Medicare
Improvements Needed to Address Improper Payments in Home Health Gao ID: GAO-09-185 February 27, 2009Medicare spending on home health totaled $12.9 billion in 2006, up 44 percent from 2002. Concerns have been raised that improper payments from practices indicating fraud and abuse may have contributed to Medicare home health spending and utilization. The Centers for Medicare & Medicaid Services (CMS), the agency that administers Medicare, is responsible for minimizing improper payments made on behalf of Medicare beneficiaries. GAO was asked to examine the growth in Medicare home health spending and utilization and the benefit's vulnerability to improper payments. GAO focused on states with the highest growth in Medicare home health spending or utilization; fraudulent and abusive practices contributing to recent spending and utilization; and administrative issues that make it vulnerable to improper payments. GAO analyzed Medicare claims data; reviewed Medicare laws and regulations and CMS documents; and interviewed stakeholders and contractors that administer and protect the home health benefit.
California, Florida, Nevada, Oklahoma, Texas, and Utah were identified as experiencing the highest growth in Medicare home health spending or utilization from 2002 through 2006. These states ranked among the three highest in one or more of four spending and utilization indicators. Florida and Texas were among the top three on three or more indicators. Texas, Florida, and Nevada--the states with the highest percentage growth in Medicare home health spending from 2002 through 2006--had more than double the national spending growth rate of 44 percent during this period. Upcoding--overstating the severity of a beneficiary's condition--by home health agencies (HHA) and other fraudulent and abusive practices contributed to Medicare home health spending and utilization. For example, a CMS contractor found that only 9 percent of claims were properly coded for 670 Houston beneficiaries who had the most severe clinical rating and who were served by potentially fraudulent HHAs. Court cases and Department of Health and Human Services Office of Inspector General actions illustrated that kickbacks and billing for services not rendered also contributed to Medicare spending and utilization. Stakeholders identified these practices as common types of home health fraud and abuse. Inadequate administration of the Medicare home health benefit leaves the benefit vulnerable to improper payments. Although CMS policy charges its contractors, known as Regional Home Health Intermediaries (RHHI), with the responsibility of screening applications from prospective Medicare HHAs, CMS does not require RHHIs to verify the criminal history of persons named on the application. CMS does not generally include physicians, who are in a position to detect certain types of improper billing, in the agency's efforts to detect improper payments. For instance, CMS does not provide physicians responsible for authorizing home health care with information that would enable them to determine whether an HHA was billing for unauthorized care. Current CMS regulations provide for the removal of HHAs or HHA officials from Medicare for one type of abusive billing--billing for services that could not have been rendered. However, the agency has yet to address the removal of HHAs or HHA officials engaging in other types of abusive or improper billing.
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Report to the Ranking Member, Committee on Finance, U.S. Senate:
United States Government Accountability Office:
GAO:
February 2009:
Medicare:
Improvements Needed to Address Improper Payments in Home Health:
GAO-09-185:
GAO Highlights:
Highlights of GAO-09-185, a report to the Ranking Member, Committee on
Finance, U.S. Senate.
Why GAO Did This Study:
Medicare spending on home health totaled $12.9 billion in 2006, up 44
percent from 2002. Concerns have been raised that improper payments
from practices indicating fraud and abuse may have contributed to
Medicare home health spending and utilization. The Centers for Medicare
& Medicaid Services (CMS), the agency that administers Medicare, is
responsible for minimizing improper payments made on behalf of Medicare
beneficiaries. GAO was asked to examine the growth in Medicare home
health spending and utilization and the benefit‘s vulnerability to
improper payments. GAO focused on states with the highest growth in
Medicare home health spending or utilization; fraudulent and abusive
practices contributing to recent spending and utilization; and
administrative issues that make it vulnerable to improper payments. GAO
analyzed Medicare claims data; reviewed Medicare laws and regulations
and CMS documents; and interviewed stakeholders and contractors that
administer and protect the home health benefit.
What GAO Found:
California, Florida, Louisiana, Nevada, Oklahoma, Texas, and Utah were
identified as experiencing the highest growth in Medicare home health
spending or utilization from 2002 through 2006. These states ranked
among the three highest in one or more of four spending and utilization
indicators. Florida and Texas were among the top three on three of the
four indicators. Texas, Florida, and Nevada”the states with the highest
percentage growth in Medicare home health spending from 2002 through
2006”had more than double the national spending growth rate of 44
percent during this period.
Upcoding”overstating the severity of a beneficiary‘s condition”by home
health agencies (HHA) and other fraudulent and abusive practices
contributed to Medicare home health spending and utilization. For
example, a CMS contractor found that only 9 percent of claims were
properly coded for 670 Houston beneficiaries who had the most severe
clinical rating and who were served by potentially fraudulent HHAs.
Court cases and Department of Health and Human Services Office of
Inspector General actions illustrated that kickbacks and billing for
services not rendered also contributed to Medicare spending and
utilization. Stakeholders identified these practices as common types of
home health fraud and abuse.
Inadequate administration of the Medicare home health benefit leaves
the benefit vulnerable to improper payments. Although CMS policy
charges its contractors, known as Regional Home Health Intermediaries
(RHHI), with the responsibility of screening applications from
prospective Medicare HHAs, CMS does not require RHHIs to verify the
criminal history of persons named on the application. CMS does not
generally include physicians, who are in a position to detect certain
types of improper billing, in the agency‘s efforts to detect improper
payments. For instance, CMS does not provide physicians responsible for
authorizing home health care with information that would enable them to
determine whether an HHA was billing for unauthorized care. Current CMS
regulations provide for the removal of HHAs or HHA officials from
Medicare for one type of abusive billing”billing for services that
could not have been rendered. However, the agency has yet to address
the removal of HHAs or HHA officials engaging in other types of abusive
or improper billing.
What GAO Recommends:
CMS stated it would consider two of our four recommendations”to amend
regulations to expand the types of improper billing practices that are
grounds for revocation of billing privileges and to provide physicians
who certify or recertify plans of care with a statement of services
received by beneficiaries. CMS provided comments on, but neither agreed
nor disagreed with our other two recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-09-185] or key
components. For more information, contact James C. Cosgrove at (202)
512-7114 or cosgrovej@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Seven States Identified as Experiencing Highest Medicare Home Health
Spending or Utilization Growth from 2002 through 2006:
Upcoding and Other Fraudulent and Abusive Practices Contributed to Home
Health Spending and Utilization:
Inadequate Screening, Monitoring, Investigation, and Enforcement
Procedures Leave Home Health Benefit Vulnerable to Improper Payments:
Revalidation and Targeted Local Efforts Show Potential to Reduce Home
Health Fraud and Abuse:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Medicare Home Health Spending and Utilization Growth in the
United States, 2002 through 2006:
Appendix II: Comments from the Centers for Medicare & Medicaid
Services:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Examples of Medicare Home Health Court Cases and OIG Actions:
Table 2: Percentage Growth in Medicare Home Health Spending from 2002
through 2006, States in Descending Order:
Table 3: Percentage Growth in the Percentage of Medicare Beneficiaries
Who Used HHA Services from 2002 through 2006, States in Descending
Order:
Table 4: Percentage Growth in the Number of HHAs from 2002 through
2006, States in Descending Order:
Table 5: Percentage of Outlier Cases, States in Descending Order, 2006:
Figures:
Figure 1: States with the Highest Percentage Growth in Medicare Home
Health Spending from 2002 through 2006:
Figure 2: States with the Highest Percentage Growth in the Percentage
of Beneficiaries Who Used Home Health Services from 2002 through 2006:
Figure 3: States with the Highest Percentage Growth in the Number of
HHAs from 2002 through 2006:
Figure 4: States with the Highest Percentage of Outlier Cases in 2006:
Abbreviations:
CERT: Comprehensive Error Rate Testing:
CMP: civil monetary penalty:
CMS: Centers for Medicare & Medicaid Services:
CON: Certificate of Need:
HHA: home health agency:
HHS: Department of Health and Human Services:
MAC: Medicare Administrative Contractors:
MedPAC: Medicare Payment Advisory Commission:
OIG: Office of Inspector General:
PPS: prospective payment system:
PSC: Program Safeguard Contractor:
RAP: Request for Anticipated Payment:
RHHI: Regional Home Health Intermediary:
USAO: U.S. Attorneys' Offices:
ZPIC: Zone Program Integrity Contractors:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
February 27, 2009:
The Honorable Charles E. Grassley:
Ranking Member:
Committee on Finance:
United States Senate:
Dear Senator Grassley:
In 2006, Medicare spent $12.9 billion for the 2.8 million beneficiaries
receiving home health care--in-home services provided to beneficiaries
who need care following discharge from a hospital or who have chronic
conditions that require continuing but intermittent care. Spending on
the Medicare home health benefit grew about 44 percent from 2002
through 2006, despite an increase of just less than 17 percent in the
number of beneficiaries using the benefit during that 5-year period. In
addition, the number of home health agencies (HHA) increased from 6,553
in 2002 to 8,463 in 2006, with more than half of the increase occurring
in just two states--Florida and Texas. The Medicare Payment Advisory
Commission (MedPAC)[Footnote 1] reported higher profit margins for HHAs
for this period compared to other types of Medicare providers as well.
MedPAC estimated average profit margins of 15.4 percent for
freestanding HHAs in 2006, compared with profit margins of 13.1 percent
for skilled nursing facilities, 12.4 percent for inpatient
rehabilitation facilities, and 5.9 percent for outpatient dialysis
centers.
The rapid growth in Medicare home health spending and the growth in the
number of HHAs have led to concerns about whether improper payments to
HHAs contributed to the high home health spending. Improper payments
can be due to mistakes on the part of HHAs, as well as fraud and abuse.
[Footnote 2] For example, improper payments can occur when an HHA
submits claims on behalf of beneficiaries who do not meet Medicare's
coverage criteria, for services that are not reasonable and necessary,
or for services that are not delivered.
For the 12-month period ending September 30, 2007, the Comprehensive
Error Rate Testing (CERT) program--a program that monitors payment
accuracy in the Medicare fee-for-service program--estimated that
approximately 1.4 percent of Medicare home health claims were
improperly paid, resulting in more than $209 million of improper
payments. However, fraudulent claims may not be reflected in the CERT
error rate estimate. Because the program uses a random sample to select
claims, reviewers are unable to see provider billing patterns that
indicate potential fraud when making payment determinations.[Footnote
3]
One of the responsibilities of the Centers for Medicare & Medicaid
Services (CMS)--the agency that administers Medicare--is to minimize
improper payments made on behalf of its beneficiaries. GAO previously
reported on CMS's lack of controls over the Medicare home health
benefit and its susceptibility to improper payments, including fraud
and abuse.[Footnote 4] GAO has designated Medicare a high-risk program
since 1990 because of the program's vulnerability to improper payments.
You expressed questions about the recent growth in Medicare home health
spending and utilization and about whether the Medicare home health
benefit was vulnerable to certain types of improper payments,
specifically those that may indicate fraud and abuse. In this report we
examined both home health spending and utilization growth and the
vulnerability of the Medicare home health benefit to improper payments.
Specifically, we identified: (1) the states where home health spending
or utilization growth has been the highest; (2) the fraudulent and
abusive practices that may have contributed to home health spending and
utilization; (3) aspects of the Medicare home health benefit's
administration that make it susceptible to improper payments; and (4)
lessons learned from recent CMS initiatives to reduce fraud and abuse
in the home health benefit.
To identify the states with the greatest home health spending or
utilization growth from 2002 to 2006, we analyzed Medicare home health
claims data for the 50 states and Washington, D.C., on various indexes,
including growth in total spending; growth in percentage of
beneficiaries using the benefit; growth in the number of HHAs; and the
number of home health cases qualifying for outlier payments, which are
additional payments for particularly expensive beneficiaries.[Footnote
5] We assessed the reliability of the 2002 and 2006 claims data from
CMS by reviewing existing information about the data and the systems
that produced them, and interviewing a CMS contractor about the data.
We determined that these data were sufficiently reliable for the
purposes of this report.
To identify the types of fraud and abuse that may have contributed to
home health spending and utilization, we interviewed stakeholders,
including CMS officials, CMS contractors responsible for processing
home health claims and home health program safeguard activities,
Department of Health and Human Services (HHS) Office of Inspector
General (OIG) officials,[Footnote 6] and officials with national and
state associations of home health care providers. We analyzed Medicare
home health claims for the 50 states and Washington, D.C., from 2006,
specifically those claims for beneficiaries receiving home health care
for diabetes because some stakeholders expressed concerns about the
legitimacy of payments for diabetic beneficiaries. We also reviewed
information from court cases and OIG actions related to Medicare home
health fraud and abuse.
