Home Care Law Blog

Bounty Hunters coming to Medicare Fraud

Just last week, I posted on OIG's concerns that RACs were not making enough fraud referrals.  OIG noted that for the number of claims reviewed and amount of money recovered they thought there should have been more than one or two fraud referrals.  The report went on to outline some "ideas" for how to increase the number of fraud referrals from RACs.  (Remember, RACs do not investigate fraud, if they identify what they believe to be fraud, they are to report it to the appropriate agency.)

 It appears that report was foreshadowing this week.  President Obama announced on Tuesday his plan to use Medicare Fraud Bounty Hunters to uncover Medicare fraud.  There have not been a lot of specifics issued yet, but according to the Associated Press story: "the auditors would get a cut of whatever is recovered."

It sounds like the plan is to allow RACs to keep a percentage of funds the government recovers as the result of a criminal referral from the RAC.  As you may recall, OIG suspected part of the reason it only received two referrals during the pilot project was due to the financial incentive to report identified problems as errors instead of crimes.  The expectation here is that explicitly allowing them to get the bounty on a criminal case will lead to more criminal referrals.

Of course this new proposal raises a different possibility - reporting questionable cases as crimes so that DOJ does the work, while the RAC gets a percentage of the take.  Think about it - I uncover a case that could be fraud, turn it over to OIG, the government investigates and obtains the recovery, and then I get a check.  That's as good as being a Qui Tam whistleblower.  The added problem is that the hapless provider who gets referred is now dealing with a criminal investigation instead of an audit.  That is a much more onerous process.

Of course, a lot of that depends upon the actual structure of the program.  I have not been able to find a copy of the executive order the President signed.  It would be nice to know a few things - is this simply empowering the RACs or are we adding even more auditors? if there is no conviction does the auditor still recover?  What sort of parameters are in place to guide referrals?  To whom will RACs report suspicious activity? Will auditors receive additional training on identifying crimes?  Can auditors be penalized for making multiple inappropriate referrals?  

I still think that allowing auditors to reap a bounty from a fraud referral is a bad idea. It is also duplicative.  The government is already employing data mining to identify aberrant patterns in claims data to focus its investigations.  The RACs will be doing the same things, they will just be referring additional cases to the feds.

For providers, this just makes the whole RAC audit process even more stressful, as you are not only trying to keep money you earned for services you provided, but now trying to avery a criminal referral as well. It is even more important now to be on top of you own compliance efforts.  I have said for some time that the best response to the RACs was an effective compliance program.  With the stakes going up, that advice is even more important.

MedPAC Report 2010 Part III: Hospice

Well, MedPAC has a much less onerous report on Hospice than it has on home health.  MedPAC recognized the growth in hospice since 2000, but attributes this more to growing awareness of the benefit than any inappropriate activity by providers.

MedPAC spends some time discussing hospice profit margins, although MedPAC is clearly not as concerned about hospice margins as it is about home health margins.  First, MedPAC notes that since 2000 the average hospice provider margins have fluctuated from 4.5% to 6.5%.  For 2007, MedPAC noted hospice margins were 5.9%.  For 2010, MedPAC projects hospice margins to decline slightly to 4.6%.  Within these averages, hospice profitability ranges from -13.7% at the 25th percentile up to 20.1% at the 75th percentile.  That is a pretty wide margin, but the average is still a modest 5.9%.  

These numbers are skewed high, because MedPAC did not include the cost of bereavement services in this calculation.  MedPAC states that this would have reduced hospice profitability by an average of 1.5%.  I question MedPACs decision to not include this number in its calculations.  I understand Medicare does not reimburse for these services, but it is still a cost of providing the care.  Bereavement services are required under Medicare.  If you are going to accurately calculate margins, you need to include all of the costs.

Nevertheless, MedPAC is not advocating reducing hospice payments.  The recommended increase is reduced somewhat, but MedPAC is still advocating a 1.1% increase in hospice payments, subject to adjustment for the final market basket numbers.

