Medicare Home Health Agencies:

Certification Process Ineffective in Excluding Problem Agencies

HEHS-98-29: Published: Dec 16, 1997. Publicly Released: Jan 15, 1998.

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Pursuant to a congressional request, GAO reviewed how the Health Care Financing Administration (HCFA): (1) controls the entry of home health agencies (HHA) into the Medicare program; (2) ensures that certified HHAs continue to comply with Medicare's conditions of participation and associated standards; and (3) decertifies HHAs that are not complying with Medicare's requirements.

GAO noted that: (1) becoming a Medicare-certified HHA is relatively easy-- probably too easy, given the large number of problem agencies identified in various studies over the past few years; (2) if HHA owners have not been previously barred from Medicare, they can obtain certification without having any health care experience; (3) although such entrepreneurs can hire qualified health care professionals, Medicare's initial certification survey is so limited that it does not provide a sound basis for judging an HHA's ability to provide quality care; (4) although certified HHAs must be periodically recertified, serious deficiencies in the process allow problems to go undetected; (5) HCFA recertifies HHAs by screening them against a subset of the conditions of participation, but when surveyors assessed 44 targeted HHAs against all applicable conditions of participation, almost half had problems serious enough to warrant decertification; (6) many HHAs operate branch offices, but these offices are not subject to the same oversight afforded the parent offices; (7) HHAs are resurveyed every 12 to 36 months, depending on a variety of factors, but rapid growth and high utilization rates, which may indicate potential problem HHAs, are not included among those factors; (8) once certified, HHAs have little reason to fear that they will suffer serious consequences from failing to comply with Medicare's conditions of participation and associated standards; (9) few problem HHAs are terminated from the program; instead they are provided repeated opportunities to correct their deficiencies, even if the same deficiencies recur from one survey to the next; and (10) moreover, HCFA has not implemented a range of penalties to sanction problem HHAs, even though the Congress provided it the authority to do so over 10 years ago.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA revised its initial certification policy on January 14, 1998 to require that a home health agency must have provided care to a minimum of 10 patients before an initial certification survey is conducted.

    Recommendation: The Administrator, HCFA, should establish minimal requirements for how long a HHA must be operational and how many patients it must have treated before it is eligible to be surveyed and certified. HCFA could grant exceptions to such a national policy for those situations in which HHAs treat few patients and access to home care is an issue.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Not Implemented

    Comments: Although HCFA does not oppose the recommendation, the Administrator responded that implementing the recommendation would impose a burden on the state survey agency and on HCFA's survey and certification budget.

    Recommendation: The Administrator, HCFA, should require that HHAs be certified to provide only those services for which they have been surveyed; the addition of a new service should prompt a recertification survey.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  3. Status: Closed - Not Implemented

    Comments: HCFA believes that its targeting criteria are adequate.

    Recommendation: The Administrator, HCFA, should establish targeting criteria to select HHAs for survey against all conditions of participation. These criteria should ensure that all HHAs are periodically assessed against all conditions of participation.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  4. Status: Closed - Implemented

    Comments: In March 2001, CMS revised the State Operations Manual to require that branch offices be periodically included in or replace the standard survey of a parent HHA or of an HHA subunit with branches. Also, the Manual now requires that recertification surveys be routinely conducted at a branch office when the branch office serves more patients than the parent office and that state surveyors visit all locations of an HHA during the survey whenever possible.

    Recommendation: The Administrator, HCFA, should require that branch offices be periodically surveyed to ensure that they meet Medicare's definition of a branch office and provide quality care in accordance with the conditions of participation. HCFA should develop criteria, such as the number of patients served by a branch office relative to the number served by the parent office, that would help surveyors select which branch offices should be surveyed as part of a HHA's recertification.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  5. Status: Closed - Not Implemented

    Comments: CMS' revised State Operations Manual now requires state surveyors to select some records and/or schedule some home visits to patients that are served by each branch office. However, CMS does not collect and maintain data that would allow it to monitor whether state surveyors are conducting some home visits with patients served by branch offices, since its survey data in OSCAR does not link branch and parent HHAs. In June 2002, GAO reported that 23 percent of surveys in six states that it reviewed did not have the required number of home visits (see GAO-02-382.) In that report, GAO recommended that CMS develop more specific criteria and procedures for surveying branches and that CMS track survey results.

    Recommendation: The Administrator, HCFA, should monitor state surveyors to ensure that they conduct home visits with patients treated by HHA branch offices. Additionally, HCFA should develop criteria defining how surveyors are to select branch office patients to visit.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  6. Status: Closed - Implemented

    Comments: CMS' revisions to the State Operations Manual now require state agencies to re-survey an HHA within 12 months of its last survey if the agency was included in a state, regional, or national fraud and abuse initiative. The revisions also direct state surveyors to review reports generated from the OASIS assessment data, such as case mix adverse events and risk adjusted outcome reports, as part of their pre-survey preparation and off-site monitoring activities. Also, CMS supports coordinated investigation referrals between fiscal intermediaries, the HHS OIG, and the state survey agencies.

    Recommendation: The Administrator, HCFA, should revise the survey frequency criteria to include consideration of other factors that may indicate problem HHAs, such as rapid growth and high utilization patterns. As part of this effort, HCFA should establish procedures for contractors to routinely provide state survey agencies with information that would help them assess compliance with the conditions of participation.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  7. Status: Closed - Not Implemented

    Comments: As of July 2015, CMS did not provide further updates and GAO considers the matter closed.

    Recommendation: The Administrator, HCFA, should issue implementing regulations regarding the intermediate sanctions authorized by the Congress that allow for penalizing and terminating HHAs that are repeatedly out of compliance with Medicare's conditions of participation.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

 

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