With the onset of Fall comes cooler temperatures, changing leaves and new compliance targets from the Federal government. At the beginning of each fiscal year, the Department of Health and Human Services’ (HHS) fraud and abuse prevention arm, the Office of Inspector (OIG), issues its annual Work Plan that sets out what the OIG has determined to be high risk areas on which it will focus its investigative, enforcement, and compliance efforts. This year’s Work Plan has several provisions relating to home health agencies (HHAs) and hospice providers. The following is not an all-inclusive list, but gives the industry a feel for what the OIG will be focusing on in the year to come. The Work Plan can be viewed in its entirety on the OIG’s website.

HHA Profitability. The OIG has targeted HHA profitability for FY 2011 because of the significant increase in Medicare home health expenditures since 2000. Section 1895 of The Social Security Act required a prospective payment system (PPS) for home health services. The OIG will review cost report data to analyze HHA profitability trends under the home health PPS to determine whether the payment methodology should be adjusted. The OIG will also examine various trends, including profitability trends in Medicare and overall profitability trends for freestanding and hospital-based HHAs.

Medicare HHA Enrollment. As with other HHS agencies, the OIG is focusing on Medicare enrollment as a primary tool in combating fraud and abuse. Previous work by the OIG discovered improper enrollment of DME suppliers who were often associated with HHAs through shared owners and/or managers. In addition, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, (the Affordable Care Act a/k/a “Obamacare”) passed earlier this year set new enrollment requirements for Medicare and Medicaid. The OIG will review the program integrity efforts of CMS, its contractors, and State agencies during the HHA enrollment process to determine whether those efforts are preventing the enrollment of questionable HHA applicants.

Hospice Utilization in Nursing Homes. Nothing new here — the OIG has expressed concerns over hospice-nursing home relationships since at least 1998 (OIG Special Fraud Alert: Fraud and Abuse in Nursing Home Arrangements with Hospices). This year’s Work Plan cites a recent report which found 82 percent of hospice claims for beneficiaries in nursing homes did not meet Medicare coverage requirements. As a result, the OIG has committed this year to examine the characteristics of nursing homes with high utilization patterns of Medicare hospice care and the characteristics of the hospices that serve them. The OIG will also be assessing the business relationships between nursing homes and hospices and the marketing practices and materials of hospices associated with high utilization patterns. The OIG has also targeted hospice and nursing facility medical records, including plans of care, in an effort to determine the extent to which hospices and nursing facilities coordinate care and identify service and payment arrangements between them. The OIG will also assess the appropriateness of hospices’ general inpatient care claims.

Medicaid Issues. The OIG intends to review Medicaid expenditures for both HHAs and hospice providers to ensure that HHAs meet provider criteria, claims meet Medicaid coverage requirements, recipients are eligible and the services are reasonable and necessary. With respect to hospice providers, the Work Plan cites over $2 billion dollars in Medicaid hospice expenditures for FY 2009, a statistic that suggests the OIG suspects waste, fraud or abuse and will be investigating that suspicion in FY 2011.

The Work Plan serves as a reminder each year for providers to review their compliance programs. The Affordable Care Act makes this task more important than ever as it requires providers to have a compliance program containing certain core elements in order to enroll in Medicare and Medicaid. The core elements will be specific to each industry sector and will be published by HHS in future regulations.