MedPAC makes several other recommendations in its report as well aimed at what it perceives as a growing trend of longer stays in hospice.  From 2000 to 2008, the 90th percentile for length of stay grew from 141 days to 235 days.  This is attributable to a number of factors, including the increase in non-cancer diagnoses entering hospice, but MedPAC makes a number of other recommendations to address this change:

    1.    It reiterates its recommendation to adjust hospice reimbursement so that the daily rate that remains the same throughout care changes to having relatively higher payments at the beginning of the episode to lower payments as the episode continues.  (This is in response to the growing number of days in the longest hospice stays.)

    2.    Have the physician or advanced practice nurse visit the patient in person to determine continued eligibility prior to the 180th day recertification and every recertification after the 180th day recertification.

    3.    Require narratives on certifications and recertifications.

    4.    For hospices that have more than 40% of their stays exceed 180 days, require medical review of all stays in excess of 180 days.

MedPAC is also concerned about fraud and abuse and has a number of recommendations for areas that OIG should be looking at:

    1.    The prevalence of financial relationships between hospice and long term care facilities.

    2.    Differences in patterns of nursing home referrals to hospices.

    3.    The appropriateness of enrollment practices of hospices with unusual patterns of utilization.

    4.    Appropriateness of hospice marketing materials and other admissions practices and potential correlations between length of stay and deficiencies in marketing and/or admissions practices.

These recommendations are interesting, because OIG already has a long standing suspicion of hospice and nursing home relationships.  Providers should take this as a signal that more investigations of hospice/nursing home relationships are on the horizon.  MedPAC has concerns about these relationships and is directing OIG to do a comprehensive evaluation of these relationships.  

If you are involved in any sort of financial relationship with a facility - leasing space, leasing staff, joint venture now is an excellent time to review these arrangements and make sure you are in compliance with the law.  If you are involved in any form of kickback arrangement or are being pressured to be involved in one, this is even more reason to walk away -- more enforcement is likely on the way.

MedPAC Report 2010 - Part II: Margins and Profits and Losses, Oh My!

As some of you know, one of my biggest pet peeves is MedPACs constant refrain about home health agency profit margins.  Yet again this year, MedPAC concludes that home health agencies average 17.4%, this is an an increase over last year.  At first glance, this seems like a rather large number, but when you read the details of MedPAC's report, you discover the problem with avarages - not everybody is making 17.4%.

According to the report, agencies in the bottom quintile (or bottom fifth) have margins of -12%.  That means 20% of home health agencies are operating at a 12% loss.  In contrast, agencies in the top 20% have average margins of 36%.  That is a massive disparity and the high profit agencies are pulling the average up significantly.

MedPAC mentions that this disparity could be do to a number of factors including inaccurate payments or differences in provider efficiency.  MedPAC concludes that the disparity is due to variations in provider efficiency.  MedPAC notes that the providers with the lowest costs and highest case mix also have the best financial performance.  (In other obvious news, the sky is blue and if you drop an object off of a building it will fall.)

The real issue is how do the high efficiency (or high profit) agencies get to that point.  HIgh margin agencies on average had 40% lower costs than low margin agencies.  MedPAC determined that this disparity was due to the larger size of high efficiency agencies leading to "economies of scale."  Looking at the chart MedPAC included, the larger agencies also have a 34% lower cost per visit and peform almost 11% fewer visits per episode.  At the same time the high profit agencies make 25% more visits per year.  (They have more patients.)

There is one other factor that separates low margin and high margin agencies - case mix.  High margin agencies "provided more episodes that included 10 or more therapy visits" as well as had more episodes to patients in the two highest clinical severities.

I can't help but notice that high margin agencies tend to provide more therapy visits than low margin agencies.  This probably drives some of the profit difference, but the real issue is the differences in costs (efficiency). The 34% difference in costs per visit and the 40% lower costs overall is a wide disparity.  It becomes an even larger issue when you consider MedPAC's recommendation to rebase home health payment rates to reflect the "average cost of care."  With high profit agencies showing significantly lower costs than low profit agencies, the average costs that will form the basis for the rebased rates will likely be lower than many low profits agencies actual costs.  This will lead to the smaller agencies being forced out of Medicare.

