoma, New Mexico and Colorado.  Generally, Health Integrity has been assigned responsibility for handling Medicare Part A, Medicare Part B, and Durable Medical Equipment (DME) claims.  Health Integrity has been especially aggressive in its review and audit of home health care claims submitted to Medicare for payment by providers within Zone 4.  While prior enforcement efforts have typically included postpayment audits and placing problem providers on suspension, recent enforcement efforts have tended to focus on actions designed to prevent the submission of improper claims in the first place, such as placing a provider on prepayment review. Most recently, home health agencies in Texas and Oklahoma received a Health Integrity educational letter advising targeted specific home health agencies that Medicare is concerned about certain practices of home health providers.  As the letter detailed, home health agencies receiving these letter have been “flagged” by the contractor as:

“[S]ubmitting claims and/or billing patterns indicative of higher risk of aberrant practices in comparison to expectations, standard thresholds, and/or established norms.”

As the Health Integrity educational letter further sets out, there are a number of specific Medicare medical necessity, documentation and other regulatory concerns that are currently under review by the ZPIC.

 I.  Nature of Medicare Concerns Discussed in the Health Integrity Educational Letter:

The various challenges faced by home health agencies may vary from one to agency to another.  Nevertheless, there are a handful of “general” risks facing all home health agencies that are outlined in Health Integrity’s November 1st letter.  These areas of recurring concern include:   

A.    Is the Patient Truly Confined to His / Her Home?

As Health Integrity’s letter states, under Chapter 7 § 30.1 of the Medicare Benefit Policy Manual, a patient’s medical records must accurately reflect that the patient qualified as “homebound” during the specific period under review.  Denials based on lack of homebound status are not new – home health agencies should have a solid handle on these requirements by now.  Having said that, it isn’t merely enough for a patient to merely qualify as homebound – you and your staff need to fully and accurately document the specific clinical facts which support each patient’s homebound status.  Detail is important.  Is the patient ever absent from the home?  If so, what is the reason for the absence?  How long were gone?  In consideration of any absences, does the patient continue to qualify as homebound?  All of these are important questions to be asked.

Importantly, as of November 19, 2013, the Centers for Medicare and Medicaid Services (CMS) will require Medicare beneficiaries to meet two sets of criteria before their home health agency even considers whether they have an ordinary inability to leave home.  As MLN  Matters Number: MM8444 provides:

An individual shall be considered “confined to the home” (homebound) if the following two criteria are met:


The patient must either:

Because of illness or injury, need the aid of supportive devices such as crutches, canes, wheelchairs, and walkers; the use of special transportation; or the assistance of another person in order to leave their place of residence


Have a condition such that leaving his or her home is medically contraindicated.

If the patient meets one of the criteria in Criteria-One, then the patient must ALSO meet two additional requirements defined in Criteria-Two below.


There must exist a normal inability to leave home;


Leaving home must require a considerable and taxing effort.

B.    Are Timely, Valid Physician Orders in the Record Which Support the Care Provided?

How was each patient referred to your home health agency for care and treatment?  What are the qualifications of the referring physician?  Who signed the patient’s “Plan of Care”? When was it received back from the physician? What types of treatment were ordered by the referring physician?  Were any verbal orders documented in the record?  Have all Orders been signed and dated in a timely fashion?  Were all supplemental physicians’ orders signed and dated before the claim was billed to Medicare? If so, identify the orders and list the dates they were signed. Were the services billed properly?

C.    Is there a Need for Skilled Care?      

Documenting a patient’s need for and receipt of “skilled care” has been a perennial problem for many home health agencies.  In most instances, we have found that the agency’s clinical staff has not been properly trained to document skilled care issues. What specific skilled services (e.g. injections, wound care, catheter changes, gait training) were provided to the patient during a particular episode?  Ultimately, home health agencies should re-familiarize themselves with Chapter 7 §§ 40.1, 40.2 of the Medicare Benefit Policy Manual.

D.    Are “Length of Stay” Issues to be Considered?

Data mining is enormously helpful to the government in identifying home health providers whose business and / or clinical practices essentially make them an “outlier” when compared to the practices of their peers.  A patient’s length of stay on service is one of the most common comparisons used by ZPICs when making targeting decisions.  Provide a detailed rationale as to why the patient was admitted to / recertified for home health services at the beginning of this episode.

