Fraud still an issue after home health ban lifted

Investigations could lead OIG to your door

The recent lifting of the ban on new home health businesses doesn’t mean there will be any let up in the federal government’s efforts to combat fraud in the industry, the White House cautions. Home health plans still are under intense scrutiny that could lead to investigations in other parts of your health care operation.

President Clinton recently ended the moratorium imposed in September 1996 on new firms providing home health care services to the elderly under Medicare, saying the recent anti-fraud measures had worked well enough to loosen the reins a bit. He declared for the first time a six-month moratorium on the admission of new home health care providers into Medicare. Home health has been the fastest-expanding part of Medicare, with nearly 100 new providers entering the Medicare program each month. He also announced that the Health Care Financing Administration (HCFA) will re-enroll home health providers every three years as a means of aggressively scrutinizing them to screen out the "bad apples" and "fly-by-night operators."

The U.S. Department of Health and Human Services also is implementing new regulations that make it easier to kick out home health providers even if they haven’t been convicted of fraud. HCFA will nearly double the number of comprehensive home health agency audits it performs every year from about 900 to 1,800, along with increasing the number of claims reviews by 25%.

And now that the moratorium is lifted, new home health operations will be required to post a surety bond of at least $50,000. The new rule is intended to eliminate some fly-by-night operations that don’t have enough money to post the bond.

Other new rules will guard against fraud by companies selling medical equipment to senior citizens. Medical equipment purchases accounted for about $6 billion of Medicare’s budget in 1997. New regulations announced recently by the White House will require medical equipment suppliers to have a physical office that senior citizens can visit and a listed telephone number. The rules also prohibit telemarketing.

Clinton also revealed this list of 10 legislative proposals to combat health care fraud:

1. Eliminate wasteful, excessive Medicare reim-bursement for drugs. Medicare has been paying double the wholesale price for some drugs — 10 times the wholesale price in one case.

2. Eliminate overpayments for Epogen, a drug used for kidney dialysis patients. Paying the current market price would save Medicare and beneficiaries $100 million a year.

3. Double the number of audits to ensure that Medicare reimburses only for appropriate provider costs.

4. Lower Medicare’s payments for equipment via a nationwide competitive pricing program.

5. Eliminate abuse of Medicare’s outpatient mental health benefits. In particular, Medicare would no longer reimburse for mental health benefits provided in inpatient hospitals or homes.

6. Create civil monetary penalties for false certification of the need for care.

7. Prevent providers from taking advantage of Medicare by declaring bankruptcy.

8. Take action to end illegal provider kickback schemes.

9. Ensure Medicare does not pay for claims owed by private insurers.

10. Enable Medicare to capitate payments for certain routine surgical procedures through a competitive pricing process with providers.