This is in line with what CMS has done elsewhere - cut reimbursement to force providers to become "efficient".  However, given the nature of home health, I don't know that the "efficiencies" are as easy to achieve, unless you are a large provider.  What this means is that MedPACs recommendations are likely to have the effect of moving home health to a large agency model.  The efficiencies may very well be gained through consolidation of agencies.  This may take several years, but it looks like that may be on the horizon.

For smaller agencies, you need to look at your operations now and start considering ways to reduce costs.  Efficiency is MedPACs new buzzword.  If you are not "efficient", you are going to have a hard time staying in business as a Medicare home health agency.

I know I have not gotten to the MedPAC comments on hospice.  I will get to that on Monday, as I will be away for the next few days.  Stay tuned....

MedPAC report 2010 - Part 1

Well, it's that time of year again -- MedPAC issued its annual report to Congress on Monday.  As those of you in home health can guess, MedPAC's recommendations are not very good from the provider perspective.  If you are in hospice, you can breathe a sigh of relief, they are not nearly as concerned about your industry.  If you are in home health, MedPAC thinks you make too much money and that Medicare needs to drastically reduce home health spending.  

Just like last year's report, this report starts with an analysis of trends in the home health industry.  MedPAC notes that the number of home health agencies has continued to rise and this year reached 10,422 this year.  This is not as many as in 1997, but it is the largest number of home health providers since 1997.  It is interesting to note, however, that only 546 new agencies opened last year, this is the lowest number of new agencies since 2002.  

MedPAC notes that the growth has slowed, but is still troubled by the growth in providers since 2002.  Of course, MedPAC notes that six states account for 90% of the growth since 2002.  These six states also happen to include states  where CMS has noted the most fraud - Florida, Texas, California, Michigan.  The fact that the largest amount of growth occurred in states where the largest amount of fraud occurred doesn't appear to mean anything to MedPAC.  They apply their "averages" and reach their conclusions.

MedPAC states that recent program change have not curtailed agency entry, even though the number of new agencies in 2009 was down by almost 30%.  Gee, call me crazy, but that seems to be a curtailing.  MedPAC bases its assessment on the fact that fewer agencies left the program last year. But old agencies staying is not the same as new agencies coming into the program.  Plus, with the outlier cap and the 36 month rule, I would wager you will see more closings this year.

MedPAC comments on the increase in the number of episodes patients are on home health, as well as the increase use of home health by Medicare beneficiaries.  This of course tracks with the growing effort by hospitals to get patients out quickly and with the increased use of home health as long term care.  (MedPAC is correct that this is not what the benefit was designed for, but it has begun to morph into that.  You see more MS patients and others who used to go to nursing homes staying at home on home health.  Whether these patients should be on home health is a policy issue that should be addressed explicitly by Congress, not simply hit tangentially as part of MedPACs effort to cut home health spending.  Frankly, the evidence suggests it is cheaper for Medicare to care for these patients at home.  If these patients begin to be shifted back to nursing facilities, overall Medicare spending is likely to increase, but I digress.)

MedPAC then turns to therapy visits within the episode.  This is an issue that I don't think MedPAC really focused on enough.  According to MedPAC's numbers, the number of physical therapy and occupational therapy visits beneficiaries have received has increased, while the number of all other types of home health visits have decreased.  MedPAC also noted that when the revised PPS went into effect in 2008, the therapy visit patterns changed.  The number of episodes with visits in the 10-13 range dropped, as CMS expected.  However, the number of episodes with visits in the 6-9 range and 14+ range increased.  MedPAC suspects that the clear move to 6-9 and 14+ is part of an effort by agencies to game the therapy thresholds to increase their bottom line.   

