Home Care Law Blog

Red Flags Rule Deadline Approaches

With November 1 just around the corner, I thought it was a good idea to remind everyone that the Red Flags Rule deadline is November 1 (although since that falls on a Sunday, it is effectively November 2).  This deadline has not yet been extended (as of the moment I posted this).  

Earlier this week I mentioned legislation that had been passed by the House of Representatives  in response to the "overreaching" by the FTC.  According to this article, that legislation has stalled in the Senate.  This legislation would have only exempted out entities with fewer than twenty employees, which would not have helped most home health or hospice providers. However, the legislation did create an "opt out" avenue that would have allowed certain businesses to petition for an exemption.  The article speculates that the FTC might extend the deadline to give the Senate a chance to act, but that is not at all certain.

It appears that by the time this legislation passes, the compliance deadline will have passed.  At that point, most providers will probably not bother considering whether to apply for an exemption, because they will have already put their policies and procedures into place.

If you haven't started your red flags compliance effort yet, now is a really good time to start implementing policies and procedures.  

OIG's FY 2008 HCFAC Report

I meant to get to this last week, but things have been a little busy around here.  Anyways, OIG recently released the FY 2008 Health Care Fraud and Abuse Control Program Report ("HCFAC Report").  There is a lot of great information in the report and it is worth a read each year, if for no other reason to see what OIG is looking at and pursuing.

As with every HCFAC report, the report starts with a summary of amounts deposited and approrpriated to the MEdicare trust fund as well as payments to private persons during the prior year.  According to this summary, in FY2008, relators received $157,281,122 from False Claims Act litigation.  The report states that the government recovered approximately $1 Billion in judgments and settlements against providers.  For comparison, the government had $1.8 billion in recoveries in FY 2007.

In addition, the government opened 957 new health care fraud investigations involving 1,641 defendants. During the year there were 1600 fraud investigations pending involving 2,580 potential defendants and 502 charges were filed involving 797 defendants.  During the year, 588 defendants were convicted of health care fraud related crimes.  On top of that, the civil attorneys at DOJ opened 843 new civil health care fraud investigations and had 1,311 matters pending.  These numbers are slightly higher than last year, but considering the amount of coverage of health care fraud in the news, I was expecting larger numbers.

The report details specific cases around the country, but there is not a lot of home health or hospice fraud reported.  The only hospice case mentioned was really a pharmacy case - doubling billing for hospice patient's pharmaceuticals.

Of course, the report provides a lot of detail on convictions arising out of the DME fraud prosecutions in Florida.  Even though this is a fraud and abuse control report, the most interesting thing for home health and hospice providers has to do with OIG' concerns about CMS's oversight (or lack thereof) related to home health deficiencies.

CMS is concerned about patterns it sees in home health surveys.  CMS reviewed the deficiency history of 5,000 home health agencies and noticed that 15% of the agencies were cited for the same deficiency on three consecutive surveys.  OIG believes that CMS could provide more oversight to home health agencies. (In other words, CMS could do more to stop this trend.)  HHS reiterated its recommendation that CMS use survey data to identify these kinds of patterns.  OIG further recommends that CMS implement intermediate sanctions to deal with agencies with this kind of pattern.  

Given that recommendation, now is a good time to review your own survey history and look for those kinds of patterns.  If the same issues are coming up over and over again, you should begin looking at ways to fix it.  Obviously, whatever you put into your plan of correction is either not being followed (more education? discipline employees?) or it is being followed, but it is not achieving the desired results.  Better for you to fix the problem than to have it come up on another survey, especially if CMS decides that this is the year they are going to follow OIG's recommendation.

Health Care Reform and Bundled Payments

USA Today had an article yesterday on Medicare's bundled payment pilot project. For those of you who missed this, Medicare is testing a project where the hospital receives a bundled payment for all the hospital and physician services related to certain procedures.  The hospital is then responsible for disbursing these funds amongst the providers.  The hope is that moving away from a fee for service model will improve efficiency and reduce costs.

The article details the 4.4% savings Medicare is realizing in this program.  It also mentions how CMS is offering payments to Medicare beneficiaries to choose the hospitals that re involved in the bundling. Although it is not clear if these payments will impact beneficiary choice, CMS is hoping to drive more patients to the bundling hospitals to increase savings.

This system is great if you are the hospital, but the non-hospital physicians and other providers, such as home health agencies, are concerned how this will impact them.  This system gives the "bundling" hospitals a great deal of control, especially when patients are being encouraged to use them.  For home health agencies, the question becomes what happens to the HHAs in a bundling hospital's area?

Will you simply lose out to the hospital's HHA?  If the hospital controls the money, the incentives to keep the patients are even stronger. (Yes, I know, the COPs require patient choice.  ;) )  An area of greater concern is what will the hospital pay HHAs who receive post op bundled patients?  (Currently, bundled services include joint replacements, just the kind of patient who might need post op home care.)  

