Home Health Care Services--Tighter Fiscal Controls Needed

HRD-79-17: Published: May 15, 1979. Publicly Released: May 15, 1979.

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As of June 1978, there were 2,612 agencies certified by Medicare to provide home health care. A detailed audit was conducted at 11 home health agencies to verify that the costs claimed for Medicare were in fact incurred, allowable, reasonable, and properly reported. This review focused on proprietary and private nonprofit agencies.

GAO found wide variances and inadequacies in Medicare's reimbursement procedures for home health care. The management and clerical costs for two home health agencies in Louisiana that were comparable in size were $291,400 and $129,000. A comparison of two agencies in Florida showed wide variances in personnel salaries. The number of nonprofit home health agencies has grown significantly in recent years. One reason is because of the efforts of some for-profit organizations which assist in the establishment of such agencies and subsequently do business with them. GAO believes that there is program abuse because of the following examples: (1) the newly created agencies obtain services from the for-profit organizations without the benefit of competition; (2) the contracts of two for-profit organizations were for an excessive period of time, 35 years and 29 years; (3) some for-profit organizations used facilities of the nonprofit agencies to conduct their business at the expense of the Medicare program; (4) some services under the contracts may be unnecessary for providing home health services; and (5) frequent examples of self-dealing were noted between the for-profit organizations and the home health agencies.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary, HEW, should direct the Administrator, HCFA, to clarify and strengthen program instructions for the specific types of promotional activities that are allowable, and require providers to document the scope and nature of the duties of agency employees often designated as discharge planners or hospital coordinators.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Not Implemented

    Comments: The Office of Management and Budget refused to allow HCFA to collect the data necessary to implement this recommendation.

    Recommendation: The Secretary, HEW, should direct the Administrator, HCFA, to require that home health agencies provide specific reporting on the salaries and fringe benefits furnished to individual employees.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary, HEW, should direct the Administrator, HCFA, to emphasize to home health providers that prior approval is required for those fringe benefits not otherwise specifically authorized.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Not Implemented

    Comments: Because of its plans to propose a prospective payment system, the agency does not intend to act.

    Recommendation: The Secretary, HEW, should direct the Administrator, HCFA, to require intermediaries to routinely test, on a sample basis, provider adherence to the documentation requirements.

    Agency Affected: Department of Health and Human Services

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary, HEW, should direct the Administrator, HCFA, to emphasize to providers that costs claimed under Medicare must be documented.

    Agency Affected: Department of Health and Human Services

  6. Status: Closed - Not Implemented

    Comments: HCFA is developing a prospective payment system for home health services and is considering limiting individual cost elements under it. The agency thus does not plan to revise section 223 limits.

    Recommendation: The Secretary of Health, Education, and Welfare (HEW) should direct the Administrator of the Health Care Financing Administration (HCFA) to develop the cost limits under Section 223 of the Social Security Amendments of 1972 for individual home health care cost elements where this is appropriate.

    Agency Affected: Department of Health and Human Services

  7. Status: Closed - Not Implemented

    Comments: The report disclosed abusive contracting practices but recent legislative changes have made the recommendation moot. The Reconciliation Act of 1980 gives the Secretary of HHS access to the books of subcontractors who supply providers goods and services over $10,000 in a 12-month period. Also, Medicare reimbursement to home health agencies for contracts based on percentage are now prohibited.

    Recommendation: The Secretary, HEW, should direct the Administrator, HCFA, to require prior intermediary approval of home health agency contracts whose costs exceed a specified amount and/or whose term exceeds a specified period of time.

    Agency Affected: Department of Health and Human Services

 

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