Another news report slams hospital-based agencies

But it’s more revealing for what it doesn’t say

Once again, hospital-based home health has been singled out as the villain among home health providers. The allegations? Hospitals are referring more patients to their own agencies than they should.

A story in Modern Healthcare in September trumpeted the findings of a draft report prepared by the Department of Health and Human Services’ Office of Inspector General (OIG), saying some hospitals abuse their discharge planning powers over patients, referring them to agencies owned by the hospital and thereby denying Medicare beneficiaries freedom of choice.

The story quotes findings such as this: "62% of patients discharged from hospitals that owned a home health agency were referred to an agency owned by the hospital."

Well, before we round up all the usual suspects, let’s take a look at what the story left out.

For instance, a total of 4,820 claims were extracted and divided into two strata: the five Operation Restore Trust states, and all other states. The random selection of beneficiaries broke out as "750 from the ORT strata and 250 from all others."

Apparently, much of the data were gathered from states already targeted by ORT investigators.

Hospital Home Health obtained its own copy of the OIG’s draft report from the American Hospital Association.

The OIG report found that 38% of beneficiaries who went to hospital-owned home health agencies reported that "the hospital just sent home people" to them. In contrast, the report says, "only 24% of the recipients of home health services which were independent of their discharging hospital reported this." And, "recipients of hospital-owned services were less likely to indicate that they had some form of input into the choice of a home care agency."

But the report goes on to say, "because of the relatively small sample size, we cannot demonstrate that the differences discussed above are statistically significant. However, the trend they point to is consistent with a number of other related survey respondent trends."

So, where’s the evidence of fraud or abuse here? Looking for hospitals that overtly directed discharge planners to steer patients into their own home health agencies, the OIG researchers sent 1,000 questionnaires to discharge planners asking, among other things, if the hospital had orders to send patients to its home health agency.

Yet, out of 630 questionnaires received, only four attached written orders that "contained language which strongly encouraged the promotion of hospital owned HHAs in the discharge process. One of these even included a hospital policy that says, ‘Referrals leaving the [hospital-owned] system = $$$ leaving the system.’"

Again, that’s one out of 630 questionnaires received from discharge planners.

Now, here’s the rest of the story

The report also found that "discharge planners report giving adequate choice"; and "beneficiaries who go to hospital-owned nursing homes and home health agencies report better continuity of care"; and "beneficiaries who went to hospital-owned home health agencies are more likely to report having been discharged at the right time"; and finally, "beneficiaries who went to hospital-owned home health agencies are more likely to report that the connection between their care providers was very good."

The report’s recommendations are telling. It only recommended that the Health Care Financing Administration (HCFA) ensure the hospitals provide patients with a list of other home health providers in the area; provide a list of home health agencies they own; and disclose the information to HCFA.

Sound familiar? It should. It’s part of the Balanced Budget Act of 1997, passed in August. There’s nothing new or startling in this report.

"Sixty-two percent?" says one Midwestern home care director. "I don’t think it is inappropriate. I don’t think it’s monopolistic or alarmingly high. I think HCFA recognizes people need to make informed choices. They’ve been clear on that. I would anticipate the majority of hospitals understand that and probably do give alternatives [for home care].

"I think we [hospital-based agencies] do a damn good job. It doesn’t surprise me that a high percentage choose home care from the organization they are already getting care from," he says.

Barbara Bernardi, RN, BSN, MBA, administrator of Jameson Visiting Nurses Association of Lawrence County, PA, sees the report as further evidence of "an effort to limit utilization, an effort to drive hospitals out of the home care market by insinuating there’s some kind of fraud.

"I know there are some hospitals who abuse that [provider choice], but sometimes it’s an [attitude] of, ‘should we take care of the patient when we know we’re the better provider? Yes, we want to offer provider choice, but we know we’re the best, so why would we refer to another?’"

So far, no one has established a limit on referrals.

"I’m not sure what the percent should be, as long as it’s fair," says Dan Lerman, president of the Center for Hospital Homecare Management, a home care consulting firm in Memphis, TN.

So, what should a hospital-affiliated agency director do, at least until HCFA or somebody else in Washington comes up with a number of hospital referrals allowed?

"Disclosure of agencies is the bottom line," he says. "Make sure beneficiaries have doctor choice, provider choice, and that there’s full compliance with the new law. You do that and you’re doing your duty. But freestandings will have to be active in letting hospitals know they want to be on the list."