The hospitals have all agreed to take significant cuts as part of this program.  I would imagine the HHAs who take these patients will be expected to take similar cuts as well.  This could very well be presented as a take it or leave it offer.  The hospital is in control and can simply look for agencies willing to take the reduced amounts being offered. 

-- One other point as an aside, bundling presumes that additional savings can be had from "incentivizing" efficiency.  While there maybe greater efficiencies to be had in the hospital realm, home health is a very different animal and there is not as much savings to be had from efficiency.  HHAs are not likely to realize savings, as the hospitals did, by negotiating lower prices on equipment and supplies (surgical supplies are more expensive then HHA supplies) or by being more efficient with the surgical equipment during surgeries.  BEcause there are far fewer efficiencies to be gained in the HHA realm, bundling may not be the best way for Medicare to save.  Besides, recent studies have shown as currently constituted, HHA services provide a cost savings to Medicare, without "bundling", but I digress.

This is an area that HHAs should be keeping a close eye on, as it will likely follow in the wake of the heavy cuts called from under health care reform.   Putting hospitals in control of the reimbursement in this way stands to significantly change the way HHAs and hospitals relate and if history is any indicator, this will not likely be good for home health.

Congress Acting on Red Flags Rule

The House of Representatives passed an interesting bill last week.  It would limit the application of the Red Flags Rule, by excluding certain small businesses.  The bills sponsors felt that the FTC had over reached with the regulations it passed and that the Rules needed to be dialed back.  The sponsors stated that requiring small businesses to comply with the Red Flags Rule was not necessary, because the risks were lower than for large corporations with thousands of customers.  They also felt that the costs associated with compliance were unduly burdensome for small businesses.

The bill itself specifically excludes health care practices, law firms, and accounting practices with fewer than twenty employees from complying with the rule.  The statute also gives the FTC the authority to create a process allowing certain other businesses to apply for exclusions.  A business may apply for an exclusion if it 1) knows all of its customers or clients individually; 2) only performs services in and around the residences of its customers; and 3) the business has not experienced identity theft and identity theft is unusual for businesses of this type.  This sounds a lot like home care and hospice.

This bill must still pass the Senate, but if it does, small business will have a reprieve.  If you have more than 20 employees, you may still have a way out, by applying for an exclusion.  Of course, we will have to wait and see what the FTC's regulations on applying for an exclusion look like.  However, the statute makes it seem very likely that providers in the homecare and hospice industry would have a good chance of obtaining an exclusion.

One other point, reading the sponsor's comments, he specifically thanks the FTC for delaying implementation of the Red Flag Rule until Congress could act on this issue. It is not clear if he is referring to the extension of the deadline to November 1, or if he is indicating the FTC will further delay enforcement of the Red Flags Rule.  With November 1 fast approaching, we will keep watching the FTC website and let you know.

CMS joins fight against Medical Identity Theft

With less than two weeks until the Red Flags Rule deadline, CMS issued a press release today announcing its release of new resources to help seniors fight Medical Identity Theft.  You can access the full press release here.

The press release directs individuals to www.stopmedicarefraud.gov.  If you click through, it leads to a page that includes tips for individuals to protect themselves as well as a link to the FTC's website on identity theft.  

I don't think there is anything new here, but it is one more place to direct individuals who have questions about identity theft and protecting themselves from it.

More on SEIU's efforts in Illinois

There is an article in today's' Southtown Star about the "union election" of the self-directed care workers in Illinois.  I have posted on this issue previously, but the votes are going to be counted next week.  This article primarily focuses on one parent and her efforts to get more information from the state on the process.  

It also confirms a point I have made on this blog in the past - SEIU and other unions are targeting self-directed care workers for organization, because there is no one to counter them.  According to the article, the third party agencies in Illinois who review time sheets and pay the self-directed care workers were strictly prohibited from saying anything about the unions.  SEIU went so far as to send letters to the third part agencies telling them that they would lose their state contract if they said anything negative about unionization.

Given SEIU's track record of being less than candid during organizing campaigns the lack of a third party to counterbalance SEIU's "promises" is a huge advantage to the union.  These families only hear what the UNion organizers tell them and they have no obligation to be honest.  There is also no one to counterbalance the "high pressure" tactics SEIU is famous for using.

Even in this article, the mother that was interviewed had SEIU organizers show up at her door on a Sunday afternoon. They got her information from the state so that they could visit her at "her place of work."  Really, that is great, talk about privacy.  If you are a self-directed care worker, the unions may get your home address and other contact information from the state.

