GAO: CMS Must Contain Home Health Spending

A U.S. Government Accountability Office (GAO) report says improvements are needed to address improper payments in home health—indicating fraud and abuse are largely to blame for Medicare home health spending skyrocketing to $12.9 million in 2006.

“Spending on the Medicare home health benefit grew about 44 percent from 2002 through 2006, despite an increase of just less than 17 percent in the number of beneficiaries using the benefit during that five-year period,” said the GAO in a letter to Senator Charles Grassley.

The report does not say whether other factors were taken into consideration for the spending increase, such as rising home health costs, but does provide examples of where fraud has been detected.

The GAO says upcoding and other improper payments by some home health agencies (HHAs) contributed to the increase. Court cases and Office of Inspector General (OIG) actions illustrated that kickbacks and billing for services not rendered also contributed to Medicare spending and utilization.

Between 2002 and 2006, California, Florida, Louisiana, Nevada, Oklahoma, Texas, and Utah experienced the highest growth in Medicare home health spending or utilization; and were the focus of the GAO’s investigation.

The Centers for Medicare & Medicaid Services (CMS) does not generally include physicians in the agency’s efforts to detect improper payments claimed by HHAs. The GAO, however, recommended in its report that CMS (1) assess the feasibility of verifying all key officials’ criminal history on an HHA enrollment application; (2) provide any physician whose ID number was used to certify or recertify a plan of care with a statement of services the HHA provided to that beneficiary based on the physician’s certification; (3) direct contractors to conduct post payment medical reviews on claims submitted by HHAs with high rates of improper billing; and (4) amend current regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges, such as:

  • A pattern of submitting falsified claims
  • Persons who do not meet Medicare’s coverage criteria
  • Services that are not medically necessary

CMS stated it would consider two of the GAO’s four recommendations—to amend regulations to expand the types of improper billing practices and to provide physicians with a statement of services.


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