To identify aspects of the Medicare home health benefit and its
administration that make it susceptible to improper payments, we
reviewed CMS policies and procedures and relevant Medicare laws and
regulations. We also reviewed relevant MedPAC and OIG reports about the
Medicare home health benefit. In addition, we conducted site visits to
one of the three CMS contractors responsible for processing Medicare
home health claims and one of the four CMS contractors responsible for
Medicare home health program safeguard activities. We also interviewed
stakeholders to get their insights into aspects of the Medicare home
health benefit that make it susceptible to fraud and abuse.
To identify lessons learned from recent CMS initiatives to reduce fraud
and abuse in the home health benefit, we interviewed knowledgeable CMS
officials and reviewed documentation regarding the identified
initiatives. We also conducted site visits to the CMS contractors to
learn about their involvement in CMS's recent initiatives.
We conducted our work from July 2007 through February 2009 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
appropriate, sufficient evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Results in Brief:
We identified seven states--California, Florida, Louisiana, Nevada,
Oklahoma, Texas, and Utah--as experiencing the highest Medicare home
health spending or utilization growth from 2002 through 2006. These
seven states were among the three highest in one or more of the four
spending and utilization indicators we examined using Medicare claims
data. Two of the seven states--Florida and Texas--ranked in the top
three on three of the four indicators. Texas, Florida, and Nevada--the
states with the highest percentage growth in Medicare home health
spending from 2002 to 2006--had more than double the national spending
growth, and Texas's increase in spending was more than three times the
national growth rate.
Upcoding--overstating the severity of a beneficiary's condition--by
HHAs and other fraudulent and abusive practices contributed to Medicare
home health spending and utilization. For instance, a CMS contractor
found that only 9 percent of claims were properly coded for 670 Houston
beneficiaries who had the most severe clinical rating and who were
served by potentially fraudulent HHAs. In addition, court cases and OIG
actions illustrated how other fraudulent and abusive practices,
including payments to physicians for referrals, payments by HHAs to
beneficiaries for use of their Medicare identification numbers, and
billing for services not rendered, contributed to spending and
utilization. Stakeholders also identified these practices as common
types of home health fraud and abuse, although some stakeholders
acknowledged that they were difficult to prove.
Inadequate administration of the Medicare home health benefit leaves
the benefit vulnerable to improper payments. Although CMS policy
charges its contractors, known as Regional Home Health Intermediaries
(RHHI), with the responsibility of screening applications from
prospective Medicare HHAs, CMS does not require its contractors to
verify the criminal history of persons named on the application. CMS
regulations require that HHAs undergo revalidation--which requires
providers to resubmit enrollment information for reverification--at
least once every 5 years. However, HHAs are not routinely subjected to
revalidation. CMS also generally does not include physicians, who are
in a position to detect certain types of improper billing, in the
agency's efforts to detect improper payments. For example, CMS does not
routinely provide physicians authorizing home health care with
information that would enable them to detect whether an HHA was billing
for unauthorized services. Furthermore, current CMS regulations provide
for the removal of HHAs or HHA officials from Medicare for just one
narrowly defined type of abusive billing--billing for services that
could not have been rendered.
In recent CMS and contractor initiatives, CMS learned that revalidation
and targeted enforcement efforts adapted to local billing practices
show the potential to reduce home health fraud and abuse. For example,
beginning in late 2007, CMS initiated a demonstration project requiring
all HHAs in Houston and the greater Los Angeles area to undergo
revalidation by resubmitting the CMS enrollment application for
screening. Those HHAs that failed to resubmit their application had
their billing privileges revoked. As of October 2008, 37 HHAs--out of
approximately 845, which billed for approximately $6.1 million in
fiscal year 2007--had their billing privileges revoked as part of the
demonstration for failure to resubmit their information for
revalidation. A contractor's efforts in Houston and Miami also showed
the potential to save money by adapting to local patterns of fraud and
abuse. For instance, in Miami, the contractor worked with physicians to
identify HHA overpayments in excess of $9 million.
To help reduce improper payments to Medicare HHAs, we are recommending
that the Administrator of CMS take four actions. The recommended
actions will enable CMS to more effectively screen HHAs and HHA
officials participating in the Medicare program, more effectively
partner with physicians to identify potentially fraudulent and abusive
activities, and more effectively sanction providers engaging in
improper billing practices.
In comments on a draft of this report, CMS stated it would consider two
of our four recommendations--to amend regulations to expand the types
of improper billing practices that are grounds for revocation of
billing privileges and to provide physicians who certify or recertify
plans of care with a statement of services received by beneficiaries.
CMS provided comments on, but neither agreed nor disagreed with our
other two recommendations. In addition to its comments on our
recommendations, CMS highlighted its recent initiatives to address
improper payments to HHAs, but also noted that resource constraints
prevented contractors from engaging in certain activities discussed in
our report. CMS also stated that the report only briefly mentions
Certificates of Need (CON) requirements that are in place in some
states to control health care capacity increases, which CMS believes
could stem the increase of HHAs in high vulnerability areas. However,
it was beyond the scope of this report to evaluate whether CMS's
resources were adequate to conduct these activities and to assess the
impact of CON requirements, which states impose. CMS also provided
comments pertaining to specific sections of the report, and we
incorporated these comments where appropriate.
Background:
Medicare requires that covered services be reasonable and medically
necessary.[Footnote 7] To qualify for home health care, Medicare
beneficiaries must (1) be homebound;[Footnote 8] (2) need skilled
nursing services on an intermittent basis,[Footnote 9] or physical or
speech therapy, or have a continuing need for occupational therapy; (3)
be under the care of a physician; and (4) be receiving services under a
plan of care established and periodically reviewed by a physician.
Beneficiaries who qualify for home health care may also receive medical
social services and home health aide services if these services are
part of the beneficiary's plan of care.
HHA Requirements and Payments:
An HHA becomes a Medicare-certified provider by meeting a series of
requirements. First, the HHA must submit an enrollment application for
screening by a Medicare contractor. The enrollment application includes
information about key officials,[Footnote 10] operating capital, and
practice location. The Medicare contractor reviews the application and,
if the application meets the standards, recommends approval to the
HHA's state survey agency and CMS. Second, a state survey agency
reviews the HHA to determine if the HHA is compliant with the federal
conditions of participation, or an approved accrediting organization
can accredit the HHA. The conditions of participation for HHAs include
requirements concerning organizational structure, administration,
patient rights, medical supervision, and patient assessment. The HHA
must also meet the statutory and regulatory requirements in the state
in which it is located, which may include licensure requirements or
approval under a CON.[Footnote 11] Third, if the HHA passes the state
survey or receives accreditation, the HHA must sign a provider
agreement with CMS. If the provider agreement is accepted by CMS, the
HHA is enrolled and obtains Medicare billing privileges. To maintain
billing privileges, an HHA must revalidate its enrollment information
every 5 years by resubmitting and recertifying the accuracy of its
enrollment information.[Footnote 12]
HHAs are paid using a prospective payment system (PPS) for 60 days of
care, called an episode. The amount of payment is based on an
assessment of the patient's needs at the beginning of the episode. The
payment for each beneficiary is based on the national average cost of
home health care services, adjusted by the beneficiary's categorization
into a payment group and the costliness of patients in each payment
group relative to the average payment. Classification into a payment
group is based on the severity of the beneficiary's condition along
three domains--clinical, functional, and service use.[Footnote 13] HHAs
receive an up-front payment for each episode, based on submission of a
Request for Anticipated Payment (RAP), which is 50 or 60 percent of the
expected total payment.[Footnote 14] The HHA receives the balance of
the payment after the episode is complete. Special payment adjustments
exist for HHAs with beneficiaries who have few visits during an episode
or who have partial episodes, and for HHAs with outlier beneficiaries.
CMS significantly refined the home health PPS effective January 1,
2008.[Footnote 15]
CMS Contractor Roles and Responsibilities in Home Health:
As of November 2008, CMS contracted with three Regional Home Health
Intermediaries (RHHI) to process and pay home health claims.[Footnote
16] In processing and paying claims, RHHIs are responsible for
minimizing improper payments. The RHHIs also are responsible for
screening HHA enrollment applications and making recommendations to CMS
and state survey agencies about whether the applications should be
approved.
As of November 2008, CMS contracted with four Program Safeguard
Contractors (PSC) that are responsible for preventing, detecting, and
deterring fraud in the Medicare home health benefit through benefit
integrity investigations and referrals to law enforcement.[Footnote 17]
PSCs coordinate their activities with the RHHI responsible for claims
processing in their jurisdiction. PSCs also work with the OIG and other
law enforcement organizations to pursue criminal or civil penalties.
Specific activities undertaken by PSCs to identify and prevent fraud
and abuse include analysis of claims data to identify improper billing
that may indicate fraud or abuse and on-site visits to beneficiaries
and providers.
Medical review, performed either before or after a claim is approved
for payment, is one way that RHHIs and PSCs ensure that claims are
being paid correctly.[Footnote 18] Medical review involves obtaining
HHA documentation, such as the beneficiary's plan of care and medical
records, to determine whether the beneficiary meets Medicare's coverage
criteria for home health services, whether the care provided was
reasonable and necessary, and whether the claim was coded properly.
Actions in Response to Improper Billing:
CMS and its contractors can take a series of actions against HHAs with
a pattern of improper billing or that are suspected of engaging in
fraud or abuse. Initially, an RHHI can educate an HHA about proper
billing if the HHA's billing pattern appears to be aberrant. RHHIs can
flag a percentage of the HHA's submitted claims for medical review if
the HHA's billing pattern appears aberrant or there is knowledge of
abuse in the service area. RHHIs can also require the HHA to return any
money it received in excess of the proper amount (called an
overpayment) or hold payment for current claims while an overpayment is
calculated if there is reason to believe that the HHA has engaged in
fraud or has been overpaid in the past (called a payment suspension).
Finally, if CMS or its contractors determine that an HHA billed
Medicare for a service that could not have been provided on the date
claimed, CMS can revoke the HHA's Medicare billing privileges and it
would be barred from re-enrolling in the Medicare program for 1 to 3
years.
If an HHA is suspected of engaging in fraud or other type of unlawful
activity, PSCs must refer the HHA to the OIG. Under the Social Security
Act, the OIG may take certain administrative actions against
individuals and HHAs, including those found to have submitted false or
fraudulent claims. The OIG may impose sanctions including the
assessment of civil monetary penalties (CMP) and exclusion of an
individual or organization from participation in federal health
programs for a period of time. The Social Security Act also provides
for criminal penalties for certain activities, including certain false
statements and kickbacks, which are payments to physicians or others to
induce referrals or in return for referrals.[Footnote 19] The OIG and
PSCs may also refer cases to other law enforcement entities such as the
Federal Bureau of Investigation or state law enforcement agencies. Upon
investigation, these entities can decide whether to pursue civil or
criminal prosecution.
Past GAO Work:
We have reported for more than two decades on program weaknesses in
Medicare's home health benefit. Previous reports attributed improper
billing in Medicare home health to:
* vagueness in the coverage criteria, particularly uncertainty over the
exact meaning of terms such as homebound and intermittent
care;[Footnote 20]
* insufficient physician involvement and inadequate monitoring of
beneficiary status;[Footnote 21]
* insufficient information being submitted with the claims upon which
to base a coverage decision;[Footnote 22] and:
* the difficulty RHHIs have in assessing, from paper review alone,
whether a beneficiary meets the eligibility criteria, whether the
services received are appropriate given the beneficiary's current
condition, and whether the beneficiary is actually receiving the
services billed to Medicare.[Footnote 23]
Seven States Identified as Experiencing Highest Medicare Home Health
Spending or Utilization Growth from 2002 through 2006:
Medicare home health spending or utilization growth from 2002 through
2006 was highest in California, Florida, Louisiana, Nevada, Oklahoma,
Texas, and Utah. These states ranked among the top three in at least
one of four spending and utilization indicators. Two states--Florida
and Texas--ranked in the top three on three of the four indicators.
States with the highest percentage growth in Medicare home health
spending from 2002 through 2006 were Texas (144 percent), Florida (90
percent), and Nevada (88 percent). All three states had at least double
the national growth rate of 44 percent, and Texas's increase in
spending was more than three times the national growth rate. (See
figure 1.) (See appendix I for the growth rates for all individual
states.)
Figure 1: States with the Highest Percentage Growth in Medicare Home
Health Spending from 2002 through 2006:
[Refer to PDF for image: vertical bar graph]
State: Texas;
Growth in spending: 144%.
State: Florida;
Growth in spending: 90%.
State: Nevada;
Growth in spending: 88%.
State: United States overall;
Growth in spending: 44%.
Source: GAO analysis of CMS data.