The point here is this, SEIU targets the self-directed care workers, because it is easy to win an election when you have no one to oppose you and to share the other side of the story.  For example, any promise of increases in pay requires the state to come up with more money.  Given the current economic climate, increased reimbursement rates seem less and less likely.  They easy win then allows the union to collect more dues.  In Illinois, the self-directed workers who voted no to the union will still have to pay the unions dues.  If the rates do not increase, all of the self-directed care workers will actually be worse off than before the union.  (I bet the organizers did not mention that.)

This matters to home health and hospice, because the self-directed care workers are usually the first step in the unions efforts.  Once they get the self-directed care workers, they begin to target the other home care providers.  They use the self-directed care workers as an "example" of what they can do for your employees.  Often, the self-directed care program is a convenient way for SEIU to interject itself into the state provider system.  In Indiana, SIEU has actually bussed in Illinois members to appear at rallies to make it look like they have a lot of members in our state.  Hmm, that is convenient.

As the vote in Illinois unfolds, providers in other states should be watching to see what stories develop.  Often, these stories can be helpful to providers in other states that are at odds with SEIU.  I suspect, we will see stories like that coming out of Illinois as the providers begin to see that they may not have been told the whole story.  Stay tuned.

UPDATE:  Here, from Michelle Malkin, is more on Illinois and feedback regarding SEIU's efforts around the country.  

Interesting homecare technology demonstration

Here is an article from the Winona Post in Winona, MN about a new technology demonstration project.  This project uses technology, including web cams to allow providers to check in on a patient at home.  The system uses a webcam and a remote to allow providers to turn on the camera and check on the patients at home.  This is still in the development stage, but the parties involved are considering its applications for therapy and other check-ups.  I know telemedicine has been "just around the corner" for years, but this is another step in that direction.  

As more and more homes have broadband internet access, the ability to set up video conferencing to make this workable becomes easier and easier.  Of course, later in the article they talk about the technology's application in other areas, such as 911 calls.  It implies that the police would be able to turn on the camera to see what is going on in the home.  

This raises a very important question for the use of this kind of equipment, if the home health provider can turn the camera on remotely, what are the policies and procedures that are in place to maintain the patient's privacy?  If you thought employees snooping through records created a stir, what would the outcry be when a home health, hospice, hospital, or other provider employee started turning on the cameras without permission.  This may be addressed in the technology, such as the voice conferencing can be turned on remotely, but the camera cannot be turned on remotely.  (I don't know if that is a whole lot better, because you could still learn a lot from listening.)  

I think it will be interesting to see how this technology demonstration turns out, because with the constant assault on home health and hospice reimbursement any technology that can lead to greater efficiency is needed.  If the system can reduce physician visits by up to 50%, what efficiency could it provide to home health and hospice - jut the application for on-call hours could potentially save employee time. 

I just think their needs to be some careful consideration of the related privacy issues to placing the "home care big brother" camera in patients homes.

Health Care Fraud and Organized Crime

Over the last year, there has been a great deal of coverage of the "rampant fraud" by home health and other Medicare providers.  During speaking engagements and on this blog I have mentioned that a driving force behind that growth in fraud in home health is real criminal elements moving into home health, because Medicare fraud is easier to get away with and carries lesser penalties.  Well, this week the Miami Herald ran an article focusing on how organized crime has moved into Medicare fraud.  It is an interesting read, because it talks about a number of recent cases, complete with dead informants and New York crime families.  

The growing involvement of organized crime and other criminals in Medicare fraud is a fact that seems to be constantly overlooked by the government as they talk about ways to combat home health care fraud.  Earlier this week, at the AHLA/HCCA's annual compliance forum I sat in a presentation with attorneys from OIG and DOJ.  They discussed the HEAT initiative and the five principles that govern its operation.  The five principals were: provider enrollment, payment methodologies, compliance practices, vigilant monitoring, and swift responses.  Of those five, only two are likely to impact the influx of actual criminals who are defrauding Medicare.  

For example, under payment methodologies OIG has talked about revising home health PPS.  They are looking at home health profitability as well as suggesting a cap on outlier payments to agencies.  They are doing this, in part, because they believe that profitability draws criminals to home health care fraud.  Of course, if I am billing for services I did not provide every dollar I receive is profit.  Revising payment methodologies offers little deterrent to criminals, who can still make a quick buck, but harms an agency's ability to stay in business.  

This article makes it clear that the real draw is the ease with which they can steal lots of money and the much lower sentences they receive.  Reducing reimbursement to providers will not eliminate this problem.  Frankly, I doubt OIG's proposals to more carefully screen providers will help much either.  

Let's be honest - criminals who are intent on defrauding Medicare are not going to hesitate to lie on the Medicare provider application.  Requiring on-site inspections might help, but home health and hospice already have to undergo a certification survey.  Perhaps a more thorough inspection could be done, but I think that this is a problem that is going to require investigations and prosecutions.  Each step you add to require better authentication only makes it harder for the legitimate providers to enter the system.  