I take issue with MedPAC questioning the drop from 10 down to 6-9.  The whole point of the revised PPS was to remove incentives to get every episode 10 visits.  As CMS expected, when they changed the reimbursement system, the 10 visit peak came down.  Yet, MedPAC is complaining that the revisions did exactly what it was supposed to do.  As for the 14+ visit episodes, based upon HHA comments, I think it was reasonable to expect 14+ therapy visit episodes would increase.  (Although, it indicates that agencies were underserving high therapy needs patients pre-2008).  I think a 26% increase is cause for concern, because it either represents gaming the system post-2008 or failing to provide all necessary care pre-2007.  

MedPAC believes that the flaw is that therapy pays based upon visits, not based upon patient characteristics.  Regardless, it seems that specifically addressing therapy visits in PPS would go along way to reducing home health expenditures while addressing MedPACs specific concern.  If agencies are gaming the therapy payments to improve their bottom line, this should be stopped.  Developing a new payment methodology for therapy visits would serve to reduce the "gamesmanship" and, in turn,would help to reduce home health expenditures.   Such an approach would have the added bonus of not bankrupting providers the providers who are honestly trying to do a good job without gaming therapy visits.  I don't have a magic solution to this problem, but I think MedPAC should have focused on this area more.

Instead, it trots out its usual "solutions" to home health expenditures, which impact everyone equally, rather than addressing specifically identified issues.  MedPAC's specifically recommends that Congress should:

    1.    Eliminate the 2011 market basket increase and Direct the Secretary to rebase rates based upon current costs.

    2.    Direct the Secretary to modify payment systems to protect beneficiaries form stinting or lower quality of care resulting from rebasing.

    3.    Develop new outcomes measures to evaluate quality or care provided patients.

    4.    Direct the Secretary to review HHAs that exhibit "unusual patterns of claims payment" and grant the Secretary powers to implement safeguards such as a moratorium on new providers, prior authorization, or suspension of prompt payment requirements, in areas that appear to be high risk.

MedPAC does not make a specific recommendation, but MedPAC also mentions improving physician accountability.  MedPAC will be assessing several options for addressing physician accountability. 

Of course, there is a lot more in the Report and tomorrow I will be discussing MedPAC's profit and loss numbers for the industry and its "vision" for the future.

OIG report on RAC Fraud Referrals

OIG recently issue a report on Fraud Referrals by Recovery Audit Contractors.  This report is the result of OIG investigating the fraud reporting by RACs during the demonstration project.  According to OIG, in the time period of 2005-2008, during which RACs recovered $1Billion for CMS, they only referred two cases of suspected fraud to OIG.  OIG seems to suspect that the RACs should have reported more fraud.

OIG discovered that two reports were made, because the RAC showed OIG the letters it sent to CMS.  It appears that CMS did not have any record of the fraud referrals.  Another RAC notified CMS of what it believed to be millions of dollars in improper payments, but CMS directed the RAC to stop its review of the particular claims.  The RAC then attempted to refer the case to local law enforcement.

Under the demonstration project, a RAC that made a fraud referral would not receive any contingency fee on the claim.  OIG believes that this may have led to underreporting of fraud.  Under the current RAC program, RACs are required to report suspected fraud to CMS.  Although this eliminates one of OIG's biggest concerns, OIG has several other recommendations that it believes will lead to more fraud referrals from RACs.

OIG recommends that CMS initiate a database for fraud referrals.  This would reduce the risk of fraud referrals getting lost as happened with the RAC during the demonstration project.  

OIG also recommends CMS provide more formal training to RACs about fraud.  If the RACs have a better understanding of what fraud is, they will be more likely to identify it when they find it during a review and/or audit.  In conjunction with this training, OIG recommends CMS implement policies and procedures designed to provide RACs with guidance on when to refer potential fraud cases.

CMS has already provided two trainings to the RACs and is working with DOJ to schedule more.  CMS did not indicate whether it was developing guidelines or whether they were part of the training.  Any guidelines developed by CMS will be important to providers, because they will set the parameters for RACs and could provide a lower threshold for reporting.  Sort of a "when in doubt report" model, although OIG may not want to investigate every marginal case in that manner.

