Medicare Home Health Benefit

Home health care is an important Medicare benefit, allowing beneficiaries with acute-care needs, such as recovery from hip replacement, and chronic conditions, such as congestive heart failure, to receive care in their homes rather than in more costly settings, such as nursing homes and hospitals. Drawing on past and ongoing GAO work on the home health care industry, this testimony summarizes (1) the general nature of beneficiary eligibility criteria, which opportunists exploit to provide excessive services; (2) diminished Medicare contractor review and audit effort, which makes it less likely that abusers will be caught; (3) weaknesses in Medicare's home health provider certification process; and (4) new tools that Congress has provided to strengthen oversight of the home health benefit, including provisions of the Health Insurance Portability and Accountability Act of 1996 and the Balanced Budget Act of 1997.

GAO noted that: (1) several historical factors have produced an environment that, until recently, has enabled improper billing and cost-reporting practices to grow unchecked; (2) legislation and coverage policy changes in response to court decisions in the 1980's made it easier for beneficiaries to obtain home health coverage and harder for Medicare claims reviewers to deny questionable claims; (3) from 1989 until recently, the volume of claims reviews and cost-report audits plummeted, reducing the likelihood that improprieties would be detected; (4) because of the laxity of Medicare's survey and certification process, agencies with no experience or proof of capability were certified as providers; (5) moreover, home health agencies were unlikely to be terminated or penalized even when they were cited repeatedly for providing substandard care or otherwise failed to comply with conditions of participation; (6) recent legislation has enhanced the Health Care Financing Administration's ability to improve its oversight of the home health benefit; (7) in 1995, a multiagency government effort known as Operation Restore Trust launched a new anti-fraud-and-abuse campaign, targeting home health services, among others, for investigation; (8) the following year, the Health Insurance Portability and Accountability Act of 1996 provided dedicated funding to finance, in part, the investigative efforts of the Department of Health and Human Services' Office of the Inspector General and other federal agencies; and (9) a year later, the Balanced Budget Act of 1997 mandated reforming Medicare's method of paying for home health services and contained additional provisions designed to tighten the use and oversight of the home health benefit.