The bottom line is that many of the efforts being considered to respond to the growing incidence of Medicare fraud may actually do very little to deter crime while doing a great deal to harm legitimate law abiding providers.

OIG's FY2010 work plan

I know I said I'd get to this last week, but work (on the CLE conference I am at) got in the way.  Anyway, I have had a chance to look at the OIG's 2010 Work Plan and there is a lot in it about home health.  (Hospice is mentioned, but not nearly as much.)

OIG is going to look at a number of areas that have been of concern in the past, for example Part B payments to home health beneficiaries.  OIG is concerned that outside suppliers of services and medical supplies may be receiving payments for services that are covered by a home health episodic payment.  

OIG is also going to be looking at the accuracy of HHRG coding.  THis should not be a huge surprise, given that CMS used coding creep to justify reductions in home health reimbursement under the revised PPS.  If you are not auditing your HHRG coding to make sure it is accurate, you should start.  The clinical record should support the codes you use.  Not only is upcoding an problem for individual agencies (fraud, false claims, etc.), but if OIG sees a "trend", you can count on more reductions.

Not surprisingly, given what happened in Miami, OIG is going to be looking at home health payments for insulin injections.  They will also be looking at outlier payments in general.

Perhaps the worst item in the work plan is OIG's announcement that it will be reviewing home health agency profitability.  OIG intends to review cost report data to analyze HHA profitability trends.  Of course, OIG is doing this to see if the payment methodology should be adjusted.  OIG was led to add this to the work plan, because of the increasing home health expenditures since 2000.  OIG does not make clear what level of profitability it will find to be acceptable.  Given MedPAC's annual cry for rate reductions based upon the "profitability" of home health agencies, I would wager a large amount of money on how this one turns out.  

This makes it all the more important for HHAs to get their cost reports correct.  If OIG sees what it thinks are unacceptable profits, it will add its voice to MedPAC's cry to reduce excessive profitability by reducing rates.  It won't matter if the assessment is based upon flawed cost report data.  (For those of you who are home health compliance officers, you should consider adding cost reporting to this year's audit plan)  

I also think it is suspect to have OIG assessing profitability.  Compliance with legal standards is one thing, compliance with an ephemeral notion of profitability is another.  This is an area to monitor closely, because it seems very likely that OIG will determine the "methodology needs to be adjusted" - translation - home health rates need to be cut.

Finally, OIG says it will be looking at home health Diabetes Self-Management Training Services.  They are going to look at regions with billing patterns that show high utilization of these services.  If you provide these services, you should check that all such patients meet the conditions of coverage, including the quality standards.  OIG will also be reviewing CMS's oversight of HHA Oasis data.  It looks like OIG will be focusing more on CMS' end of the OASIS chain, specifically CMS'    process for ensuring HHAs submit accurate and complete OASIS data.

OIG will also look at Medicaid home health issues.  One that you should be auditing for is services for which Medicare and Medicaid paid.  OIG is going to look at data to determine the extent to which Medicare and Medicaid both paid for the same service.  OIG will also look at what controls states have in place to prevent this.  I suspect that, although they seem to be concerned about the state's controls, their look at the data might lead to agencies being contacted as well.  (At a minimum, somebody owes the government a payback.)  OIG will also be checking that Medicaid HHAs meet the requirements to provide services and whether the beneficiaries are eligible.

HOSPICE

Hospice does not receive as much attention in this year's work plan.

OIG is going to look at physician billing for Medicare beneficiaries.  OIG is concerned that physicians are billing for services that are covered under the hospice benefit.  They are looking for double billing by physicians.  (If the physician is providing a covered service as an employee of or under arrangements with the hospice, the hospice is paid to provide the service.  The physician should not bill separately.)

OIG is also going to evaluate utilization of the hospice benefit.  They are looking at the increasing diagnoses that go onto hospice as well as the increase in lengths of stay since the 210 day cap was removed.  OIG will also look at the characteristics of hospice beneficiaries, geographical variations, and differences between for-profit and not-for-profit hospices.  

OIG is going to evaluate duplicate drug claims under the hospice benefit and part D.  This was an area OIG mentioned last year as well.  This is similar to the physician billing issue.  OIG will be looking to see if Part D claims for drugs for hospice beneficiaries were covered under the hospice benefit.  They will also be looking to see if Part D payments are correct, supported, and not duplicated payments.  Finally, they will look to identify controls to prevent duplicate payments.  

OIG releases FY 2010 Work Plan

I have not had a chance to read through it, but you can download the FY 2010 workplan here.

I will have highlights for home health and hospice tomorrow.