The report makes it clear that OIG views the RAC program as another facet of its fraud and abuse enforcement program.  As I have said in the past, it was always just a matter of time before RACs began identifying and reporting fraud.  After CMS implements OIG's recommendations, it will be interesting to see how much additional fraud RACs report.

Given that at least two of the demonstration project RACs attempted to report some level of fraud, I don't imagine there will be a huge increase in reporting.  I suspect there will be some increase, but that was likely anyway, because of the combination of requiring fraud reports along with RACs "learning on the job."  

I think a real concern here is the increased potential for mistaken reporting by an overzealous auditor.  For example, I have had cases where a client was reported for fraud by an auditor, because the auditor's interpretation of a billing rule was different than the provider's interpretation.  This can turn a relatively straightforward recoupment audit into a criminal investigation.

The main point of this report is that OIG views the RAC program as another piece of the enforcement puzzle and is expecting more fraud reporting out of the RACs.  This is just one more reason for providers to have some trepidation about the RAC program as it begins to focus on the home health and hospice industry.  

Outlier Cap already having an impact -- on everyone but the criminals

There is an interesting article in today's Sun Sentinel, discussing the impact that the new home health PPS outlier caps are having in southern Florida. This will probably not come as a surprise to anyone in the home health industry, but the impact is not being felt by criminals, but by the homebound patients who need care.  The story describes how patients that would otherwise receive home health care are being turned away by agencies and being put into nursing homes, because agencies do not want to take on more intensive patients with the outlier cap in place.

The article portrays the cap as a great idea and then discusses why it was necessary.  Of course, the article states that the cap was necessary because agencies "have taken advantage" of the outlier formula to provide care to patients that need multiple visits a day.  It is funny the article implies that agencies fraudulently manipulate the outlier to obtain higher reimbursement in the same article that states the cap on outlier payments is leading to agencies being unwilling to take on these patients.  The article completely ignores a key fact - the outlier payment serves an important purpose in the home health PPS system.  The PPS system is built on the concept of reimbursing based upon resources used in caring for patients.  The outlier payment was designed to address a reality of the PPS system -  caring for some patients requires a higher degree of resources and the traditional episodic payment did not address those cases.  The outlier payment is a reflection of the higher resource utilization in these cases.  

In legitimate outlier cases, it costs the agency more to provide care to the patient.  Therefore, CMS pays more for the care.  Some agencies, due to location or business model take on a higher percentage of outlier patients.  Taking on a high number of outlier patients by itself is neither "taking advantage" of the system nor fraudulent.  (I am assuming these are legitimately outlier patients, if they are not, the cap really isn't a deterrent anyway.)  The real issue in FLorida was fraud.   

The article discusses the outright fraud in the next paragraph and points out the billing for phony patients, etc. that went on in Florida.  Some of the alleged abuses of the outlier were classic frauds like gathering a group of diabetics in a room at a nursing home, administering them each an insulin shot assembly line style and recording each shot as a home health visit.  That is obviously fraudulent and an abuse of the outlier payment, but if agencies legitimately chose (by virtue of location or otherwise) to service  a higher percentage of outlier patients, provide those services in the patients home to homebound patients, they are not "taking advantage" of anything.  Sending a home health worker to a patients home multiple times a days is expensive - more expensive than an agency can afford on the normal, ever shrinking, outlier payment.  In rural areas and for certain diabetic patients, the outlier payment is needed so that home health agencies can afford to provide the care.

CMS should have focused more on prosecuting the criminals.  What they did instead was use the misconduct in Florida to cap outlier payments and ignored the concerns of the industry that this cap would lead to a reduction in the availability of care.  Because of anti-dumping statutes and federal case law, current patients may not feel the impact, but new home health patients are feeling and will feel the impact.  Home health agencies are not charities, they are businesses.  This article demonstrates that agencies will alter their business model to reflect CMS reimbursement policy.  If CMS is capping outlier payments at a certain percentage, agencies will cap the number of outlier patients they take.  In some areas, this will result in patients who are not able to receive home health services, because no one is willing to provide outlier services.

