Home Health & Hospice Week

The Centers for Medicare & Medicaid Services is beefing up its program integrity efforts in the face of overwhelming fraud and abuse cases -- and your agency could be the next one in the spotlight if you don't heed the warning.

CMS outlined these two program integrity initiatives in its proposed rule on 2010 payment rates under the home health prospective payment system published in the Aug. 13 Federal Register:

1) Prohibition on sharing of practice location;and

2) Establishment of survey requirement for all sales or transfers of ownership within three years of enrollment in Medicare.

CMS intends the initiatives to improve its ability to verify that agencies meet minimum enrollment criteria, ensure that agencies correctly sell and transfer their businesses, and to help agencies improve the quality of care they provide beneficiaries.

While not all industry insiders are happy about the initiatives, the integrity efforts aren't coming out of left field. "These initiatives are clearly tied to the types of fraud and abuse that CMS, the Office of the Inspector General and the Department of Justice are finding in home care in California, Texas, Florida, and Michigan," says Chicago-based regulatory consultant Rebecca Friedman Zuber.

"Sadly, Illinois is the next target," she predicts.

Consider this: Medicare spends more on home health in Texas than any other state -- 9 percent more than in Louisiana, 18 percent more than in Florida, and 41 percent more than in California --yet the quality of care is consistently ranked as the lowest, according to a Government Accountability Office investigation.

The investigation also found a 144-percent increase in home care spending (more than three times the national average) and a 102-percent increase in the number of agencies billing Medicare (compared with 29 percent nationally). With whopping statistics like these, and cases like that of a Texas home health provider who billed Medicare for more than $6.5 million in care that was never given, CMS feels compelled to crack down on waste, fraud, and abuse, experts say.

These new initiatives are designed to guarantee that an actual transaction occurred and that core resources aren't inappropriately blended, says Lynda Laff with Laff Associates in Hilton Head, S.C. For instance, there are many situations where agencies are allegedly sold, but only the agencies' names change. Or they are sold to family members, but the original owners still call the shots, she notes.

No one wants to see fraudsters steal Medicare dollars, but these new initiatives could hurt even the law-abiding agencies, Zuber points out. For instance, there are "legitimate and essential reasons for more than one HHA, or an HHA and a supplier, to share a practice location," says the National Association for Home Care and Hospice (NAHC).

Similarly, "surveying all agencies that are bought or sold is a legitimate practice, but prohibiting the sale of an enrolled agency within the first three years of operation is unreasonable," Zuber explains.

Better: Rather than flat-out denying agency owners the opportunity to shed businesses if they want to, "CMS could conduct its survey and then take action to deny a new owner's enrollment if it finds foul play," Zuber suggests.

Blame: Unfortunately, "CMS allowed these unscrupulous providers to go unchecked for so long that it must now police the industry a bit," Laff says. Agencies on the up-and-up must perform their ue diligence and ensure they meet all certification rules -- but that's "only onerous to the crooks," she claims.

Downside: CMS' crackdown now is "like shutting the barn door after the horse got out," Laff says. Though there are really good reasons for strict program integrity initiatives, the proposed rules "will probably be overkill on those providers who make honest mistakes," she warns.

Resources: Read NAHC's opinion of the initiatives at www.nahc.org/tango/report/mbrs/MBRsearch.taf?function=detail&artKey=090831nr-1.