Medicare:

Need to Hold Home Health Agencies More Accountable for Inappropriate Billings

HEHS-97-108: Published: Jun 13, 1997. Publicly Released: Jun 23, 1997.

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Pursuant to a congressional request, GAO reviewed Medicare's ability to detect and prevent inappropriate payments to home health agencies, focusing on: (1) the weaknesses of existing Medicare controls over the home health benefit; (2) lessons learned from examining private insurers' controls over home health payments and recent federal antifraud initiatives; and (3) a management approach that could improve Medicare's ability to avoid substantial payments attributable to abusive billing practices.

GAO noted that: (1) GAO and others have reported on several occasions about problems with Medicare's review of home health benefits; (2) yet, in spite of the need for increased scrutiny indicated by these reports and by the growth in home health expenditures, Medicare's review of home health claims decreased in the 1990s; (3) in GAO's test of just 80 high-dollar claims that had been processed without review, the Medicare claims-processing contractor, after examining each claim and supporting documentation, denied more than $135,000 in charges, about 43 percent of total charges, for 46 of the claims; (4) these findings are consistent with prior federal investigations, one of which estimated that in the month of February 1993 alone, Medicare paid $16.6 million for home health claims in Florida that should have been disallowed; (5) the five private insurers GAO contacted use controls that, although not readily adaptable to Medicare's coverage terms or billing rules, are nevertheless instructive regarding the monitoring of claims; (6) the insurers employ professional staff, such as nurses, to determine in advance the legitimacy of the request for home health services; (7) in contrast, the Health Care Financing Administration (HCFA) relies on home health agencies' compliance with administrative procedures, such as obtaining a physician's signature for ordered services, to safeguard against the submission of improper claims; (8) while Medicare does not have sufficient administrative funds to undertake the intensity of claims monitoring done by the private insurers GAO reviewed, the vigilance of private insurers suggests the value of applying more scrutiny in this area; (9) reduced funding for payment safeguards in recent years helps explain the marked absence of adequate claims reviews by Medicare contractors; (10) new and more stable funding provided through the Health Insurance Portability and Accountability Act should help improve Medicare's performance in monitoring home health payments, but HCFA also needs an enforcement tool that will make providers accountable for the propriety of their claims; (11) therefore, GAO is suggesting that the Congress consider directing HCFA to test an approach that would systematically identify and penalize providers that habitually bill Medicare inappropriately; and (12) under this approach, billing offenders would be identified and, if found to have excessively high billing errors, those offenders, rather than the taxpayer, would be required to shoulder the cost burden of investigative claims reviews.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The appropriation and authorization committees are not considering the imposition of audit user fees and there is no current HHS budget proposal for FY 2000 for audit user fees.

    Matter: To hold home health agencies more directly accountable for billing Medicare appropriately, the Congress may wish to consider enacting legislation directing HCFA to carry out a pilot demonstration to address the issue of abusive billing practices by home health agencies. Under such a demonstration, once improper billing has been detected that identifies an agency as an abusive biller, follow-up audit work would be conducted and the cost of this follow-up work would be assessed against the home health agency.

  2. Status: Closed - Not Implemented

    Comments: The appropriation and authorization committess are not considering the imposition of audit user fees at this time and there is no current HHS budget proposal for FY 2000 for audit user fees.

    Matter: To make such claims audits financially feasible, the Congress may wish to earmark monies from the assessed audit costs for HCFA's payment safeguard activities.

 

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