Home health agencies can avoid fraud charges with compliance plans

Medicare law provides some new protections

The Medicare Reform Act passed in 2003 contains a number of new demonstration projects and administrative requirements that affect home health agencies, but the good news is that the myriad new fraud targets the new legislation identifies don’t have as much impact on home health as other areas of health care, say experts interviewed by Hospital Home Health.

"The changes included in the legislation are actually good news for home health agencies," says Marie Infante, an attorney with Mintz Levin in Washington, DC. "There are more protections for providers who are accused of fraudulent claims," she says. Prior to passage of the 2003 legislation, providers accused of fraudulent claims had to make payments even if they were pursuing an appeal, Infante points out. "We were able to help one client who is filing an appeal to avoid payments until after the appeal is decided." This is one change to fraud and abuse regulations that definitely is welcomed, she adds.

Another aspect of protection for home health agencies is the acknowledgement that information given by representatives of Medicare should be accurate, Infante explains. In other words, if you or another staff member asks a billing question or asks a Medicare representative for instructions on how to handle a particular issue on a claim, and you follow those instructions, you will not be held liable if the information given to you is incorrect, she says. "This law recognizes the fact that you asked for information, and you followed the instructions given."

Even with this protection, an agency staff member must take some extra steps to document the process, Infante adds. "Be sure to maintain logs and put the information in writing," she says. "Send an e-mail or a letter to the person giving you the information and state, Per your instructions, I am proceeding in the following manner,’" she adds. Keep a copy of the correspondence and the log that includes name of person, date, and time of conversation, Infante says.

Even though new fraud risks for home health agencies may not be contained in the latest legislation, be sure to stay aware of the most common risks for home health agencies, says Kevin McAnaney, Esq., a Washington, DC, attorney. One of the more common red flags for fraud investigations is a pattern of overpayment of claims, he says.

Although mistakes can be made, home health agencies need to remain diligent in staff education, review of claims prior to submission, and audits of claims paid, McAnaney suggests.

"Be sure your employees understand how to code claims properly and be sure the documentation for the codes is complete." While the Centers for Medicare & Medicaid initially will treat overpayments as mistakes, a trend of overpayments might generate a closer investigation, he adds.

Beware of business arrangements with hospitals that want to set up turnkey subcontractor arrangements, McAnaney warns. Even though most hospital-owned agencies or hospital-affiliated agencies represent legitimate relationships, an agency needs to be wary of some new business opportunities, he says. "There have been cases of hospitals that set up a home health subsidiary, then contracted with an existing agency to provide all home health services."

If the hospital merely is contracting with a home health agency in an effort to capture referrals from the agency when hospitalization is necessary, this is a fraudulent relationship, he adds. Home health agency managers should have an attorney carefully review any contract to ensure that proper protection is in place to minimize the risk of fraud accusations for the agency.

Another area that must be reviewed carefully has to do with home health agency relationships with other organizations in the community, notes McAnaney. Just as a home health manager would want any contracts with hospitals to minimize fraud risks, any agreements with organizations, such as assisted-living facilities, nursing homes, or senior centers, need to be reviewed carefully, he says.

"Be sure the services you provide don’t imply an obligation on the part of the other organization to direct home health referrals to your agency," McAnaney says.

If you do enter into an agreement that can be construed as a kickback arrangement, the penalties can be high, he points out. The Department of Health and Human Services has been referring more kickback claims to the Office of the Inspector General to pursue as civil cases with monetary penalties, he says.

"The penalty is $50,000 per case of kickback and three times the amount of kickback." Because the charges are heard in an administrative procedure rather than a court of law, it is easier for the government to prove its case, he says. In addition to the monetary penalties, any agency found guilty of accepting kickbacks can be excluded from Medicare, McAnaney explains.

"A home health agency can avoid accusations of kickbacks by making sure your arrangements don’t involve lavish gifts to physicians or managers of other organizations, expensive entertainment at meetings, or free services that exceed what you typically provide," he recommends.

"Also, if you do offer services in an assisted-living facility and you rent a room in which you provide the services, be sure the rent you pay is in line with fair market value in the area," adds McAnaney. Billing for unnecessary or undelivered services is another hot spot for home health agencies, he says. "This is the classic fraudulent claim in which the agency simply bills for services that were never delivered."

"Documentation is key to protecting yourself from charges of fraud," Infante adds. "Nurses know when their patients need additional services, but without the physician’s order authorizing those services, you will have compliance problems," she says.

The best protection for any home health agency is an effective compliance plan that all employees know and understand, McAnaney stresses. "It’s not enough just to write a plan. Make sure your staff are well-trained in their job responsibilities, and that you have appropriate employees monitoring chart audits, claims processing, and employee evaluations."

[For more information, contact:

  • Marie Infante, Attorney, Mintz Levin, 701 Pennsylvania Ave. N.W., Washington, DC 20004. Phone: (202) 434-7489. Fax: (202) 434-7400. E-mail: MCInfante@mintz.com
  • Kevin McAnaney, Esq., Law Offices of Kevin McAnaney, 1800 K St. N.W., Suite 720, Washington, DC 2006-2202. Phone: (202) 457-0494. Fax: (202) 457-6636. E-mail: Kevin@mcaneylaw.com]