Recovery Audit Contractors Coming to Home Health?
Posted by: Robert Markette
December 13, 2006

According to an article in this weeks Home Health Line?, the recovery audit contractors (RACs) experiment that has been going on in Florida, California and New York may soon expand into home health.  For those of you who don?t know, Medicare has been in the midst of a demonstration project intended to gauge the success of using third party collectors who are paid on a contingency basis to audit providers.  The RACs audit Medicare providers, identify inappropriate payments and collect the payments.  The RAC then receives a portion of the proceeds collected.  As originally implemented, the RAC demonstration did not include home health or hospice providers.

However, due to the amounts of money that have been recovered, Medicare is considering expanding the scope of the program.  The providers who have been subjected to the current program are, not surprisingly, opposed to it.  

From Medicare?s standpoint, a contingency arrangement makes sense, much like an individual with a personal injury claim, if CMS does not get anything, neither does the Auditor.  Of course, this overlooks a key point, CMS is not like a person with a personal injury claim.  The whole idea behind a contingency fee arrangement is that it provides access to the court for those who might not otherwise be able to afford counsel.  CMS has taken it to the next step of hey it allows us to put more auditors out there, without spending more of our budget.  But the government has vastly greater resources than the average individual, if they can not afford to pay an auditor by the job, maybe they need to reevaluate their budget.  (Of course, I think that a budget is one way the power of an administrative agency is limited.)

An audit is supposed to be performed by an independent (and neutral) party according to set standards.  When the entity performing the audit is getting paid based upon what it recovers, the party being audited has a legitimate basis to question the neutrality (and integrity) of the auditor and the audit process.  It is a fair assumption by the providers that an auditor whose paycheck is dependent upon the amount he recovers may ?overreach? on audits.  It is also fair to argue that CMS has chosen this option to provide an incentive to auditors to recover more money.  

It appears that a large number of appeals have been filed as a result of this process, but Home health line did not mention if the number of appeals was higher than before.  If the RAC system allows for more audits, you would expect more appeals, but if the percentage of audit results that were appealed was higher, that could argue in favor of ending the process.  If the RAC allows CMS to perform more audits, but more of these audits are appealed, it may cost CMS more in time and money to fight the recoupment appeals than it would to simply hire and pay auditing contractors.

Similarly, if a larger percentage of the appeals are successful, this could raise some serious questions about the fairness of the process and overreaching by auditors.

Ultimately, CMS should be just as concerned about providing an audit that is fair in substance and appearance.  The RAC program, regardless of its intentions and goals, sends all the wrong message to the provider community and creates an audit process that leaves providers feeling that CMS is ?out to get them.?  The RAC program should be stopped and CMS and Congress should think harder about what the term ?audit? actually means.  Because this program comes up for review when Congress reconvenes, providers and state associations should keep an eye out and be prepared to contact their representatives, to make sure the RAC process stays out of home health and hospice.  Home health and hospice providers have enough to deal with already.

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Home health episodes, third party providers, and unexpeccted bills
Posted by: Robert Markette
January 09, 2006

During the course of treating a home health patient, a home health agency will receive a bill from a hospital or other provider for services provided to one of the agencies patients.  For example, I have had clients receive a bill from a hospital for providing a physical therapy evaluation and/or physical therapy treatment.  The bill arrives at the provider’s office with a note explaining that under the home health PPS system, because there is an open home health episode, the agency is responsible for paying for the provided therapy. 

If the agency did not direct the client to the provider as part of an under arrangements agreement, the agency is usually surprised to receive this bill.  This surprise is often due to the fact that the agency could have provided the service if they had been notified that the patient needed the service.

If you receive such a bill, the first thing you should do is check that there is, in fact, an overlapping episode.  I have had clients call after receiving a letter like this and in the process of reviewing the claim, determined that patient was not in a home health episode at the time of the other service.  CMS had either not received notice or had not processed the notice of the termination of the home health episode.  

In other cases, their was an open episode and the patient had been referred for Physical therapy, but had received it from a different provider.  The provider received the referral, provided the therapy, and discovered when they went to bill for the therapy that the patient was on an open PPS episode.  This is unfortunate, because there are two places at which this could have been avoided.  First, the patient’s physician is often the one who referred the patient for the additional care.  The physician should know that the patient is receiving care from the agency and should simply contact them about the need for additional care.  The agency could then modify the plan of care and have the physician sign off on the changes.  You should talk to the physician’s who refer patients to you and educate them about what services are covered under the home health benefit and advise them that when such a service becomes necessary, the physician should contact the agency.

You should also make referring physicians aware that, because these services are part of the home health benefit, if your agency is not equipped to provide them directly, it will have contractual arrangements with other providers to providers these services.  Furthermore, because of these relationships, the agency is in a better position to keep track of the services provided and follow up.  In contrast, if the physician simply refers the patient elsewhere, the agency will not have any idea about these additional services, which may require a change in the home health plan of care.

The other issue in these cases is that the provider could have checked with Medicare prior to providing the service.  This does not seem to be a common practice amongst hospitals and therapy providers, but I have been told my a number of individuals that it is actually a simple matter to check if the patient is on a home health episode.  This is really no different that checking that an individual is covered by health insurance before providing care.  A quick check up front would eliminate a lot of headaches later for all of the parties involved.

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Indiana - Medicaid Waiver Recoupment Update
Posted by: Robert Markette
January 04, 2006

As I have mentioned previously in this space, Indiana's Family and Social Services Administration restarted its audit of waiver providers.  In addition to performing new audits, audits that were appealed under the old system were to be reviewed using the new standards and revised recoupment requests issued based upon these reviews. 

 Although it was not clear exactly how these new standards differed, and, frankly, many providers believed there were no changes, it appears that the review is resulting in changes to recoupment requests.  The revised requests have started arriving in provider’s mail boxes.  (Actually, some began arriving last week and earlier, Merry Christmas.)  So far, the providers who have received revised recoupment requests have discovered the requested recoupment is significantly lower than the previous request.  Although this does not mean that every provider will benefit in this way, it does provide hope that the new audit process will be more fair to providers.

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New York Medicaid Recoupment
Posted by: Robert Markette
December 13, 2005

In a recent Medicaid recoupment appeal, a New York court ruled that the State Medicaid agency improperly continued to recoup funds from a provider, because it failed to provide a hearing within ninety days as required by state law.  Under New York law, the Medicaid agency may begin recouping funds prior to a hearing, but must then hold the hearing within ninety days or stop recouping the funds.  Matter of Visiting Nurse Service of N.Y. Home Care v. New York State Department of Health, 2005 WL 3091164 (N.Y.) (N.E. reports citiation not available.)

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