II.   Why is Our Home Health Agency Receiving a Health Integrity Educational Letter?

Not all home health agencies in Texas, Oklahoma and the rest of Zone 4 received a copy of Health Integrity’s “Educational Letter” dated November 1, 2013.  If your home health agency  received a copy of Health Integrity’s letter, it could be based on the fact that your agency has previously received a number of ADR’s, been placed on prepayment review or been subjected to a prior review or one type or another. Alternatively, your home health agency may have been sent Health Integrity’s letter based solely on the ZPIC’s data mining findings.  Your agency may be an outlier in terms of its business or clinical statistics.  As such, your agency has now been “flagged” by the ZPIC.

In any event, it is extremely important for you to recognize the importance of Health Integrity’s Educational Letter. Pursuant to the Medicare Modernization Act of 2003, 42 U.S.C. § 1395ddd(f)(3), (§ 1893(f)(3) of the Act):

A Medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise unless the Secretary determines the –

(A)  there is a sustained or high level of payment error; or

(B)  documented educational intervention has failed to correct the payment error.

The CMS Medicare Program Integrity Manual § 3,10.1.4 provides specific guidance on when statistical sampling may be used. As the section states:

“The PSC BI units and the contractor MR units shall use statistical sampling when it has been determined that a sustained or high level of payment error exists, or where documented educational intervention has failed to correct the payment error.”

Both fundamental fairness and a plain reading of both the underlying statute and CMS guidelines require that Medicare overpayment auditors (including Health Integrity) have justification before beginning a statistical sampling of a provider’s Medicare claims.  If the auditors could select anyone for audit without cause, the administrative burden on providers would be extraordinarily high.  Therefore, the justification for a high error rate or failed education must be based on evidence that exists before the sample is selected.  In light of the “Educational Letters” recently sent to home health providers by Health Integrity, the ZPIC will now be free to seek extrapolated damages since they can now allege that continuing problems were not corrected through educational intervention.

III.  How Should Our Home Health Agency Respond to Health Integrity Educational Letter?

If your agency has received a Health Integrity Educational Letter, one option would be for you to just take the information in stride, remind your staff of their regulatory obligations and hope for the best.  A more affirmative approach would be to review your practices and ensure that the concerns set out in Health Integrity’s letter are not problems in your organization.  Should you find that deficiencies are present, remedial action should immediately be taken and any overpayments must be immediately refunded to Medicare.  While the specific approach taken by your home health agency in responding to Health Integrity’s concerns will differ from one organization to another, we believe that it is imperative that all recipients review their practices to help better ensure that Medicare’s regulatory requirements are being met.

Healthcare LawyerRobert W. Liles serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law.  Our firm represents home health agencies and other health care providers around the country in connection with ZPIC enforcement actions, prepayment reviews, postpayment audits, and a wide range of other regulatory matters.  Should you have any questions or concerns regarding your home health agency, please give us a call for a free consultation: 1 (800) 475-1906

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

March 21, 2012 by  
Filed under Home Health & Hospice

Agencies Should Fully Evaluate Their Home Health Compliance Risks.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

V.  Conclusion:

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

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

MFCU Strike Force Teams are Taking Aim at Home Health Providers

July 19, 2010 by  
Filed under Home Health & Hospice

MFCU Strike Force(July 19, 2010): Home health care providers are in the crosshairs again.  On July 15, HHS granted Florida a waiver of the anti-data mining provisions of federal Medicaid program regulations that will allow its Medicaid Fraud Control Unit (MFCU) to begin seeking out reasons to investigate home health and other providers for fraud.  While Florida is the first and currently the only state to obtain a waiver of this type, if Florida’s MFCU strike force pilot program succeeds, the other 49 MFCUs could soon be doing the same thing. MFCU strike forces are designed to investigate referred cases of fraud.  They are prohibited by 42 CFR §1007.19(e)(2) from receiving federal funding for conducting analysis to independently identify Medicaid fraud.  In their formal July 7th request, the Florida Attorney General and Florida Agency for Health Care Administration Secretary requested an expedited waiver of those protections.

The pilot program, intended to be effective January 1, 2011, will allow the state MFCU to use data mining to “identify situations in which a question of fraud may exist, including the screening of claims, analyses of patterns of practice, or routine verification with recipients of whether services billed by providers were actually received.”  The Florida officials’ request makes a point of calling out home health providers in justifying this expansion of the MFCU’s powers, declaring that:

[S]ome services such as durable medical equipment and home health are frequent targets of fraudulent activity…” and

areas of particular concern that the demonstration would address include …home and community based waivers, payments to assisted living facilities, and home health services.” (Emphasis added).

We are greatly concerned by the continued targeting of home health providers by state and Federal officials.  Given the explicit program goals of increasing the number of leads and cases, the number of arrests and convictions, the number of overpayment and abuse referrals, and the recovery of funds and then serving as a model for other states, this program warrants close monitoring.

Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.