[End of figure]
Texas (57 percent), Oklahoma (30 percent), and Florida (28 percent) had
the highest percentage growth in the percentage of Medicare
beneficiaries who used home health services from 2002 through 2006. The
U.S. percentage growth was 12 percent. (See figure 2.) (See appendix I
for the percentage growth in percentage of all Medicare beneficiaries
who used home health services, for all individual states.)
Figure 2: States with the Highest Percentage Growth in the Percentage
of Beneficiaries Who Used Home Health Services from 2002 through 2006:
[Refer to PDF for image: vertical bar graph]
State: Texas;
Growth in beneficiaries: 57%.
State: Oklahoma;
Growth in beneficiaries: 30%.
State: Florida;
Growth in beneficiaries: 28%.
State: United States overall;
Growth in beneficiaries: 12%.
Source: GAO analysis of CMS data.
[End of figure]
Louisiana (63 percent), Texas (54 percent), and Nevada (46 percent) had
the highest percentage growth in the number of HHAs from 2002 through
2006. In comparison, the national growth rate was 24 percent. (See
figure 3.) (See appendix I for the percentage growth in number of HHAs
for all individual states.)
Figure 3: States with the Highest Percentage Growth in the Number of
HHAs from 2002 through 2006:
[Refer to PDF for image: vertical bar graph]
State: Louisiana;
Growth in number of HHAs: 63%.
State: Texas;
Growth in number of HHAs: 54%.
State: Nevada;
Growth in number of HHAs: 46%.
State: United States overall;
Growth in number of HHAs: 24%.
Source: GAO analysis of CMS data.
[End of figure]
States with the highest percentage of home health episodes that were
outliers in 2006 were Florida (12 percent), Utah (11 percent), and
California (7 percent). The percentage of outlier cases nationwide was
4 percent. (See figure 4.) (See appendix I for the percentage of
outlier cases for all individual states.)
Figure 4: States with the Highest Percentage of Outlier Cases in 2006:
[Refer to PDF for image: vertical bar graph]
State: Florida;
Outlier cases: 12%.
State: Utah;
Outlier cases: 11%.
State: California;
Outlier cases: 7%.
State: United States overall;
Outlier cases: 4%.
Source: GAO analysis of CMS data.
[End of figure]
Upcoding and Other Fraudulent and Abusive Practices Contributed to Home
Health Spending and Utilization:
Upcoding, or overstating the severity of a beneficiary's condition, and
other fraudulent and abusive practices were problems in some areas and
contributed to Medicare home health spending and utilization. Data
analyses that we, CMS, and one PSC conducted showed that upcoding and
billing for unnecessary care contributed to spending and utilization.
[Footnote 24] Stakeholders also told us that common types of upcoding
and billing for unnecessary care in home health were billing for
outlier cases when this level of care was not required, billing for
beneficiaries who were not homebound, and billing for therapy visits
that may have been medically unnecessary.[Footnote 25] Other fraudulent
and abusive practices, including kickbacks, payments from HHAs to
beneficiaries for use of their Medicare identification numbers, and
billing for services not rendered, also contributed to Medicare home
health spending and utilization.[Footnote 26] Court cases and OIG
actions illustrate how these practices contributed to improper HHA
spending and utilization. In addition, stakeholders identified these
practices as common types of home health fraud and abuse, although some
stakeholders acknowledged that they were difficult to prove.
Medicare home health spending and utilization was due in part to
upcoding Medicare claims by billing for outlier cases that qualified
for additional payments, although beneficiaries did not require this
level of care. For example, in Miami-Dade County, a pattern of an
unusually high number of outlier cases in 2007 indicated fraudulent
upcoding of Medicare home health claims. According to one PSC's
analysis, in 2007, 57.5 percent of home health cases in Miami-Dade
County were outlier cases, compared with 0.4 percent in Chicago, 8.6
percent in Dallas, 2.2 percent in Houston, and 2.2 percent in Atlanta.
[Footnote 27] The PSC's analysis showed that Miami-Dade HHAs received
more than $550 million in outlier payments in 2007--an amount more than
four times greater than the combined total paid to HHAs in Chicago,
Dallas, Houston, and Atlanta, even though there were more people over
age 65 in each of the other four metropolitan areas.
The PSC also reported in its written analysis to CMS that many Miami-
Dade County HHAs provided daily skilled nursing visits to administer
insulin injections for diabetic beneficiaries,[Footnote 28] which
resulted in higher costs per beneficiary and outlier payments, although
beneficiaries may not have required this level of care.[Footnote 29] In
a November 2007 report to CMS, this PSC stated that Miami-Dade County
beneficiaries and their caregivers had been coached in how to respond
to investigators verifying whether the skilled nursing services for
insulin injections were necessary. For example, according to the PSC
representatives, some beneficiaries said that they were unable to
administer their own injection due to poor vision, yet they were able
to read the investigators' business cards.
Our study of 2006 Medicare home health data from U.S. counties with 100
or more home health episodes confirmed the PSC's analysis by indicating
that, compared with the rest of the country, a large percentage of home
health cases in Miami-Dade County involved diabetic beneficiaries.
Nearly 50 percent of all Medicare beneficiaries in Miami-Dade County
who received home health services in 2006 had a diagnosis of diabetes.
The average for all counties included in the analysis, about 16
percent, was significantly lower. Total Medicare payments for diabetes
episodes in Miami-Dade County exceeded $221 million in 2006. This
figure was almost double the diabetes-related payments in Los Angeles
County, which had nearly twice as many Medicare beneficiaries using
home health services as Miami. The average diabetes payment among all
counties with at least one beneficiary who had a diabetes home health
episode was less than $1 million.
In addition to fraudulent and abusive practices involving outlier
payments, stakeholders reported that before CMS amended its payment
methodology in 2008, some HHAs billed for 10 or more therapy visits in
order to qualify for additional Medicare payments, even though these
visits may not have been medically necessary.[Footnote 30] CMS
concluded that the 10-therapy-visit threshold, established during the
implementation of the PPS in 2000, distorted service delivery patterns
by creating financial incentives for HHAs to bill for 10 therapy
visits. CMS analysis showed that, prior to implementation of the PPS,
the highest concentration of therapy visits per episode ranged from 5
to 7 visits. After implementation of the PPS, the highest concentration
of therapy visits grew to 10 to 13 visits per episode.
Some stakeholders reported another type of fraud and abuse in which
HHAs submitted claims for beneficiaries who were not homebound or who
required fewer services than were provided. For example, several
Houston HHAs had an unusually high percentage of patients with the most
severe clinical rating.[Footnote 31] One PSC interviewed 670 Houston
beneficiaries who had the most severe clinical rating and who were
patients of HHAs identified by the PSC as having aberrant billing
patterns. The PSC found 91 percent of claims for these beneficiaries to
be in error. Nearly 50 percent of the beneficiaries were not homebound
and therefore were not eligible to receive any Medicare home health
services. The investigators also found that while 39 percent of the
beneficiaries they interviewed were eligible for the benefit, their
clinical severity had been exaggerated. The PSC concluded that only 9
percent of claims for the 670 beneficiaries were properly coded.
[Footnote 32] In addition, the PSC found that other home health
beneficiaries it interviewed were not homebound; for instance, some
were mowing their lawns when investigators came to interview them.
In addition, court cases and OIG actions illustrate how other
fraudulent and abusive practices such as kickbacks, payments by HHAs to
beneficiaries for use of their Medicare identification numbers, and
billing for services not rendered contributed to Medicare home health
spending and utilization. For example, in October 2004, a registered
nurse who owned the two largest HHAs in California pled guilty to
defrauding Medicare of $40 million by billing for services not rendered
or medically unnecessary; falsifying medical records to support
fraudulent claims; and paying kickbacks.[Footnote 33] In addition, a
Pennsylvania HHA agreed to pay $300,000 and enter into a settlement
agreement with the OIG to resolve its liability in May 2005 for alleged
kickbacks. The HHA allegedly paid Pennsylvania and Florida physicians
kickbacks in the form of loans, consulting fees, and rental space
payments to induce them to refer beneficiaries requiring home health
services or durable medical equipment, or both, paid for by Medicare.
(See table 1 for examples of court cases and OIG actions.)
Table 1: Examples of Medicare Home Health Court Cases and OIG Actions:
Case/OIG action, state, date: Court Case Florida March 2008;
Description: Three defendants who owned four Miami health care
corporations were convicted of defrauding Medicare of more than $14
million by, among other things, providing unnecessary medical services,
home health services, and durable medical equipment. The owners were
also found guilty of receiving kickbacks in exchange for beneficiary
referrals.
Case/OIG action, state, date: OIG Settlement Florida March 2008;
Description: A Florida HHA agreed to pay $178,000 to settle a case in
which it was alleged that the HHA paid kickbacks for beneficiary
referrals.
Case/OIG action, state, date: Court Case Louisiana December 2007;
Description: The owner of a Louisiana HHA was found guilty of
defrauding Medicare over a 5-year period and was ordered to pay more
than $4.6 million in damages and penalties. Among other charges, the
owner was convicted of making illegal payments to physicians for
referrals. The physicians were members of the company's advisory board.
Case/OIG action, state, date: OIG Settlement Texas December 2007;
Description: A Texas HHA agreed to pay $86,327 to settle a case in
which it was alleged that the HHA paid kickbacks. The OIG alleged that
the HHA supplied free nursing and community development services to
providers in order to induce them to refer patients for home health
services.
Case/OIG action, state, date: Court Case California May 2006;
Description: A California HHA owner was sentenced to 2 years in prison
and ordered to pay Medicare $600,000 in restitution for Medicare fraud.
The HHA owner pled guilty to, among other things, paying kickbacks to
physicians to provide unnecessary services, billing Medicare for home
health services that were medically unnecessary or not performed as
claimed, and falsifying medical records to conceal the fraud.
Case/OIG action, state, date: OIG Settlement Pennsylvania May 2005;
Description: A Pennsylvania HHA agreed to pay $300,000 to settle a case
in which it was alleged that the HHA had paid kickbacks under Medicare.
The OIG alleged that from February 1997 through May 1998, the HHA made
payments in the form of loans, consulting fees, and monthly space
rental payments to physicians in Pennsylvania and Florida to induce
their referral of Medicare beneficiaries.
Case/OIG action, state, date: OIG Settlement Florida February 2005;
Description: A nationwide HHA agreed to pay $130,000 to resolve its
liability for kickbacks allegedly paid by one of its franchisees. The
OIG alleged that the franchisee paid commissions to nonemployees for
each patient referred. The amounts of the commissions were allegedly
based on the type of services utilized by the referred patients.
Case/OIG action, state, date: Court Case California October 2004;
Description: The owner of the two largest HHAs in California pled
guilty to defrauding Medicare of approximately $40 million and filing
false tax returns to conceal the illegal income. Among other things,
the HHAs were alleged to have made illegal payments to marketers,
physicians, patients, and nurses and then to have billed Medicare for
services that were not medically necessary or not performed.
Source: GAO analysis of information from U.S. Attorneys' Offices and
the HHS OIG.
Note: Data are from the sources' respective Web sites.
[End of table]
Stakeholders, including industry representatives, also identified
kickbacks, payments by HHAs to beneficiaries for use of their Medicare
identification numbers, and billing for services not rendered as common
types of home health fraud and abuse. For example, a CMS official and
representatives from an RHHI, PSCs, and HHA associations told us that
some HHAs offered physicians kickbacks. For instance, representatives
from home health associations said that physician kickbacks were so
common in some parts of Florida that many physicians expected payment
for referrals and inquired how much the HHAs paid for referrals.
Stakeholders also told us that, based on their experience, some HHAs
hired physicians to serve as medical directors to disguise payments for
referrals by those physicians and that some HHAs had as many as 20 or
30 medical directors.[Footnote 34]
In addition, stakeholders told us that some HHAs offered kickbacks to
nurses, hospital discharge planners, and assisted living facility
managers for beneficiary referrals. For example, a CMS official and a
PSC representative told us that when some nurses were hired by a new
HHA employer, the nurses moved their patients from their former HHA
employer to the new one and received bonuses according to the number of
beneficiaries they brought with them. The PSC representative said that
beneficiaries were often very loyal to their nurses and often did not
realize they were being shifted among HHAs. In another practice
reported by a Florida home health association representative, HHAs
allegedly paid managers at senior housing projects and assisted living
facilities above-market rent in exchange for beneficiary referrals.
According to stakeholders, HHAs that billed Medicare for services that
were not rendered may have paid beneficiaries for use of their Medicare
identification numbers. Stakeholders said that HHAs offered
beneficiaries payments in the form of cash or other goods, such as
cigarettes or alcohol. In addition, a CMS official told us that some
Miami beneficiaries reported that HHA nurses had given them insulin
injections that investigators suspected they did not actually receive.
This official also reported that Miami HHAs have submitted claims for
visits that were probably not provided, such as claims for visits that
allegedly occurred when hurricanes were in the area.
