Home Health News

Achieving and maintaining compliance has always been high on the goal statements of every legitimate home care agency. Today, compliance is quickly becoming a survival issue. To help readers sort through current challenges, we traveled to Boston to interview Denise Bonn, Deputy Director of NAHC’s Center for Healthcare law, and sit in on her comprehensive presentation to that association’s Financial Managers meeting.

Read part one of the series here, and part two here.

In addition to Recovery Audit Contractors, the newest weapon in the arsenal CMS uses to reduce improper payments caused by fraud, abuse and inadvertent documentation errors, the federal agency responsible for Medicare and Medicaid payments has other agents looking over your claims and patient charts. It would be wise to guard your wallet not just from the newest threat but to be watching out for the old ones as well.

A comprehensive system to protect taxpayers and the Medicare Trust Fund from running dry too soon includes:

1. oversight and review of your claims for services rendered,
2. the ways in which you obtain business (referrals) and
3. your compliance with provider enrollment requirements.

1 — FOUR CLAIMS REVIEW LEVELS

PSCs, ZPICs, RHHIs and MACs
Your first line of threat is the government contractor you deal with most frequently, the Regional Home Health Intermediary (RHHI), more often referred to as a fiscal intermediary or FI. These are insurance companies who have bid for and won a government contract to process your claims and pay you for them with Medicare’s money. They earn a percentage of what they process and, it has surfaced recently, they have a denial quota. They can lose their contract if they do not deny enough claims.

For a complete explanation of FI denials and your recourse through the appeals process, see our Payment Denials and the Appeals Process: A Pre-RAC Primer.

In brief, when your FI examines your claims – first with computer edits, automatically, then manually through the ADR system – they are looking for broad anomalies. Are there peaks of utilization where you stick out from everybody else? Are there payment peaks for a single beneficiary?

“This does not mean you have done anything illegal,” attorney Bonn told her audience, “but from their experience they have noticed that professional criminals who are good at Medicare fraud do produce occasional utilization peaks. So they have to look more closely, even when they catch a legitimate one. This is true for Medicare and Medicaid both.”

She added that, after denying individual claims, your FI has the right to then expand that sample to the broader universe of claims and extrapolate a much larger payback amount.

Today, most of the detailed work of finding reasons for a denial come from Program Safeguard Contractors (PSC). Also commissioned to identify potential fraud, this task force grew out of the integrity units within each FI. CMS spun them off with contracts of their own, leaving FIs free to focus on claims and education.

PSCs are not limited to home care claims but have access to all Part A & Part B claims data. During a focused medical review, they are able to examine home care payments in light of how many doctor visits an individual patient had. They know if the patient had a hospital or rehab stay. “I have seen them looking at high therapy utilization since 2005,” Bonn commented, “which should not surprise anyone. Now they are looking closely at outlier cases as well.”

Bonn emphasized that hospices have been of particular interest to PSCs. “They examine long lengths of stay,” she said. “It has been driving that industry crazy with regard to certifications of terminal illness. If you provide excellent care and if the patient survives more than six months, they question whether your services were ever actually needed in the first place.” This is the very definition of Catch-22.

Zone Program Integrity Contractors
ZPICs are charged with identifying potential fraud, taking over some functions from PSCs in 2008. In the near future, they will be given a broader scope again, taking on jurisdiction over Part D, Managed Care, Medicare Advantage (Part C) and, eventually, Part A cost reports and reimbursement. They will have access to a patient’s entire claims data for all types of Medicare services.

One structural difference will be that, as fraud specialists, they will operate in five fraud “hotspot zones.” They will be tied to the jurisdiction of existing PSCs but focus on quick response to fraud and administrative action in California, Florida, Illinois, New York and Texas, plus two other states with limited incidence of fraud, for purposes of comparison.

Two ZPIC contracts have been awarded so far, to Safeguard Services, LLC for Zone 7 (FL) and Zone 4 (TX). Their payment denials will result from claims analysis, cost reports, PS&Rs and complaints from the public and from employee whistle-blowers. They are looking for aberrant billing patterns outside the norm, such as high utilization, high-cost services or items, high numbers of claim denials. Agencies most at risk will be those continuing to bill improperly after having been hit with a number of denials.

Medicaid Integrity Program
Not to be confused with Medicare Program Integrity, these contractors perform state-level audits. Rules they live by – and, consequently, advice for providers to follow, vary by state. Medicaid payment structures can be quite technical. It lands on the agency owner’s shoulders, or his or her delegate, to be familiar with state requirements and keep up with changing regulations.

“There are skilled services, unskilled services, waivered services and minor details to watch for,” Bonn explained. “You can be denied over minor details such as discrepancies in the date between what a physician and a nurse wrote down, and changed or missing last names of a caregiver.” She offered one extreme example that turns out not to be uncommon. A hospital in a certain town removed itself, including its home care affiliate, from doing any Medicaid business. When the other home care provider in the area took over that agency’s caseload, it naturally experienced a utilization spike. That triggered a comprehensive fraud audit.

The program recently announced an enhanced program. The “Comprehensive Federal Medicaid Fraud and Abuse Strategy” will deploy contractors to audit healthcare providers. With support and guidance from CMS, they seem to have plentiful resources. They are in the process of hiring additional auditors of two types. One will examine claims and determine what types should be targeted. The other will select which providers to audit, based on the other group’s targets. There is no word yet about their plans for home care.

State-based False Claims Acts
To conserve resources at Federal Attorney offices, OIG has created an incentive for states to police their own Medicaid payments. States that pass a law comparable to the federal False Claims Act and have it approved will receive a percentage of payments they recover with their own auditors. Thus far, 14 states have had their false claims laws approved.

2 — IMPROPER REFERRALS
“Congress is upset; CMS is upset; the OIG is upset,” Bonn declared, “and they are looking to make an example of someone, or of an entire industry.” Looking to find out how fraud happens, she explained, they found providers, especially in the hotbed areas around Miami-Dade, Houston and Los Angeles:

• making direct cash payments to Medicare beneficiaries
• making payments and in-kind favors to referral sources to induce referrals
• making payments to beneficiaries to influence their agency selection

Conviction on one of more of these offenses can result in immediate expulsion from the Medicare program for up to 10 years, plus penalties and fines, treble damages and jail time. At the same time, honest agencies have to deal with web sites where disgruntled employees can find forms to fill out and lawyers to help them turn in their employer under whistleblower rules, with or without legitimate claims. With the government’s bias toward finding fraud, they lean today toward believing all whistleblower reports until the accused agency can prove otherwise, at its own considerable expense.

3 — OWNER ENROLLMENT VIOLATIONS
The government will use a familiar process to identify owners that do not comply with enrollment requirements. They begin with known criminals, learn how they do what they do, and look for similar activities on the part of otherwise genuine home care providers who might commit a violation due to oversight or ignorance.

Violations the enforcement agencies have learned to look for, Bonn reported, include:

• Most recent 855A filing that fails to reflect current operations. Many who enter home care for the purpose of committing fraud do not report ownership changes, acquisitions and mergers within 30 days, as required, if ever.
• All practice locations must be properly reported as a parent, branch or sub-unit. They must be reported through the provider enrollment process, not just to one’s state agency.
• Even failing to report changes of your Director of Nursing and administrator within 90 days could result in revocation of billing privileges.

The best defense is a good offense
Attorney Denise Bonn followed her comprehensive descriptions of home care and hospice compliance risks and payment denial threats with an equally comprehensive plan of action. Click here to go to our report on her strategic plan to address your risk areas and build a compliance plan.