Amedisys, Inc., the largest home health care company in the U.S., has received a civil investigative demand pursuant to the False Claims Act from the Department of Justice. According to reports from the Wall Street Journal, the CID received by Amedisys requests documents and information relating to “clinical and business operations, including reimbursement and billing claims submitted to Medicare.”

Under the False Claims Act, the DOJ may issue a CID to any person that the Attorney General “believe[s] may be in possession, custody, or control of any documentary material or information relevant to a false claims law investigation. . . .” 31 U.S.C. § 3733(a)(1). The issuance of a CID means that an investigation under the False Claims Act is in progress.

Amedisys and the home health care industry have been the subject of recent investigations focused on whether therapists were instructed or incentivized to increase home visits to meet a certain threshold that would result in higher reimbursement payments. Until January 2008, Medicare paid $2,200 for up to nine home therapy visits. When a tenth home therapy visit was made, Medicare would pay an additional $2,200.

In April 2010, the Wall Street Journal published an article stating that an analysis of publicly available Medicare records revealed that Amedisys’ claims for home therapy visits tended to “cluster” near the ten visit threshold and that “Amedisys provided many of its patients just enough therapy visits to trigger the extra $2,200 payment.” Shortly thereafter, the Senate Finance Committee began an investigation of Amedisys and other large home health care companies such as Gentiva Health Services, Inc., LHC Group, Inc., and Almost Family, Inc. The Securities and Exchange Commission also issued subpoenas to the same companies. These investigations focused on whether there was a practice of increasing the number of home therapy visits beyond the number that was necessary.

The “clustering” of home therapy visits around reimbursement thresholds has apparently continued after Medicare’s reimbursement for home therapy visits was changed in January 2008. Additional Medicare reimbursement payments are now triggered at six, 14, and 20 visits. Medicare Payment Advisory Committee (MedPAC), the federal agency that advises Congress on Medicare payments, has reported that the number of home therapy visits now cluster around six, 14, and 20 visits.

However, it is not clear whether the “clustering” of home therapy visits is evidence of billing for home therapy visits that were not necessary or merely reflects a home health care company’s focus on a particular type of patient that has a genuine need for more visits. The April 2010 Wall Street Journal article quoted a spokesman for LHC Group, Inc. as stating “the shift in therapy visits noted in your data resulted from a change in the types of patients we cared for and not a change in treatment patterns.”

Even though the type of data mining and analysis of Medicare and Medicaid claims performed by MedPAC and the Wall Street Journal may not reveal the full story behind a provider’s business practices or, in the case of home therapy, the number of therapy visits that were actually necessary, these methods are tools that government agencies increasingly rely on to identify Medicaid and Medicare providers for investigation. With the enactment of the Patient Protection and Affordable Care Act (PPACA) on March 23, 2010, investigations and false claims actions based on data mining and analysis will likely become even more prevalent as the PPACA provides for the creation of an Integrated Data Repository to be operated by the Centers of Medicare and Medicaid Services.