Stakeholders told us that kickbacks, payments to beneficiaries for
illegal use of their Medicare identification numbers, and billing for
services not rendered were difficult to prove. For example, one PSC
representative noted that in the past, the PSC could have relied on
either beneficiaries or physicians to testify about the HHA activity
and thereby to act as a safeguard against fraud and abuse, but with all
parties involved in the practices, this type of cooperation is less
likely. An official from the OIG's Miami Office of Investigations
echoed these concerns, stating that some South Florida beneficiaries
purportedly received more income in illegal HHA payments than from
their monthly disability checks and therefore were less likely to be
truthful about HHA fraudulent and abusive practices.
Inadequate Screening, Monitoring, Investigation, and Enforcement
Procedures Leave Home Health Benefit Vulnerable to Improper Payments:
Inadequate administration of the Medicare home health benefit leaves
the benefit vulnerable to improper payments. Although CMS policy
charges RHHIs with the responsibility of screening applications from
prospective Medicare HHAs, CMS does not require RHHIs to verify the
criminal history of persons named on the application. Furthermore,
while CMS regulations require that HHAs undergo revalidation at least
once every 5 years, HHAs are not routinely subjected to revalidation.
CMS generally does not include physicians, who are in a position to
detect certain types of improper billing, in CMS efforts to detect
improper payments. CMS does not routinely provide physicians
authorizing home health care with the information needed to detect
billing for unauthorized services.
Inadequate Screening May Allow Problem Providers to Enter Medicare:
Gaps in screening potential and current HHAs may allow problem
providers to enter and remain in the Medicare program. Although CMS
policy charges RHHIs with the responsibility of screening applications
from prospective Medicare HHAs, CMS does not require RHHIs to verify
the criminal history of persons named on the initial enrollment
application.[Footnote 35] An application is subject to denial if an
owner has been convicted of certain types of felonies within the past
10 years or if the application contains false or misleading
information.[Footnote 36] Because RHHIs do not verify the criminal
history responses, it is impossible for them to identify false or
misleading information or owners who have been convicted of a felony
within the past 10 years.
CMS regulations require that HHAs resubmit and recertify the accuracy
of their enrollment information every 5 years,[Footnote 37] but HHAs
are not routinely subjected to this revalidation. CMS adopted the
revalidation requirement in 2006 as a systematic means of collecting
updated information about the nation's Medicare providers and
reexamining their enrollment eligibility. Revalidation requires that
the HHA submit a new enrollment application and any supporting
documentation, and the RHHIs to validate the information provided and,
in some cases, to make an on-site inspection of the HHA. In the
preamble to the rule establishing the revalidation requirement, CMS
noted that revalidation will "ensure that Medicare beneficiaries are
receiving services furnished only by legitimate providers and
suppliers, and strengthen [CMS's] ability to protect the Medicare Trust
Funds."[Footnote 38]
Gaps in Monitoring Claims Make It Easy for Improper Payments to Occur:
CMS generally does not include physicians, who are in a position to
detect certain types of improper billing, in CMS efforts to detect
improper payments. CMS does not routinely provide physicians
authorizing home health care with information that would allow the
physicians to detect billing for unauthorized services. Physicians must
authorize the type and frequency of home health visits but do not
receive verification of the visits included in the HHA's claim to
ensure that those claimed were consistent with those authorized.
Stakeholders reported to us numerous instances of HHAs billing for
services unauthorized by the physician.
RHHIs are responsible for monitoring home health claims, but
limitations in the number of medical reviews they conduct leave the
benefit vulnerable to improper payments, including payments resulting
from fraud and abuse. Two of the three RHHIs told us they are limited
by CMS budget constraints in the number of medical reviews they can
conduct. In fiscal year 2007, 0.5 percent of the more than 8.7 million
HHA claims processed were subjected to prepayment medical review by
RHHIs. The RHHIs told us they primarily focus on those claims submitted
by HHAs whose billing patterns exhibit differences from their peers on
such measures as average number of nursing visits per episode, episodes
per beneficiary, and cost per episode. The RHHIs reported to us that in
fiscal year 2007 they denied, in whole or in part, 41 percent of nearly
44,000 claims reviewed prior to payment and 24 percent of the total
submitted charges, for $23 million in savings.
RHHIs rarely conduct postpayment medical reviews to recover funds
previously paid in error, even when an HHA is identified as billing
improperly through prepayment review. The RHHIs reported to us that in
fiscal year 2007 they conducted postpayment medical review on 640 of
the over 8.7 million claims processed, recouping $486,000 in
overpayments. According to a CMS official, the emphasis on prepayment
review is to avoid pursuing payments after they have been made.
Challenges in Investigation and Enforcement Leave Home Health Benefit
Vulnerable to Improper Payments:
Investigation and enforcement challenges restrict the number of HHAs
that are investigated and sanctioned for improper billing.
Substantiating improper payments for the home health benefit is time
consuming and labor intensive. PSCs identify HHAs to investigate based
on referrals from the RHHIs, other contractors, law enforcement
entities, or from data analysis. Their investigations can be based
either on claims already paid or on RAP submissions. For instance, one
PSC noted that evidence to substantiate medically unnecessary services
or possible upcoding is best gathered as close to the date the
beneficiary was assessed as possible. This requires coordination
between the RHHI and the PSC so that the PSC can assess the
beneficiaries, in person, within days of submission of the RAP to the
RHHI. Once improper billing is established, the PSC must also determine
the amount of improper payments the HHA has already received.[Footnote
39] One PSC told us that a nurse could conduct medical review of about
four home health claims per week due to the amount of information that
can comprise a 60-day episode. Once the PSC has gathered sufficient
evidence, it may refer the HHA to the OIG. If the OIG does not accept
the referral within a certain period of time, the PSC may present the
case to other law enforcement agencies for further investigation.
Current CMS regulations provide for the removal of providers or HHA
officials from the program for abuse of billing privileges in limited
circumstances. Those removed may not reenroll for a minimum of 1 year
and a maximum of 3 years.[Footnote 40] Prior to August 26, 2008, the
regulations provided for CMS to revoke a provider's billing privileges,
but only for reasons other than improper billing, such as conviction
for certain felonies or submission of false or misleading information
on the enrollment application. Effective August 26, 2008, CMS may also
revoke a provider's billing privileges for one narrowly defined type of
abusive billing--submission of claims for services that could not have
been furnished on the date claimed. This would include claims for
services provided to deceased beneficiaries and claims for services
when the physician or beneficiary was not in the state or not in the
country when services were furnished.[Footnote 41] Discussing the new
provision, CMS stated that the expanded regulation was not intended to
be used for isolated occurrences or accidental billing errors, but was
directed at those "providers and suppliers who are engaging in a
pattern of improper billing" and further explained that it would revoke
billing privileges only when there were at least three instances of
abusive billing. CMS also stated that it might propose other provisions
related to revocation of provider and supplier billing privileges in
the future.[Footnote 42]
While the OIG may remove providers from the Medicare program for
fraudulent billing, the OIG has rarely used its authority to exclude in
the absence of conviction for fraud. If an HHA or individual is
convicted of a crime related to the delivery of an item or service
under Medicare, federal law requires the OIG to exclude them from
participating in any federal health care program. The OIG also has the
discretionary authority to exclude HHAs and individuals based on the
OIG's determination that the HHA paid kickbacks, submitted claims for
services that were not provided as claimed or were unnecessary, or
submitted false or fraudulent claims. HHAs that furnish services in
excess of the needs of patients or who make false representations of
material facts in support of a claim may also be excluded under the
OIG's discretionary authority. The OIG has rarely used its discretion
to exclude on the basis of fraudulent billing in the absence of a
conviction for fraud. In calendar year 2007, less than half of 1
percent of all individual exclusions were for submitting false claims,
submitting claims for services that were not medically necessary, or
making false representations of material facts on a claim or
documentation used to support a claim.[Footnote 43] Rather than exclude
on the basis of an OIG determination or refer these cases for
prosecution,[Footnote 44] the OIG may impose a CMP or seek a
settlement. Under a settlement agreement, the provider or entity
consents to the obligations specified by the OIG in exchange for the
OIG's agreement not to seek exclusion.
Revalidation and Targeted Local Efforts Show Potential to Reduce Home
Health Fraud and Abuse:
In recent CMS and contractor initiatives, CMS learned that revalidation
and targeted efforts adapted to local circumstances show the potential
to reduce home health fraud and abuse. For example, as part of a 2-year
demonstration, CMS is requiring all HHAs in Houston and the greater Los
Angeles area to undergo revalidation at least once during the
demonstration. As of October 2008, 37 HHAs (out of approximately 845)
in the areas have had their billing privileges revoked for failure to
resubmit their information. These 37 HHAs billed for approximately $6.1
million in fiscal year 2007. PSC efforts in Houston and Miami have also
shown the potential to save Medicare money. The PSC needed to adapt its
strategies to the different identified fraudulent and abusive practices
in the two communities. For instance, in Miami the PSC worked with
physicians to identify HHA overpayments in excess of $9 million.
Revalidation Can Help Ensure Legitimacy of Home Health Providers:
An ongoing CMS demonstration project shows that revalidation may be an
effective method of ensuring the legitimacy of HHAs. CMS is currently
conducting a 2-year demonstration that, in part, requires HHAs to
undergo revalidation at least once during the demonstration. The
demonstration, which began in late 2007, is being conducted in two
areas with a history of fraudulent home health activity--greater Los
Angeles and Houston.[Footnote 45] HHAs that fail to resubmit their
enrollment application within 60 days of receiving notice have their
billing privileges revoked. As of October 2008, 37 HHAs out of
approximately 845 had their billing privileges revoked as part of the
demonstration. These 37 HHAs billed for approximately $6.1 million in
fiscal year 2007. According to a CMS official, all of these agencies
failed to resubmit the enrollment application.
Other parts of the demonstration will give CMS the ability to evaluate
other actions aimed at reducing and deterring fraudulent or abusive HHA
billing. In addition to revalidation, the demonstration requires state
survey agencies to conduct surveys of any HHA that underwent an
ownership change within the previous 2 years. RHHIs will also conduct a
site visit to all HHAs to verify that the HHA is located at the address
identified on the application. Billing privileges will be revoked for
HHAs that fail to report an ownership or address change; have key
officials with a felony conviction within the prior 10 years as
determined by a background check; or no longer meet all Medicare
conditions of participation. As of May 2008, the RHHIs responsible for
California and Texas had begun conducting site visits to HHAs to verify
the address information on the enrollment applications; state surveys
of HHAs with an ownership change had not begun.
Targeted Local Efforts Show Potential to Deter Fraud and Abuse and Save
Medicare Dollars:
One PSC's recent efforts to detect and deter home health fraud and
abuse in two areas show that targeted efforts based on local fraudulent
and abusive practices can deter these activities and save the Medicare
program money. In Houston, the PSC targeted those HHAs that billed more
than 50 percent of their claims at the most severe clinical level,
because the PSC's experience showed that such billing patterns were
indicative of substantial upcoding. To identify potentially fraudulent
claims, the PSC monitored the submission of RAPs for the targeted HHAs.
Once enough beneficiaries were identified, the PSC sent teams of
investigators, including nurses, to Houston for on-site interviews with
beneficiaries to assess their health condition, including whether they
were indeed homebound, and then compared these results with the
information submitted by the HHA. Once an HHA reached a threshold
percentage of submitting upcoded claims or claims for beneficiaries who
were not homebound, the PSC worked with CMS to cancel the HHA's RAP
privileges, meaning that the agency would only be paid at the end of
the episode following the submission of a valid claim. According to the
PSC officials, the cancellation of RAP privileges was particularly
effective in Houston because these HHAs relied on the RAP payments to
cover their expenses. Medicare payments for claims at the most severe
clinical level for 24 targeted HHAs decreased from nearly $1.9 million
in January 2007 to $34,461 in September 2007.
In Miami, the PSC identified a different practice that could not be
addressed through the cancellation of RAP privileges; instead, the PSC
worked with physicians to identify overpayments. This practice involved
the submission of high numbers of outlier claims for beneficiaries with
diabetes. The PSC told us that canceling RAP privileges would not have
been appropriate in Miami because outlier payments are determined at
the end of the episode; therefore, the HHAs in Miami were getting only
a small amount of the total episode payment from the up-front payment
that is based on the RAP submission. Also, the sheer volume of claims
that nurses would have had to review in Miami was prohibitive. Instead
of focusing on the suppression of RAP privileges, the PSC addressed the
outlier problems in Miami through collaboration with referring
physicians. The PSC sent letters to physicians that had referred
beneficiaries whose care resulted in high HHA reimbursements from
outlier claims with the names of the Medicare beneficiaries they had
referred and the amount of payment the HHAs had received based on those
referrals. According to the PSC officials, some of the referring
physicians became concerned about the amount of money the HHAs had
received and collaborated with the PSC. Some of the physicians
indicated, for instance, that their signature had been forged or that
they did not realize the amount of care they were authorizing. As a
result of interviews with 31 of the physicians who responded to the
letters, nearly 950 plans of care were disavowed by the physicians,
resulting in overpayment assessments against HHAs in excess of $9
million as of March 2008.