The article mentions another innocent group that is harmed by CMS' cap - home health employees.  Agencies that serve a higher percentage of high utilization patients are cutting nurses salaries, because they can't afford the salaries as a result of the reduced reimbursement.  (And lets not forget the other reductions to reimbursement in this years PPS final rule.)  These home health workers work hard to care for patients in their community and they are now rewarded for their efforts by a reduction in pay, because CMS capped outlier reimbursement.  Gee, nothing like punishing the innocent parties.

At the same time the cap is punishing all the wrong people, the outlier cap will not have any deterrent effect on those who wish to defraud the system.  If an agency is billing for phony patients, they will continue to bill for phony patients.  The outlier cap does not make a difference, except that they are smart enough to keep the outlier fraud to 10%.  Every dollar they bring in is "profit", because they have no real costs.  If CMS really wanted to end fraud and not simply implement yet another home health rate reduction, they would have focused more on auditing and investigating providers whose billing practices themselves are outliers.  In other words, target agencies that have more than 10% of the income form outlier payments for audits and/or investigation.  This would allow agencies to continue serving high utilization patients, while still allowing CMS to uncover the fraudulent providers.  (Hmm, isn't this something the RACs could have easily monitored?) 

Maybe, if enough patients, employee, and agencies make some noise, CMS will realize that the outlier cap does not really address the problem.  Over the next year or two, I suspect the industry will be able to generate a great deal of data that will contrast very starkly with the statistics that CMS cited in the comments to the 2010 PPS final rule.

Health Care Fraud in the News Again

Last week, the President hosted a Medicare Fraud summit to evaluate new ways to combat Medicare Fraud. During the summit, one of the attendees noted that he government "cannot prosecute its way out of the Health Care Fraud problem."  On the heels of the summit, the Administration announced its FY 2011 budget.  The budge includes $1.7 billion for Medicare Fraud enforcement.  This money will be used for a number of efforts:  it will more than double the Health Care Fraud and Abuse Control discretionary funding, it will expand the DOJ/HHS joint strike force efforts, it will provide for better data sharing, and increase oversight and prevention.

The data sharing plan is discussed more fully here.  Essentially, Medicare is continuing its efforts to consolidate all of its claims data into one place.  Then they can use datamining techniques to look for patterns in the data.  In the statement, Secretary Sebelius mentions the use of benchmarking to identify questionable practices.  I have mentioned this plan on this blog before - essentially, they will use the data to identify providers/areas with questionable practices and then focus on these providers.  This allows them to "target" their investigations.  

Of course, smart criminals will account for this and strive to keep their billing within certain parameters or go wild, get as much as they can as fast as they can and get out before the investigators arrive.  (I don't mean to be negative, but my my years doing primarily criminal defense led me to conclude that "locks only keep honest people out.")  Another area they might focus on more is in the area of enrollment and controlling who gets into the system.  OIG mentioned this twice in testimony to Congress this year.  Although as with every other anti-fraud system, criminals can manipulate this one as well.  (Although as you make it harder and harder on the criminals, Medicare stops being "easy money.")

It is not clear how effective this will be, as one of the main topics of the Fraud Summit was the amount of fraud that is still being perpetrated on the Medicare/Medicaid system, even after the government's recent efforts to crack down on fraud. One speaker commented that the recent successes is simply the "low hanging fruit".  He was implying that there is much more fraud to be identified and stopped. Another issue that raises questions about the effectiveness of the programs is the statistic mentioned in the USA Today article - for all the additional fraud enforcement efforts, prosecutions are only up 2%.   

Regardless of whey prosecutions are only up 2% over last year, the real point from all of these articles is that HHS and the DOJ are continuing to ramp up their MEdicare fraud enforcement efforts.  This should serve as a warning to everyone in the home health and hospice industries.  The HHS/DOJ strikeforces and HHS in general are already focused on you.  They are now adding to the resources at their disposal to investigate and prosecute Medicare fraud.  

