News From Home Care

Self-disclosure overtaking integrity agreements

Corporate integrity agreements are falling out of fashion in favor of self-disclosure requirements contained in corporate compliance guidelines. The Department of Health and Human Services’ Office of the Inspector General (OIG) announced in March that the size and scope of CIAs would be scaled back in lieu of existing compliance programs.

The shift in focus was revealed in a March 9 letter to HHS Inspector General June Gibbs Brown. To date, more than 4,000 health care providers have entered into CIAs, but their expanding requirements were beginning to annoy providers. Since the OIG has begun issuing voluntary compliance guidelines in various segments of the health care industry, more than 70 health care professionals have disclosed potentially abusive conduct. While a small number, it represents an increase since Brown expanded the program.

Hospices recently were issued compliance guidelines that emphasized the creation of an effective compliance plan, which included a process in which a designated compliance officer oversees the organization compliance program and reports potential billing problems.

The shift from CIAs to compliance guidelines shows the extent to which OIG wants providers to develop effective compliance programs.

"If the self-disclosing provider has demonstrated that its compliance program is effective and agrees to maintain the compliance program as part of the False Claims Act settlement, the OIG said it may not even require a CIA," said Brown. "In those cases, where in our judgment, it is necessary to require the self-disclosing provider to enter into a CIA, the provider may need to make only limited changes to its existing policies and procedures to meet most of the requirements of the CIA."

Congress may eliminate 15% reduction in PPS

It seems that home health agencies will be spared the 15% reimbursement reduction that had been a cornerstone of the Health Care Financing Administration’s (HCFA) impending prospective payment system.

In March, the U.S. House of Representatives passed its version of the 2001 budget that included a call to both House members and the Senate to work together to avoid implementation of the 15% reduction in Medicare home health outlays still scheduled to be implemented in 2001.

Home care advocates seem to believe the tide in Congress has turned after the Congressional Budget Office (CBO) estimated sharp decreases in reimbursement since the implementation of HCFA’s interim payment system. The CBO estimated that outlays plunged almost 45% between fiscal years 1997 and 1999.

"We are getting positive feedback from Congress about eliminating the additional 15% reduction," said a home health lobbyist.

One of the more promising signs includes House Budget Committee Chairman Rep. John Kasich (R-OH) and House Ways Means Health Subcommittee Chairman Rep. Bill Thomas (R-CA) apparently backing away from their joint effort to include the 15% reduction.

The issue is far from being a foregone conclusion. Rep. Bob Weygand’s (D-RI) amendment to add $72 billion to the 2001 budget that would have essentially erased the 15% reduction was defeated along party lines. The move did, however, prompt Kasich to promise to discuss the issue further with Thomas.

NAHC details a crowded agenda

The Washington, DC-based National Association for Home Care (NAHC) on April 2 outlined a busy legislative and regulatory agenda as home health agencies enter the final turn leading to the transition to a prospective payment system (PPS) for home health. The update came on the opening day of NAHC’s National Policy Conference in Washington, DC.

NAHC is actively pursuing co-signers for separate bills in the House and Senate that would put the final nail in the coffin for the additional 15% reduction in Medicare home health spending still technically slated for next year. Sentiment has swung decisively against the additional cut but NAHC is not taking any chances.

In the Senate, the Home Health Payment Fairness Act, which would strike the additional reduction, has already gathered 18 original co-signers. That bill is being spearheaded by the offices of Sen. Kit Bond (R-MO), Sen. Susan Collins (R-ME), and Sen. Jim Jeffords (R-VT), each of whom chair an important committee. A similar bill is also expected in the House.

NAHC’s Theresa Forester also noted several work force issues likely to surface this year. She said NAHC expects a $1 increase in the minimum wage over a 2-year period. But she added that the average wage for a home care aide ranges between $7 and $9 an hour, which is already ahead of the $6.15 that would be established under the increase.

HCFA names third DMEPOS bidding demonstration site P>

And the next competitive bidding site for durable medical equipment is . . . San Antonio.

The Health Care Financing Administration (HCFA) announced in March that the Texas City would be the second competitive bidding demonstration for durable medical equipment prosthetics orthotics and supplies (DMEPOS).

The demonstration is set to begin Jan. 1, 2001. HCFA expects to save between 17% and 30% for DMEPOS, based on savings seen from the first demonstration that was launched in October 1999 in Polk County, FL. The two demonstration sites represent two of the three intended demonstration projects. HCFA hasn’t announced the site of its third demonstration.

The announcement of the second demonstration site comes despite the objections from the National Association for Homecare (NAH) that objected to another competitive bidding demonstration without first looking at the impact of the Polk County experiment.

According to the NAH, the Polk County demonstration has created numerous problems. In addition, one of the winning bidders has since filed for bankruptcy, causing confusion among Medicare beneficiaries.

The San Antonio demonstration will operate in three area counties and will include oxygen supplies, hospital beds, manual wheelchairs, noncustomized orthotic devices and albuterol sulfate and other nebulizer inhalers.

HCFA says that Medicare allowances for some of those items, such as albuterol sulfate, were found by the Department of Health and Human Services’ Office of Inspector General (OIG) to be three times the supplier’s acquisition costs. In addition, OIG says the same drugs can be purchased by mail order and through retail pharmacies for substantially less than what Medicare pays.

OIG questions DMERCs’ anti-fraud efforts

Durable medical equipment regional carriers (DMERC) are apparently meeting the objectives established by the Health Care Financing Administration (HCFA) to reduce fraud, but the Department of Health and Human Services’ Office of Inspector General (OIG) still questions the effectiveness of DMERC’s fraud units.

While the four DMERCs have successfully targeted fraud in many specific cases, a lack of complete information made an assessment of their overall effectiveness impossible, the OIG said. The DMERCs workload data quantified their anti-fraud efforts to the OIG; it could not provide data that documented the quality and result of their efforts.

The OIG urged HCFA to require DMERCs to maintain information in their automated information systems that includes complete and accurate documentation on the sources of opened cases and detailed financial information on fraud cases in overpayment status. The data, OIG said, would help facilitate an analysis of both the quantity and quality of the work performed by the DMERC fraud unit.

HCFA administrator Nancy Ann DeParle agreed with the OIG’s recommendation, and reported that the agency is currently developing a reporting system that will require Medicare contractors to report on fraud and abuse overpayments.

Medicare error rate in 1999 remains steady

Medicare’s fee-for-service error rate held steady in 1999 compared to the previous year, reported Department of Health and Human Services Inspector General June Gibbs Brown.

The 1999 error rate was 7.97%, less than a percentage point higher than the 7.13% error rate reported in 1998, Brown told a Senate Appropria-tions Subcommittee in March.

According to Brown, HHS’ detailed medical and audit review of a statistical selection of 600 beneficiaries nationwide with 5,223 fee-for-service claims processed for payment during 1999, found that 1,304 claims did not comply with Medicare laws and regulations. Based on the errors, Brown estimated that $13.5 billion was overpaid nationally, about 7.97% of the total payments made that year.

Unsupported services represented the largest error category, Brown said. Unsupported services totaled $5.5 billion — $4.5 billion from insufficient documentation and $1 billion from claims in which no documentation was provided.

Brown pointed her finger specifically at home health agencies. She said much of the errors were attributable home health providers. She estimated that $1.7 billion in overpayments was attributable to errors in home health claims. She also pointed out that durable medical equipment providers ($1.6 billion) and physicians ($1.1 billion) were also to blame.