Despite the different strategies needed in Houston and Miami to address
the fraud and abuse concerns, the PSC found that city site visits,
which included beneficiary interviews, were necessary in both
locations. According to a PSC official, beneficiary interviews are
needed so that they have a basis on which to deny a claim. The official
noted that medical reviews that use only the medical records provided
by the HHA are limited because providers may know how to falsify
records so that they can pass a review. The PSC conducted 10 weeks of
site visits in Houston between March 2007 and February 2008, using
between 6 and 24 staff per city site visit, attempting 959 beneficiary
interviews and completing 670. In Miami, the PSC completed 118
beneficiary interviews during 6 week-long site visits between mid-
November 2007 and early March 2008 and 31 interviews with physicians
with high referral rates to targeted HHAs.
In October 2008, CMS announced new initiatives to further address
issues identified in Miami-Dade County. CMS officials from CMS's Miami
field office are conducting beneficiary interviews with beneficiaries
from HHAs with either a high percentage of outlier episodes or a high
dollar amount of outlier payments. The beneficiaries will be visited at
home to determine if they qualified for the services they received and
if they received all the services for which Medicare was billed.
Additionally, CMS is considering implementing a trigger in Miami-Dade
County that will flag an HHA for increased scrutiny when more than 5
percent of the HHA's claims are outliers. Beneficiaries from these HHAs
would be targeted for interviews and the HHA's claims would also be
targeted for pre-or post-payment medical review. According to CMS
officials, as of December 2008, 13 HHAs were subject to a 180-day
payment suspension based on CMS's examination of outlier data.
Conclusions:
Gaps in CMS's administration of the $12.9 billion Medicare home health
benefit have left the agency vulnerable to improper payments, including
payments for claims resulting from fraudulent and abusive practices.
While we have reported for more than two decades about the lack of
controls over the Medicare home health benefit, CMS's administration of
the benefit continues to be unable to prevent HHAs from billing for
services that are not medically necessary or that are not rendered.
The screening process RHHIs use for HHAs that have submitted
applications to participate in Medicare does not routinely include
verification of the criminal history of applicants. Without this
information, individuals and businesses that misrepresent their
criminal histories or have a history of relevant convictions, such as
for fraud, could be allowed to enter the Medicare program.
Physicians certifying home health plans of care are not currently given
the information needed for them to play a significant role in aiding
CMS efforts to reduce home health care fraud and abuse. Physicians lack
information about the care Medicare is billed for based on their
authorization. The PSC's experience in Miami showed that giving
physicians more information about the care provided a beneficiary led
to the identification of HHAs that were falsifying physician
authorizations or providing levels of care in excess of patient needs.
RHHI monitoring of home health claims relies on medical reviews, but
these reviews could be improved to more effectively recoup potential
overpayments. Currently, RHHIs focus medical review efforts on
prepayment reviews. However, when prepayment medical reviews identify
HHAs as billing improperly, only rarely do RHHIs perform postpayment
medical reviews to recoup potential overpayments:
CMS rarely removes those HHAs or key officials at HHAs that engage in a
pattern of abusive billing from Medicare. CMS recently issued
regulations authorizing the revocation of Medicare billing privileges
of providers engaging in one narrowly defined type of improper billing-
-billing for services that could not have been rendered. While this is
a step in the right direction, CMS has yet to address the removal of
HHAs or HHA officials engaging in other types of improper or abusive
billing.
Recent initiatives by CMS and PSCs show the potential of protecting
Medicare dollars with concerted efforts tailored to local conditions.
However, CMS has not taken advantage of opportunities to further
prevent and deter fraud and abuse as well as effectively sanction those
engaging in fraud and abuse. In the absence of greater prevention,
detection, and enforcement efforts, the Medicare home health benefit
will continue to be a ready target for fraud and abuse.
Recommendations for Executive Action:
To strengthen the controls on improper payments in the Medicare home
health benefit, we recommend that the Administrator of CMS take the
following four actions:
* Assess the feasibility of verifying the criminal history of all key
officials named on an HHA enrollment application.
* Provide physicians whose identification number was used to certify or
recertify a plan of care with a statement of services the HHA provided
to that beneficiary based on the physician's certification.
* Direct CMS contractors to conduct postpayment medical reviews on
claims submitted by HHAs with high rates of improper billing identified
through prepayment review.
* Amend current regulations to expand the types of improper billing
practices that are grounds for revocation of billing privileges.
Grounds for revocation could include a pattern of submitting claims
that are falsified, for persons who do not meet Medicare's coverage
criteria, or for services that are not medically necessary.
Agency Comments and Our Evaluation:
CMS reviewed a draft of this report and provided written comments,
which appear in appendix II.
In responding to our draft report, CMS stated it would consider two of
our four recommendations. CMS provided comments on, but neither agreed
nor disagreed, our other two recommendations. In considering our
recommendation that physicians who certify or recertify plans of care
be provided a statement of services received by beneficiaries, CMS
noted that this sort of physician cross-checking may not result in a
payment change on most claims since home health payments are calculated
on the basis of the number of days of care and the number of visits
rather than by the services provided. CMS suggested an alternative
approach in which it would target physician cross-checking for
beneficiaries who receive a large number of therapy visits and outlier
claims. While we believe that all physicians who certify or recertify
plans of care should be provided a statement of services, CMS's
alternative approach would be a reasonable way to begin to implement
this recommendation. CMS also stated that it would consider our
recommendation to amend regulations to expand the types of improper
billing practices that are grounds for revocation of billing
privileges.
CMS commented on, but neither agreed nor disagreed with our other two
recommendations. In response to our recommendation that CMS assess the
feasibility of verifying the adverse legal histories of key officials
named on enrollment applications, CMS stated that GAO's use of the term
"adverse legal histories" was too broad. We have changed this term in
our report to "criminal history." In response to our recommendation
that CMS direct its contractors to conduct postpayment medical reviews
on claims submitted by HHAs with high rates of improper billing, CMS
stated that contractors may already review these claims when they
conduct reviews for HHAs with high utilization. CMS also commented that
contractors must consider the costs and availability of resources when
they prioritize their work. While we agree that contractors must
prioritize their work, we believe that the claims submitted by HHAs
already identified as having high improper billing rates would have a
high probability of improper payments.
CMS highlighted its recent initiatives to address improper payments to
HHAs, noting that it has initiated new enrollment processes for
Medicare providers, such as denying enrollment to providers with
payment suspensions. It also commented that it has taken steps to
address improper outlier payments in Miami and developed a
demonstration project in California and Texas to address high-risk
services and providers. Our draft report discussed the projects in
Miami, California, and Texas and we added information about the new
enrollment procedures.
CMS noted that the report only briefly mentioned the CON requirement in
some states. CMS believes CON requirements could stem the increase of
HHAs in high vulnerability areas of the country. While this could be
the case, CON requirements are a function of state laws or regulations,
and therefore outside the scope of our report, which focused on CMS's
efforts to address improper payments.
In addition, CMS commented that resource constraints prevented
contractors from engaging in certain activities, such as conducting
criminal background checks on persons named on the HHA enrollment
applications. While some stakeholders told us that resource constraints
were an issue, it was beyond the scope of this report to evaluate
whether CMS's resources were adequate to conduct these activities or to
evaluate how CMS allocates its program integrity funds.
CMS suggested we add a paragraph on the nature and extent of CMS's
activities involving physicians. We did not include this paragraph,
which discussed several CMS initiatives involving ordering physicians.
These initiatives either were related to durable medical equipment,
which was outside our scope, or limited to the Miami area and already
discussed in the appropriate section of our report.
In response to our statement that CMS does not generally collect
information on the names and number of medical directors an HHA
employs, CMS stated that nearly every medical director qualifies as a
managing employee and information on managing employees is collected on
the enrollment application. We modified our statement to reflect that
the form does not ask HHAs to specify the names and number of medical
directors it employs. Therefore, CMS would have no way of knowing which
managing employees were medical directors and if all medical directors
had been named on the form.
CMS also requested that the report indicate that the OIG should more
robustly utilize its authority to exclude HHAs and impose monetary
penalties. We did not include these comments in our report since they
fall outside of our scope, which focuses on CMS's efforts to address
improper payments.
CMS also provided technical comments, which we incorporated as
appropriate.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
Administrator of CMS, committees, and others. The report also will be
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions
to this report are listed in appendix III.
Sincerely yours,
Signed by:
James C. Cosgrove:
Director, Health Care:
[End of section]
Appendix I: Medicare Home Health Spending and Utilization Growth in the
United States, 2002 through 2006:
For our analysis of 2002 and 2006 Medicare home health claims data for
the 50 states and Washington, D.C., we used the following four spending
and utilization indicators: percentage growth in Medicare home health
spending from 2002 through 2006 (table 2), percentage growth in the
percentage of Medicare beneficiaries who used home health services from
2002 through 2006 (table 3), percentage growth in the number of home
health agencies (HHA) from 2002 through 2006 (table 4), and percentage
of outlier cases in 2006 (table 5).
Table 2: Percentage Growth in Medicare Home Health Spending from 2002
through 2006, States in Descending Order:
State: Texas[A];
Growth in Medicare HHA spending: 144%.
State: Florida[A];
Growth in Medicare HHA spending: 90%.
State: Nevada[A];
Growth in Medicare HHA spending: 88%.
State: Oklahoma[A];
Growth in Medicare HHA spending: 65%.
State: Illinois;
Growth in Medicare HHA spending: 62%.
State: Indiana;
Growth in Medicare HHA spending: 44%.
State: Michigan;
Growth in Medicare HHA spending: 42%.
State: Louisiana[A];
Growth in Medicare HHA spending: 41%.
State: New Mexico;
Growth in Medicare HHA spending: 39%.
State: Mississippi;
Growth in Medicare HHA spending: 38%.
State: Idaho;
Growth in Medicare HHA spending: 34%.
State: Alaska;
Growth in Medicare HHA spending: 34%.
State: California[A];
Growth in Medicare HHA spending: 34%.
State: Ohio;
Growth in Medicare HHA spending: 33%.
State: Arkansas;
Growth in Medicare HHA spending: 32%.
State: Georgia;
Growth in Medicare HHA spending: 31%.
State: Arizona;
Growth in Medicare HHA spending: 31%.
State: Tennessee;
Growth in Medicare HHA spending: 31%.
State: Alabama;
Growth in Medicare HHA spending: 30%.
State: Minnesota;
Growth in Medicare HHA spending: 30%.
State: Kansas;
Growth in Medicare HHA spending: 30%.
State: Massachusetts;
Growth in Medicare HHA spending: 30%.
State: New Hampshire;
Growth in Medicare HHA spending: 28%.
State: Colorado;
Growth in Medicare HHA spending: 27%.
State: Washington;
Growth in Medicare HHA spending: 26%.
State: South Carolina;
Growth in Medicare HHA spending: 24%.
State: Utah[A];
Growth in Medicare HHA spending: 24%.
State: North Carolina;
Growth in Medicare HHA spending: 23%.
State: Missouri;
Growth in Medicare HHA spending: 22%.
State: Virginia;
Growth in Medicare HHA spending: 22%.
State: Wisconsin;
Growth in Medicare HHA spending: 19%.
State: Nebraska;
Growth in Medicare HHA spending: 17%.
State: Connecticut;
Growth in Medicare HHA spending: 16%.
State: Iowa;
Growth in Medicare HHA spending: 15%.
State: Maryland;
Growth in Medicare HHA spending: 15%.
State: Delaware;
Growth in Medicare HHA spending: 14%.
State: Maine;
Growth in Medicare HHA spending: 13%.
State: New York;
Growth in Medicare HHA spending: 13%.
State: South Dakota;
Growth in Medicare HHA spending: 12%.
State: Vermont;
Growth in Medicare HHA spending: 12%.
State: Kentucky;
Growth in Medicare HHA spending: 12%.
State: Rhode Island;
Growth in Medicare HHA spending: 10%.
State: New Jersey;
Growth in Medicare HHA spending: 8%.
State: Wyoming;
Growth in Medicare HHA spending: 7%.
State: District of Columbia;
Growth in Medicare HHA spending: 2%.
State: Pennsylvania;
Growth in Medicare HHA spending: 2%.
State: Montana;
Growth in Medicare HHA spending: 1%.