This means you should be focusing even more on your compliance efforts.  Given the ever increasing focus on reviewing claims data, a good place to start is auditing and monitoring your claims.  Are there any reasons your claims might stand out?  Do you have a large number of outliers?  Does your documentation support your billing practices?  These are the kinds of questions you should be asking yourself, especially now that you know what they will be looking at.  If you have not looked at your compliance plan in a while (or longer) now is an excellent time to start.  Fraud and Abuse enforcement is only going to become more aggressive in the future.  The time to prepare is now.

The RACs are coming

Well, it has taken some time, but the Recovery Audit Contractors have finally started posting issues that relate to home health and hospice. 

Health Data Insights, the Region D Recovery Audit Contractor (Region D covers: "Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, Wyoming, Guam, American Samoa, and Northern Marianas).  Has posted three issues related to hospice and home health.  One issue (Hospice Related services) was approved last September, the other two issue have been approved since December 22, 2009.  They all apply to claims billed after October 1, 2009

HDI has added two hospice related issues:  DME while in hospice and Hospice Related Services - B.  For both of these, Health Data Insights  explains that:"Services related to a Hospice terminal diagnosis provided during a Hospice period are included in the Hospice payment and are not paid separately."  The RAC will be looking at claims for DME and "Related Services" paid for separately by Medicare during a hospice admission.  Obviously, if it is equipment and services related to the terminal illness and was paid for outside of the hospice reimbursement, Medicare should not have paid for it again.

This audit will likely be triggered by an automated review.  They can churn through the numbers and identify claims submitted by non-hospice providers during a hospice episode. Whether or not a repayment is owed depends upon whether the claim is for DME or services related to the terminal illness.  The RAC cannot determine that simply by an automated review.   I say this, because, as anyone who has dealt with a hospice patient in a nursing home realizes, the question of what is and is not related to a terminal illness can often be disputed.  It requires looking at the documentation for the additional services and comparing to the terminally ill patient's diagnosis and needs.  Of course, if the hospice and the DME or other service provider both list the same illness, the issue becomes much simpler.

Health Data Insights has also added issues related to home health.  This issue is titled "Medical Supplies and Consolidated Billing".  Like the Hospice issue, this is an effort to identify services or supplies covered by the PPS episodic payment that were paid for separately.  For example, a patient receives physical therapy during a home health episode from a provider other than the home health provider - that is covered under the episodic payment and should not be billed separately.  This is another issue where the RAC can churn through the numbers and identify overlapping claims.  This is one that is actually easier for the RAC, because certain supplies and services are covered by the episodic payment, without much room to quibble.  (It's not like hospice where hospice patients can have other medical issues.)

Home health and hospice providers should be looking at their claims and trying to identify situations where other providers claims overlap for services that are covered under the payment they receive.  The RAC may pursue the entity that provided the additional service (which seems like the correct response to me), but they may come after the HHA or Hospice.  The best course of conduct is to attempt to avoid these overlapping claims.

Now that one RAC has identified home health and hospice issue, the others won't be too far behind.  You may expect to start seeing letters form the RAC (in region D at least for now).  When you receive a request for information, be sure to respond promptly.  One of my favorite statistics from the RAC demonstration was the percentage of claims recouped simply because the provider failed to provide documentation.  You should never have to pay back money because you just did not respond in time.  The government already pays you too little and routinely asks for more back - don't help them out by not being ready for the RACs.

The Massachusetts Election and HomeCare and Hospice

Well, by now, I am sure you are all aware that Scott Brown won in Massachusetts.  This is not a political blog, per se, but the news this morning is covering how Scott Brown's election will effect the passage of a number of bills that are of concern to the home health, private duty, and hospice industries.

The first issue getting a lot of attention is whether or not Scott Brown's victory is the death knell of health care reform.  Many Democrats appear to be signaling that it is time to back away from the current bills and rethink health care reform.  This article also has some great quotes about the status of health care reform after last night.   Some Congressional Democrats are saying everything should be put on hold until Scott Brown is sworn in (you can read that story here).  Barney Frank was quoted as saying they may need to start over.  Susan Collins even specifically mentioned starting over and getting away from a bill that included the steep cuts to Medicare.  These articles give a pretty strong impression that the current bills, which were terrible for the home health industry are dying, if not completely dead.  If this is the end of health care in its current form (which seems likely) the election last night may have saved the home health industry from the draconian cuts proposed by the House and Senate.

