Posted by: Robert Markette
July 18, 2007
Topic: New from CMS

HHS has announced a new demonstration project to combat home health fraud. This demonstration project will begin in Los Angeles and Houston. HHSs goal is to prevent fraudulent home health agencies from entering into the Medicare billing system. The project was announced as a response to a number of Medicare billing issues in the target cities.

Medicare has noticed that billings in these two areas have increased by as much as sixty percent and the number of providers has increased by 150%. This has apparently cased HHS to become concerned that there are unlawful agencies entering the market and billing Medicare. The announcement does not specifically state what type of fraud they are targeting, but it implies that certain home health agencies are preying upon the elderly.

It appears that the agencies are using the elderly patients Medicare numbers to bill for services that are not provided or to perform some other fraud and HHS believes this fraud is related to an increase in the number of illegal home health agencies. As you can see from the project, they are especially concerned about ownership and strict compliance with Medicare requirements.

In order to combat this problem, the demonstration project will introduce a number of measures aimed at identifying illegal home health agencies and excluding them from the Medicare program. HHSs first step is to have agencies in the Los Angeles and Houston areas resubmit their provider applications. The announcement does not make it clear if all agencies will have to reapply, but does state that agencies will receive a notice to reapply. Agencies who receive the notice but do not reapply within sixty days of receiving the notice will have their Medicare billing privileges suspended.

Providers who have failed or in the future fail to report a change of ownership or change of address will have their billing privileges revoked. Any provider whom HHS determines has an owner, partner, director, or managing employee with a felony conviction in the last ten years will have their billing privileges revoked. Any provider that no longer meets each and every one of the provider enrollment requirements will have their billing privileges revoked. Finally, any HHA that underwent a change of ownership in the last two years will be required to undergo a state survey.

While the project is initially slated in only two areas, I cannot help but focus on the phrase demonstration project. Often, todays demonstration projects are tomorrows regulatory practices. This practice would create a great deal of additional burden on any provider who received a notice. It will be interesting to see how they determine who has to reapply.

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