State: Oregon;
Growth in Medicare HHA spending: 0%.
State: West Virginia;
Growth in Medicare HHA spending: -1%.
State: Hawaii;
Growth in Medicare HHA spending: -5%.
State: North Dakota;
Growth in Medicare HHA spending: -8%.
State: United States;
Growth in Medicare HHA spending: 42%.
Source: GAO analysis of Centers for Medicare & Medicaid Services (CMS)
data.
[A] These states ranked among the top three in at least one of four
spending and utilization indicators.
[End of table]
Table 3: Percentage Growth in the Percentage of Medicare Beneficiaries
Who Used HHA Services from 2002 through 2006, States in Descending
Order:
State: Texas[A];
Growth in Part A beneficiaries who use HHA services: 57%.
State: Oklahoma[A];
Growth in Part A beneficiaries who use HHA services: 30%.
State: Florida[A];
Growth in Part A beneficiaries who use HHA services: 28%.
State: Nevada[A];
Growth in Part A beneficiaries who use HHA services: 25%.
State: Illinois;
Growth in Part A beneficiaries who use HHA services: 23%.
State: Louisiana[A];
Growth in Part A beneficiaries who use HHA services: 23%.
State: Minnesota;
Growth in Part A beneficiaries who use HHA services: 22%.
State: Michigan;
Growth in Part A beneficiaries who use HHA services: 19%.
State: Mississippi;
Growth in Part A beneficiaries who use HHA services: 18%.
State: Indiana;
Growth in Part A beneficiaries who use HHA services: 17%.
State: Alabama;
Growth in Part A beneficiaries who use HHA services: 15%.
State: Georgia;
Growth in Part A beneficiaries who use HHA services: 14%.
State: Tennessee;
Growth in Part A beneficiaries who use HHA services: 14%.
State: Ohio;
Growth in Part A beneficiaries who use HHA services: 14%.
State: Utah[A];
Growth in Part A beneficiaries who use HHA services: 12%.
State: Arkansas;
Growth in Part A beneficiaries who use HHA services: 10%.
State: Kansas;
Growth in Part A beneficiaries who use HHA services: 10%.
State: Idaho;
Growth in Part A beneficiaries who use HHA services: 10%.
State: North Carolina;
Growth in Part A beneficiaries who use HHA services: 9%.
State: Massachusetts;
Growth in Part A beneficiaries who use HHA services: 7%.
State: Wisconsin;
Growth in Part A beneficiaries who use HHA services: 7%.
State: New Mexico;
Growth in Part A beneficiaries who use HHA services: 5%.
State: New Hampshire;
Growth in Part A beneficiaries who use HHA services: 5%.
State: Connecticut;
Growth in Part A beneficiaries who use HHA services: 4%.
State: Alaska;
Growth in Part A beneficiaries who use HHA services: 4%.
State: Arizona;
Growth in Part A beneficiaries who use HHA services: 4%.
State: New York;
Growth in Part A beneficiaries who use HHA services: 4%.
State: Virginia;
Growth in Part A beneficiaries who use HHA services: 3%.
State: Kentucky;
Growth in Part A beneficiaries who use HHA services: 3%.
State: South Carolina;
Growth in Part A beneficiaries who use HHA services: 2%.
State: District of Columbia;
Growth in Part A beneficiaries who use HHA services: 2%.
State: Maine;
Growth in Part A beneficiaries who use HHA services: 2%.
State: Delaware;
Growth in Part A beneficiaries who use HHA services: 1%.
State: New Jersey;
Growth in Part A beneficiaries who use HHA services: 1%.
State: Colorado;
Growth in Part A beneficiaries who use HHA services: 0%.
State: Iowa;
Growth in Part A beneficiaries who use HHA services: 0%.
State: California[A];
Growth in Part A beneficiaries who use HHA services: -1%.
State: Missouri;
Growth in Part A beneficiaries who use HHA services: -2%.
State: Pennsylvania;
Growth in Part A beneficiaries who use HHA services: -2%.
State: Maryland;
Growth in Part A beneficiaries who use HHA services: -3%.
State: Rhode Island;
Growth in Part A beneficiaries who use HHA services: -3%.
State: Vermont;
Growth in Part A beneficiaries who use HHA services: -5%.
State: Nebraska;
Growth in Part A beneficiaries who use HHA services: -6%.
State: West Virginia;
Growth in Part A beneficiaries who use HHA services: -6%.
State: Washington;
Growth in Part A beneficiaries who use HHA services: -6%.
State: Montana;
Growth in Part A beneficiaries who use HHA services: -6%.
State: North Dakota;
Growth in Part A beneficiaries who use HHA services: -7%.
State: Wyoming;
Growth in Part A beneficiaries who use HHA services: -8%.
State: Hawaii;
Growth in Part A beneficiaries who use HHA services: -12%.
State: Oregon;
Growth in Part A beneficiaries who use HHA services: -12%.
State: South Dakota;
Growth in Part A beneficiaries who use HHA services: -15%.
State: United States;
Growth in Part A beneficiaries who use HHA services: 12%.
Source: GAO analysis of CMS data.
[A] These states ranked among the top three in at least one of four
spending and utilization indicators.
[End of table]
Table 4: Percentage Growth in the Number of HHAs from 2002 through
2006, States in Descending Order:
State: Louisiana[A];
Growth in number of HHAs: 63%.
State: Texas[A];
Growth in number of HHAs: 54%.
State: Nevada[A];
Growth in number of HHAs: 46%.
State: New Hampshire;
Growth in number of HHAs: 38%.
State: Michigan;
Growth in number of HHAs: 35%.
State: District of Columbia;
Growth in number of HHAs: 35%.
State: Alaska;
Growth in number of HHAs: 34%.
State: New Mexico;
Growth in number of HHAs: 34%.
State: Mississippi;
Growth in number of HHAs: 31%.
State: California[A];
Growth in number of HHAs: 29%.
State: Idaho;
Growth in number of HHAs: 29%.
State: Maryland;
Growth in number of HHAs: 29%.
State: Rhode Island;
Growth in number of HHAs: 28%.
State: Arizona;
Growth in number of HHAs: 28%.
State: Florida[A];
Growth in number of HHAs: 27%.
State: South Carolina;
Growth in number of HHAs: 27%.
State: Georgia;
Growth in number of HHAs: 27%.
State: Illinois;
Growth in number of HHAs: 27%.
State: North Carolina;
Growth in number of HHAs: 25%.
State: Vermont;
Growth in number of HHAs: 25%.
State: Ohio;
Growth in number of HHAs: 24.
State: Maine;
Growth in number of HHAs: 23%.
State: Colorado;
Growth in number of HHAs: 22%.
State: North Dakota;
Growth in number of HHAs: 21%.
State: Virginia;
Growth in number of HHAs: 21%.
State: Oklahoma[A];
Growth in number of HHAs: 21%.
State: New York;
Growth in number of HHAs: 20%.
State: Washington;
Growth in number of HHAs: 20%.
State: Massachusetts;
Growth in number of HHAs: 19%.
State: Indiana;
Growth in number of HHAs: 19%.
State: Utah[A];
Growth in number of HHAs: 18%.
State: Iowa;
Growth in number of HHAs: 18%.
State: Hawaii;
Growth in number of HHAs: 18.
State: Alabama;
Growth in number of HHAs: 17%.
State: Tennessee;
Growth in number of HHAs: 16%.
State: Pennsylvania;
Growth in number of HHAs: 16%.
State: Delaware;
Growth in number of HHAs: 16%.
State: Connecticut;
Growth in number of HHAs: 16%.
State: Wisconsin;
Growth in number of HHAs: 15%.
State: New Jersey;
Growth in number of HHAs: 15%.
State: Minnesota;
Growth in number of HHAs: 13%.
State: Arkansas;
Growth in number of HHAs: 13%.
State: Kansas;
Growth in number of HHAs: 12%.
State: Wyoming;
Growth in number of HHAs: 12%.
State: Oregon;
Growth in number of HHAs: 11%.
State: Missouri;
Growth in number of HHAs: 11%.
State: West Virginia;
Growth in number of HHAs: 8%.
State: South Dakota;
Growth in number of HHAs: 7%.
State: Kentucky;
Growth in number of HHAs: 6%.
State: Montana;
Growth in number of HHAs: 0%.
State: Nebraska;
Growth in number of HHAs): -4%.
State: United States;
Growth in number of HHAs: 29%.
[End of table]
Source: GAO analysis of CMS data.
[A] These states ranked among the top three in at least one of four
spending and utilization indicators.
Table 5: Percentage of Outlier Cases, States in Descending Order, 2006:
State: Florida[A];
Average percentage of outlier cases: 12%.
State: Utah[A];
Average percentage of outlier cases: 11%.
State: California[A];
Average percentage of outlier cases: 7%.
State: New York;
Average percentage of outlier cases: 7%.
State: Texas[A];
Average percentage of outlier cases: 6%.
State: Connecticut;
Average percentage of outlier cases: 5%.
State: Massachusetts;
Average percentage of outlier cases: 4%.
State: Colorado;
Average percentage of outlier cases: 4%.
State: Oklahoma[A];
Average percentage of outlier cases: 4%.
State: Nevada[A];
Average percentage of outlier cases: 3%.
State: New Hampshire;
Average percentage of outlier cases: 3%.
State: Wyoming;
Average percentage of outlier cases: 3%.
State: Wisconsin;
Average percentage of outlier cases: 3%.
State: Vermont;
Average percentage of outlier cases: 3%.
State: Ohio;
Average percentage of outlier cases: 3%.
State: Kansas;
Average percentage of outlier cases: 3%.
State: Arkansas;
Average percentage of outlier cases: 3%.
State: Rhode Island;
Average percentage of outlier cases: 3%.
State: Maine;
Average percentage of outlier cases: 3%.
State: Idaho;
Average percentage of outlier cases: 3%.
State: Iowa;
Average percentage of outlier cases: 3%.
State: Minnesota;
Average percentage of outlier cases: 3%.
State: Arizona;
Average percentage of outlier cases: 2%.
State: Montana;
Average percentage of outlier cases: 2%.
State: Virginia;
Average percentage of outlier cases: 2%.
State: Georgia;
Average percentage of outlier cases: 2%.
State: Nebraska;
Average percentage of outlier cases: 2%.
State: Delaware;
Average percentage of outlier cases: 2%.
State: Alaska;
Average percentage of outlier cases: 2%.
State: New Mexico;
Average percentage of outlier cases: 2%.
State: Missouri;
Average percentage of outlier cases: 2%.
State: District of Columbia;
Average percentage of outlier cases: 2%.
State: Indiana;
Average percentage of outlier cases: 2%.
State: Tennessee;
Average percentage of outlier cases: 2%.
State: New Jersey;
Average percentage of outlier cases: 2%.
State: Pennsylvania;
Average percentage of outlier cases: 2%.
State: Kentucky;
Average percentage of outlier cases: 2%.
State: North Carolina;
Average percentage of outlier cases: 2%.
State: Louisiana[A];
Average percentage of outlier cases: 2%.
State: North Dakota;
Average percentage of outlier cases: 1%.
State: Maryland;
Average percentage of outlier cases: 1%.
State: West Virginia;
Average percentage of outlier cases: 1%.
State: Michigan;
Average percentage of outlier cases: 1%.
State: Alabama;
Average percentage of outlier cases: 1%.
State: Washington;
Average percentage of outlier cases: 1%.
State: South Dakota;
Average percentage of outlier cases: 1%.
State: Illinois;
Average percentage of outlier cases: 1%.
State: Oregon;
Average percentage of outlier cases: 1%.
State: South Carolina;
Average percentage of outlier cases: 1%.
State: Hawaii;
Average percentage of outlier cases: 1%.
State: Mississippi;
Average percentage of outlier cases: 0%.
State: United States;
Average percentage of outlier cases: 4%.
Source: GAO analysis of CMS data.
[A] These states ranked among the top three in at least one of four
spending and utilization indicators.
[End of table]
[End of section]
Appendix II: Comments from the Centers for Medicare & Medicaid
Services:
Department of Health and Human Services:
Office of the Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
January 29, 2009:
James Cosgrove:
Director, Health Care:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Mr. Cosgrove:
Enclosed are comments on the U.S. Government Accountability Office's
(GAO) report entitled: "Medicare: Improvements Needed to Address
Improper Payments in Home Health " (GAO 09-185).
The Department appreciates the opportunity to review this report before
its publication.