Of course, this is not done yet.  Providers need to keep a close eye on what is happening.  Until the bills are officially scrapped and Congress starts over, the cuts are not dead.  Furthermore, if Congress starts over, the home health industry will need to keep a close eye on what they propose and, if necessary, be ready to respond loudly and clearly (you may find your representatives more willing to listen now).  Based on today's reports, it seems that health care reform may ultimately go forward, but in a much different fashion.  If so, home health providers may be able to breathe a sigh of relief that the $55 billion dollars in cuts will not happen.   

Another area of interest to the home health, private duty, and hospice industry is the Employee Free Choie Act.  At least two outlets (here and here) are predicting that the election of Scott Brown is the end of the Employee Free Choice Act for this year.  Scott Brown was clear in his campaign that he was opposed to the EFCA.  This is another bit of great news for the industry. (Although it is only a prediction.)  This aspect of the election has not gotten much press, because of the focus on health care reform, but it appears that with the election of Scott Brown, supporters of the EFCA no longer have the votes they need to pass the bill. 

[There was an interesting side note during the campaign in Massachusetts.  SEIU members were out campaigning for Brown while SEIU's leadership was campaigning for Coakley.  Here is the video.  

This video says a number of things, but I like to think it shows that  the union's leadership is out of touch with its members.  Always a good point to raise when in the midst of a union campaign.)

Senator Kerry Continues Efforts on Behalf of Home Health Care

On Monday, Senator John Kerry sent a letter to Harry Reid, Max Baucus, Christopher Dodd, and Tom Harkin, urging them to "protect access to home health care" as they work to finalize health care reform legislation.  You can download the letter here.  The letter mentions that if the House cuts are enacted, by 2011 more than two-thirds of home health providers will be reimbursed for services at a rate that is less than the cost of care.  The letter does not state it explicitly, but the conclusion to be drawn is two-thirds of the Medicare home health providers will either go under completely or pull out of Medicare.

Unfortunately, the letter goes on to mention the Senate's proposed cuts as a "responsible level" for home health care cuts.  I continue to maintain that the Senate's cuts are very damaging to the industry, but I will concede they are less severe than the House's proposed cuts.  They are also phased in over a longer period of time, which gives providers more time to adjust (or retire).  Unless health care reform gets completely derailed (which, in my opinion, is the best outcome), the Home Health industry is going to end up with cuts.  The Senate bill simply denotes the floor of those cuts.

Today, in Roll Call, there was an article stating that the negotiators are facing real difficulties.  Due to this problem, they are not likely to have a final bill until February.  Some are indicating it may be even later than that.  This means there is still time to educate your representatives and Senators.  I know I keep beating a dead horse, but I fear that many in the home health industry may have simply accepted that these cuts are inevitable.  Ultimately, we may see these draconian cuts enacted, but as long as the bill is stalled on the Hill, you can continue to make noise.

Some of Senator Kerry's points in his letter are worth noting to your Senators and Representatives (you can mention that 32 of their colleagues in the Senate agree with these points):

    These cuts will reduce access to the home health care

    The populations served by home health are truly vulnerable

    People prefer to stay in their homes and receive care 

Another point to keep hammering away on is that home health care is very cost effective.  Why reduce access to cost effective care at a time when everyone wants to "bend the cost curve." Finally, you may want to reiterate the reality that home health providers do not operate with the margins that MedPAC thinks you do.  

I know I am repeating myself, but you need to keep trying to persuade your elected representatives that voting for these cuts will harm their constituents and cost Medicare more in the long run.  Until the bill is signed, there is still a chance we can change it and, at a minimum, get the lower cuts enacted in place of the House's cuts.