On August 2, 2012, the Department of Health and Human Services Office of Inspector (OIG) released a report examining inappropriate and questionable billing in the home health industry.  OIG states in the report that it analyzed 2010 Medicare claims data from home health agencies (HHAs) to determine whether and to what extent inappropriate payments had been made.  The report notes that in 2010, Medicare paid $19.5 billion to HHAs for services provided to 3.4 million beneficiaries, and that recent investigations and other OIG studies have indicated that home health services are vulnerable to fraud, waste and abuse.

According to the report, OIG found that in 2010, Medicare inappropriately paid $5 million for home health claims.  OIG states that these inappropriate payments were the result of three specific errors:  an overlap between inpatient hospital stays and home health services; an overlap between skilled nursing facility stays and home health services; and billing for home health services after a beneficiary’s death.  Further, OIG found that approximately one in every four HHAs exceeded the threshold indicating unusually high billing for at least one of OIG’s six measures of questionable billing.  These measures include, among other things, average Medicare payment amount per beneficiary and average number of visits per beneficiary.  (OIG notes, however, that while exceeding the measure thresholds might indicate potential fraud, there may be legitimate reasons for doing so.)  OIG also found that HHAs with questionable billing tended to be located in California, Florida, Michigan and Texas.

In light of its findings, OIG has made the following recommendations to CMS:

  • Implement claims processing edits or improve existing edits;
  • Increase monitoring of billing for home health services;
  • Enforce and reevaluate the 10 percent cap on total outlier payments that an HHA is permitted to receive each year;
  • Consider implementing a temporary HHA enrollment moratorium in Florida and Texas; and
  • Take appropriate action regarding inappropriate payments and HHAs with questionable billing.

To view OIG’s report, click here.