Sincerely,
Signed by:
Barbara Pisaro Clark:
Acting Assistant Secretary for Legislation:
Attachment:
Department Of Health & Human Services:
Centers for Medicare & Medicaid Services
200 Independence Avenue SW:
Washington, DC 20201:
Date: January 29, 2009:
To: Barbara Pisaro Clark:
Acting Assistant Secretary for Legislation:
Office of the Secretary:
From: [Signed by] Charlene Frizzera:
Acting Administrator:
Subject: Government Accountability Office Draft Report: "Medicare:
Improvements Needed to Address Improper Payments in Home Health" (GAO-
09-185):
Thank you for the opportunity to review and comment on the Government
Accountability Office (GAO) draft report. "Medicare: Improvement Needed
to Address Payments in Home Health." The Centers for Medicare &
Medicaid Services (CMS) appreciates the time and resources the GAO has
invested to research and report on Medicare's Home Health benefit.
The CMS is committed to continually reviewing and refining our
processes to improve the Medicare program. As a result, within the past
several months. CMS has taken a number of steps to address improper
payments in home health that will strengthen anti-fraud efforts across
Medicare, including the Home Health benefit. CMS has begun by
initiating new enrollment processes that will impact home health
agencies (HHA) as well as other Medicare providers. Effective January
1, 2009. and pursuant to Federal regulations at 42 CFR §424.530(a)(6)
and (a)(7), an organizational provider (including a HHA, can be denied
enrollment if the owner: (1) has an existing overpayment that has not
been repaid in full, or (2) has been placed under a Medicare payment
suspension. CMS Change Request #6097, which went into effect on January
20, 2009, requires contractors to undertake certain additional
verification activities for providers (including HHAs that are changing
their practice location, banking information, special payment address,
or are reactivating their Medicare billing privileges. We believe that
these two activities, as they relate to HHAs, will assist its in
halting questionable HHA behavior and help ensure that HHAs cannot
enroll in Medicare without having satisfied their existing obligations
to the Medicare program.
In addition. CMS has taken steps to address widespread abuse of outlier
payments to Medicare certified HHAs in Miami-Dade County. Florida.
Outlier payments are allowed by CMS for situations that occur
infrequently within a normal ease-mix, but there are over 300 HHAs in
South Florida and they have come to rely upon outlier payments as a
predominant part of their overall reimbursement. The outlier payments
in Miami are about 58 percent (2007 data) of the HHAs overall
reimbursement, the highest percentage of outlier payments in the
country. That compares to a national outlier payment of 6 percent. The
outlier payment was never intended to be such a large part of HHA
reimbursement. To address this problem, CMS has taken a number of
steps: it is suspending HHAs with high amounts of outlier payments:
enhancing visits to beneficiaries in their homes to verify that the
beneficiaries qualify for the benefit; and utilizing autodenial edits
for beneficiaries that do not qualify for the home health benefit. CMS
will continue to perform ongoing beneficiary and physician interviews
as well as onsite visits to HHAs in Miami-Dade that can result in
edits, revocation, deactivation and other actions.
In 2007, CMS developed a Demonstration Project for HHAs in
geographically high-risk areas of the country (California and Texas) to
address high-risk services and providers. This demonstration involved
strengthening initial provider and supplier enrollment and revalidation
of enrollment to prevent "bad" providers from entering the program. The
demonstration also incorporated criminal background checks of owners
and managing employees into the provider enrollment process. Although
criminal background checks have not yet produced substantial results.
mandatory reenrollment reviews and site visits have resulted in
referral of 55 HHAs for revocation of their Medicare billing
privileges. The first year accomplishments of the HHA demonstration
project demonstrates the effectiveness of intensified provider
enrollment and enhanced program integrity resources. Contingent on
additional funding. CMS plans on expanding the HHA demonstration to
Miami-Dade County in light of increasing HHA fraud in South Florida.
The report only briefly mentions the requirement of a Certificate of
Need (CON), which CMS believes would have a significant impact on
stemming the increase of HHAs in high vulnerability areas of the
country. The two States (Texas and Florida) with the highest percentage
growth in Medicare Home Health spending from 2002-2006 are States
without a CON requirement. Moreover, neither California nor Utah has a
CON, and these two States are also included in the top seven States
mentioned in the Draft Report as experiencing the highest percentage
growth in Home Health spending from 2002-2006. CMS believes this is an
area that the GAO should further explore.
We note the following specific comments should be addressed in this
report:
Specific Comments:
1. Under "What GAO Found" on the Highlights page, the GAO states in the
third paragraph that "... CMS does not include physicians. who are in a
position to detect certain types of improper billing, in the agency's
efforts to detect improper payments."
The CMS and its contractors do include physician interviews, as well as
data analysis. on the top-ordering Home Health physicians. TriCenturion
interviewed 76 such physicians in the Miami area. resulting in the
disavowing of approximately 1,000 plans of care and overpayments near
$11 million. The GAO report later acknowledges on page 7 that "... in
Miami, the contractor worked with physicians to identify HHA
overpayments in excess of $9 million."
2. Page 2. last paragraph, last sentence should be revised to say:
"However, fraudulent claims are often not reflected in the CERT error
rate estimate. Since the program uses a random sample to select claims,
reviewers are unable to see provider billing patterns that indicate
potential fraud when making payment determinations."
3. Page 6 [now page 5], last paragraph: The following sentence should
he inserted immediately after the sentence identified in the previous
comment: "CMS officials cited Regional Home Health Intermediary (RHHI)
resource constraints as the reason for the lack of contractor activity
in this area." CMS believes it is important to explain the reason why
criminal background checks have not been routinely performed. A similar
sentence appears to have originally been inserted in the first
paragraph of page 7, but seems to have been stricken. It should be
reinserted as described in this comment.
4. Page 7 [now page 5], lst paragraph: The sentence "However, HHAs are
generally not subjected to revalidation" is incorrect and should be
revised to read: "HHAs are subjected to revalidation to the extent that
RHHI resources are available."
5. Page 7 [now page 5], 1st paragraph. last two sentences: For clarity,
CMS suggests that the GAO should indicate that the physicians being
referenced in the report are the physicians who are ordering the Home
Health services and/or signing the plans of care. CMS refers to them as
"ordering physicians." For accuracy. CMS suggests that the GAO revise
its report to include the language below regarding the extent and
nature of CMS' activities involving ordering physicians:
"The CMS' Field Offices and Program Safeguard Contractors (PSCs) are
identifying high risk ordering and referring physicians for a number of
high risk services, such as durable medical equipment (DME), diagnostic
tests, and HHA services, and interviewing those physicians. Based on
the interviews and signed attestations that the doctors never ordered
the services/equipment. Medicare contractors have implemented a number
of highly effective administrative actions, such as autodenial edits,
prepay review, payment suspension, revocation, and referral to law
enforcement. CMS Field Offices and PSCs have also identified and
interviewed high utilizing beneficiaries and implemented similar
actions based on their feedback that services were not rendered. CMS'
current 7-State DME Stop Gap Plan addresses both high utilizing
ordering physicians and beneficiaries. For instance, in Miami, the
contractor worked with physicians to identify HHA overpayments in
excess of $9 million."
6. Page 10 [now page 8], footnote 13: We suggest the GAO make the
distinction between what the service domain level determination took
into account before and after the refinements of 2008. Specifically,
with regards to the following sentence in footnote 13: "The service use
domain is based on the anticipated number of therapy visits a
beneficiary will receive and whether the beneficiary was recently in a
hospital or rehabilitation facility." We recommend revising the above
sentence to read. In the original HH PPS, the service use domain was
based on the anticipated number of therapy visits a beneficiary will
receive and whether the beneficiary was recently in a hospital or
rehabilitation facility." This change was proposed in the proposed rule
at 72 FR 25361 and finalized in the final rule at 72 FR 49838.
7. Page 11 [now page 9], 1st paragraph: The GAO states that RHHIs are
"... responsible for screening HHA enrollment applications and making
recommendations to CMS ... whether the applications should be
approved."
The GAO has noted in the past that it is difficult to assess
beneficiary eligibility for home health or whether services arc
reasonable and necessary based on paper review alone. The same theory
holds true for determining if an application should be approved by
individuals reviewing paper alone. The RHHI should, at a minimum,
inform CMS or the Zone Program Integrity Contractor of new applications
being considered so that they can perform a site visit.
8. Page 13 [now page 10], 1st paragraph: Please delete "1 to 3 years."
The 1-to-3 year period refers to the enrollment bar under 42 CFR
§424.535(e), which does not necessarily equate to the period of
revocation. They are two related, but distinct, concepts.
In addition, while the GAO statement is true, it is not the only reason
for revocation. The GAO report should state that there are other
reasons CMS will revoke.
9. Pages 23-24 [now page 20], footnote: The information is not
accurate. The CMS-855A collects information on all managing employees
of the HHA. Since virtually every medical director of an HHA will
qualify as a managing employee, it follows that CMS will, in fact.
capture information on HHA medical directors.
10. Page 25 [now page 21], last paragraph: "....CMS does not require
RHHIs to verify the criminal backgrounds of persons named on the
application." The following sentence should be inserted immediately
after this sentence identified in the previous comment: "CMS officials
cited RHHI resource constraints as the reason for the lack of
contractor activity in this area."
In addition. the GAO should clarify in the next sentence of this
paragraph that HHAs are subjected to revalidation to the extent that
the RHHIs' resources permit it.
11. Page 26 [now page 21], 1st paragraph: The following sentence should
be inserted immediately after the language "...on the initial
enrollment application.° "CMS officials cited RHHI resource constraints
as the reason for the lack of contractor activity in this area."
12. Page 26 [now page 21-22], 1st paragraph: Please revise the sentence
that begins "An application is subject to..." to read as follows: "An
application is subject to denial for reasons including. but not limited
to: (1) the provider, supplier, or an owner thereof has been convicted
of certain types of felonies within the past 10 years; (2) the
application contains false and misleading information; (3)
noncompliance with Medicare enrollment requirements: and (4) the
provider is not operational."
13. Page 26 [now page 22], 1st paragraph: Regarding the sentence that
begins "Because RHHIs... the fact that criminal background checks have
usually not been performed has little relation to the contractor's
ability to detect false or misleading information. Contractors verity
other information on the form, including State licensure data and
information on whether the provider is excluded or debarred from
Medicare and have denied applications based on the falsification of
data other than that which relates to felony convictions. This sentence
should be revised to read as follows: "RHHIs are not required to verify
the criminal backgrounds of persons named on the application. CMS
officials cited RHHI resource constraints as the reason for the lack of
contractor activity in this area."
14. Page 26 [now page 22], 2nd paragraph: The language ".... but HHAs
are generally not subjected to this revalidation" is inaccurate. As
stated previously. HHAs are subjected to revalidation to the extent
that the RHHIs' resources permit it.
15. Pages 30-31 [now page 24]: The GAO discusses Office of Inspector
General (OIG) exclusions. including the finding that OIG rarely uses
its authority to exclude in the absence of conviction for fraud.
The CMS requests that the report indicate that CMS agrees that OIG
should more robustly utilize its discretionary exclusion authority and
imposition of civil monetary penalty authority against HHAs.
16. Page 36 [now page 28], first paragraph: The report should be
updated to indicate that CMS suspended 13 HHA agencies by December,
2008.
17. Page 36 [now page 28], 2nd full paragraph: Consistent with previous
comments. the language "...backgrounds of applicants" should be
followed by "...due to resource constraints."
GAO Recommendation:
Assess the feasibility of verifying the adverse legal history of all
key officials named in an HHA enrollment application.
CMS Response:
The CMS believes that the statement "assess the feasibility of
verifying the adverse legal history..." is misleading. The term
"adverse legal history' is very broad and, with the exception of
criminal convictions. RHHIs do verify a number of the adverse actions
identified in Section 3 of the CMS-855. These include GSA debarments,
0IG exclusions, and license suspensions and revocations. We therefore
suggest that the term "adverse legal history- be changed to "criminal
history."
GAO Recommendation:
Provide physicians whose identification number was used to certify or
recertify a plan of care with a statement of services the HHA provided
to that beneficiary based on the physician's certification.
CMS Response:
We will consider this recommendation. Physicians play a critical role
in determining patient eligibility for home care and developing care
plans that reflect a reasonable and necessary mix of home health
services. HHAs are paid a prospectively-set payment for a 60-day
episode of care, with additional payment for beneficiaries receiving 6
or more therapy visits. Outlier payments are available for high-cost
episodes but are computed based on the number of visits provided.
Therefore, this sort of physician cross-checking may not result in a
payment change for most HHA claims. An alternative approach would be to
target the physician cross-checking for beneficiaries who receive a
large number of therapy services or for claims resulting in outlier
payments.
GAO Recommendation:
Direct CMS contractors to conduct postpayment medical reviews on claims
submitted by HHAs with high rates of improper billing identified
through prepayment review.
CMS Response:
Based on the data analysis. contractors currently conduct prepay and
postpay medical reviews for any HHAs with high utilization. which may
include the particular claims referenced by the GAO. However,
contractors must consider the costs and the availability of resources
as they prioritize their work and consider conducting additional
reviews.
GAO Recommendation:
Amend current regulations to expand the types of improper billing
practices that are grounds for revocation of billing privileges.
Grounds for revocation could include a pattern of submitting claims
that are falsified, for persons who do not meet Medicare's coverage
criteria, or for services that are not medically necessary.
CMS Response:
The CMS will take the GAO's recommendation under consideration as we
continue to further analyze and develop strategies to better screen
home health providers and to identify and prevent fraudulent activity
in the home health program.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
James C. Cosgrove, (202) 512-7114 or cosgrovej@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Christine Brudevold, Assistant
Director; Lori Achman; Carrie Davidson; Joanna Hiatt; Julian Klazkin;
Daniel Lee; Elizabeth T. Morrison; and Amanda Pusey made major
contributions to this report.
[End of section]
Footnotes:
[1] MedPAC is an agency that advises Congress on issues affecting the
Medicare program.
[2] Generally, fraud involves intentional acts of deception or
representation to deceive with knowledge that the action or
representation could result in gain. Abuse typically involves actions
that are inconsistent with sound fiscal, business, or medical practices
and result in unnecessary cost. Officials from the Centers for Medicare
& Medicaid Services (CMS)--the agency that administers Medicare--and
stakeholders, including officials with national and state associations
of home health care providers and the Department of Health and Human
Services (HHS) Office of Inspector General (OIG), use the broad term
"fraud and abuse" to describe a wide range of activities for which
sanctions may be imposed under the Social Security Act, including
submitting claims that are known (or should be known) to be false or
fraudulent, are for a pattern of services that are not medically
necessary, or are for services that were not provided as claimed. In
this report we use the term to describe these types of activities.
[3] For example, a recent report from the HHS OIG found that the CERT
error rate for durable medical equipment may be understated because
claims for items that were considered proper by the CERT contractor
were found to be not medically necessary or not delivered when
additional documentation was reviewed by an OIG contractor. See HHS
OIG, Medical Review of Claims for the Fiscal Year 2006 Comprehensive
Error Rate Testing Program, report A-01-07-00508 (Aug. 22, 2008).
[4] See GAO, Medicare: Home Health Services: A Difficult Program to
Control, [hyperlink, http://www.gao.gov/products/GAO/HRD-81-155] (Sept.
25, 1981); Medicare: Need to Strengthen Home Health Care Payment
Controls and Address Unmet Needs, [hyperlink,
http://www.gao.gov/products/GAO/HRD-87-9] (Dec. 2, 1986); and Medicare:
Home Health Utilization Expands While Program Controls Deteriorate,
[hyperlink, http://www.gao.gov/products/GAO/HEHS-96-16] (Mar. 27,
1996).
[5] Medicare claims data for 2006 were the most recent data available
when we began our work.
[6] The OIG's mission is to protect the integrity of HHS programs, as
well as the health and welfare of the beneficiaries of those programs.
The OIG's duties are carried out through a nationwide network of
audits, investigations, inspections, and other mission-related
functions performed by OIG components.
[7] Medicare-covered services generally must be reasonable and
medically necessary for the diagnosis or treatment of illness or injury
or to improve the functioning of a malformed body part.
[8] Homebound means the patient's condition is such that the patient is
generally confined to home, and consequently leaving home would require
a considerable and taxing effort. If the patient leaves the home, the
patient may still be considered homebound if the absences from the home
are infrequent or of relatively short duration, or the absences are due
to the need to receive health care treatment. See 42 U.S.C. §§
1395f(a)(2)(C), (8); 1395n(a)(2)(A).
[9] Intermittent means skilled nursing care that is either provided or
needed on fewer than 7 days each week or fewer than 8 hours of each day
for periods of 21 days or less (with extensions in exceptional
circumstances when the need for additional care is finite and
predictable). See 42 U.S.C. §1395x(m)(7).
[10] Key officials must be named on an enrollment application. These
individuals are owners, directors (if the HHA is a corporation),
managing employees, partners, and authorized and delegated officials.
An authorized official is an appointed official (for example, chief
executive officer or chairman of the board) with the legal authority to
enroll an organization in the Medicare program, make changes or updates
to the organization's status in the Medicare program, and commit the
organization to fully abide by Medicare statutes and regulations.
Delegated officials are those authorized to report changes and updates
to the organization's enrollment record.
[11] State laws or regulations that require prior approval for state
health care capacity increases are commonly referred to as CON
requirements.
[12] CMS may require an HHA to revalidate more frequently based on
complaints or compliance concerns. Providers must also resubmit their
enrollment application under certain circumstances, for example, if
certain information, such as their address, changes, or if they wish to
reactivate their Medicare billing privileges. As of January 20, 2009,
CMS requires contractors to undertake additional verification
activities for providers who are changing certain information or who
are reactivating their Medicare billing privileges.
[13] The clinical domain measures whether the beneficiary has one or
more clinical conditions, such as presence of wounds, problems with
vision, or pain. The functional domain measures the beneficiary's
ability to perform activities of daily living, such as bathing,
dressing oneself, or walking. The service use domain is based on the
number of therapy visits provided and the episode's sequence in a
series of consecutive episodes.
[14] HHAs receive a 60 percent up-front payment for initial episodes
and a 50 percent up-front payment for subsequent episodes for
beneficiaries who receive multiple episodes of care.
[15] See 42 C.F.R. pt. 484 (2007), 72 Fed. Reg. 49762 (Aug. 29, 2007).
The refinements to the payment system were designed to make home health
payments more accurate. Changes included revisions to and expansion of
the patient classification system and replacement of the single 10-
therapy-visit threshold with three graduated therapy thresholds.
[16] The RHHIs are responsible for processing claims and enrolling
providers in a given jurisdiction. In November 2008, the three RHHIs
were National Government Services, Palmetto GBA, and Cahaba Government
Benefit Administrators, LLC. CMS is currently restructuring its
operations by contracting with 15 Medicare Administrative Contractors
(MAC) that will be responsible for claims processing, provider
enrollment, provider customer service, and other activities within a
given jurisdiction. Four of the 15 MACs will be responsible for home
health.
[17] Each PSC is responsible for a separate jurisdiction. The four PSCs
were TriCenturion; New England Benefit Integrity Support Center;
TrustSolutions, LLC; and Cahaba Safeguard Administrators, LLC. CMS is
transitioning its benefit integrity work from PSCs to Zone Program
Integrity Contractors (ZPIC). ZPICs will be responsible for benefit
integrity for all aspects of the Medicare benefit, whereas PSCs work on
specific parts of the Medicare benefit. Two ZPIC contracts were awarded
in September 2008, and CMS estimates the transition to ZPICs will be
complete by the end of calendar year 2009.
[18] Prepayment medical reviews occur after the up-front payment has
been made, but before the final payment for the episode. Postpayment
reviews occur after the final payment.
[19] In general, the so-called anti-kickback statute provides for
criminal penalties against those who knowingly and willfully solicit,
receive, offer, or pay remuneration to induce or in return for
referring an individual to a person for the furnishing or arranging for
the furnishing of items or services for which payment may be made under
a federal health care program. See 42 U.S.C. §§ 1320a-7b(b).
[20] See [hyperlink, http://www.gao.gov/products/GAO/HRD-81-155] and
[hyperlink, http://www.gao.gov/products/GAO/HRD-87-9].
[21] See [hyperlink, http://www.gao.gov/products/GAO/HRD-81-155].
[22] See [hyperlink, http://www.gao.gov/products/GAO/HEHS-96-16].
[23] See [hyperlink, http://www.gao.gov/products/GAO/HEHS-96-16].
[24] While HHA providers could bill for care that they do not realize
is unnecessary, this report's discussion of billing for unnecessary
care refers to billing patterns that suggest the HHA is intentionally
engaging in a fraudulent and abusive practice.
[25] Under the PPS, one way that Medicare home health beneficiaries are
grouped along the service utilization dimension is by the number of
therapy visits. Prior to 2008, HHAs serving beneficiaries that received
10 or more therapy visits received higher payments than HHAs serving
beneficiaries who received fewer visits. See Medicare Program:
Prospective Payment System for Home Health Agencies, 65 Fed. Reg.
41,128 (July 3, 2000).
[26] While an HHA could unintentionally bill for a service that is not
rendered, this report's discussion of billing for services not rendered
refers to billing patterns that suggest the HHA is knowingly engaged in
a fraudulent and abusive practice.
[27] Outlier payments may not exceed 5 percent of the national total of
Medicare home health payments projected or estimated in a given fiscal
year.
[28] Medicare beneficiaries can receive skilled nursing services from
an HHA for insulin injections if they cannot inject themselves and no
other person is willing and able to administer the injections.
[29] A recently enacted Florida law requires all HHAs to report to the
state survey agency, on a quarterly basis, the number of insulin-
dependent diabetic patients receiving insulin-injection services from
the HHA and the number of patients receiving home health services from
that agency. The first report was due October 15, 2008, for the period
from July 2008 through September 2008. See Fla. Stat. Ann. §
400.474(6)(f)1.3. (West 2008).
[30] Effective January 1, 2008, CMS amended its home health PPS. One
change was the creation of additional therapy thresholds "to reduce the
undesirable emphasis in treatment planning on a single therapy visit
threshold, and to restore the primacy of clinical considerations in
treatment planning for rehabilitation patients." 72 Fed. Reg. 25356,
25363 (May 4, 2007).
[31] HHAs receive higher payments for claims for patients with this
rating than they receive for claims for patients with less severe
ratings.
[32] The PSC found that the remaining claims were denied due to
services that were not rendered, not reasonable or necessary, or for
other reasons.
[33] The HHA owner's actions were investigated after a payroll clerk at
one of the HHAs filed a lawsuit against the HHAs, the owner, and her
husband.
[34] CMS does not require HHAs to have medical directors and does not
ask HHAs to specify the names and number of medical directors it
employs on its enrollment application. However, Florida recently
enacted a law that allows the state survey agency to deny, revoke, or
suspend the license of an HHA that contracts with more than one medical
director. The law also prohibits HHAs from giving remuneration to a
physician unless there is a medical director contract in effect. The
law, which went into effect July 1, 2008, also carries a $5,000 fine.
See Fla. Stat. Ann. § 400.476(6)(h), (i). (West 2008).
[35] Criminal history that must be reported on the enrollment
application includes convictions and guilty pleas for selected felonies
within 10 years of enrollment or reenrollment and convictions for
misdemeanors.
[36] 42 C.F.R. §§ 424.530(a)(3), (4) (2007). Other grounds for denial
of enrollment include noncompliance with Medicare enrollment
requirements and a determination by CMS that the provider is not
operational. As of January 1, 2009, providers also may be denied
enrollment if the owner has an overpayment at the time the application
is filed that has not been repaid in full or has been placed under
payment suspension. 42 C.F.R. §§ 424.530(a)(6), (7) (2008).
[37] 42 C.F.R. § 424.515 (2007).
[38] 71 Fed. Reg. 20754, 20758-9 (Apr. 21, 2006).
[39] In fiscal year 2007, through medical review of 1,296 claims, the
PSCs identified $28.1 million in HHA overpayments for recoupment by the
RHHIs.
[40] 73 Fed. Reg. 36448, 36461 (June 27, 2008) (to be codified at 42
C.F.R. § 424.535(c)).
[41] 73 Fed. Reg. 36461 (June 27, 2008) (to be codified at 42 C.F.R. §
424.535(a)(8)).
[42] 73 Fed. Reg. 36455, 36457 (June 27, 2008).
[43] In calendar year 2007, the HHS OIG excluded 3,127 individuals.
Ninety-eight percent of the exclusions of individuals in 2007 were
based on a conviction, license revocation, or suspension. Less than 2
percent were based on default of student loan obligations. In the same
year, the HHS OIG excluded 138 entities, including 12 entities on the
basis of the OIG's determination that the provider submitted false
claims, submitted claims for services that were not medically
necessary, or made false representations of material facts on a claim
or documentation used to support a claim. None of the 12 was an HHA.
[44] U.S. Attorneys, responsible for prosecuting Medicare fraud under
both civil and criminal statutes, are unable to accept all matters and
have a substantial backlog of pending cases. According to the Health
Care Fraud and Abuse Control Program Annual Report for fiscal year 2006
by HHS and the Department of Justice, at the end of fiscal year 2006,
the U.S. Attorneys' Offices (USAO) had 1,677 health care fraud criminal
matters pending (2,713 defendants) and 1,268 civil health care fraud
matters pending. A referral to the USAOs remains a pending matter until
an indictment or information is filed or it is declined for
prosecution.
[45] The greater Los Angeles area includes Los Angeles, Orange,
Riverside, and San Bernardino counties in California. The Houston area
is Harris County in Texas.
[End of section]
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