Home health is still under the spotlight for fraud and abuse


HHBR Washington Correspondent

WASHINGTON – Home care providers can expect state and federal investigators to zero in on fraud and abuse in Medicare and Medicaid next year. That point was highlighted by John Krayniak, director of the Medicaid Fraud Control Unit, who told the House Commerce Sub committee on Investigations and Oversight last month that the home care industry remains rife with fraud and abuse.

"It is an industry that contains all of the components for disaster," he said. "It is unregulated in the traditional medical sense. Multiple agencies are involved with large amounts of government money, and it is attractive to the consumer.

"Already the fastest-growing part of the Medicaid-funded healthcare system, state and federal outlays in the home health industry have ballooned in the last five years," said Krayniak. The Medicaid federal share for home healthcare is expected to reach $18.4 billion by the year 2000, he added.

"The potential for fraud in this rapidly expanding and highly expensive industry is clear," he asserted. "Kickbacks to doctors to authorize medically unnecessary treatment, services, or supplies, whether provided or not, is cause for concern."

Krayniak told the subcommittee that frequent visits by nurses, nurse practitioners, and home health aides combined with regular visits to a physician for certification of continued need and dosage adjustment are often necessary. But he argued that fragmented billings provide "a classic recipe for fraud." Drugs are billed by the pharmacies, and the supplies used to assist in administering the drugs are billed by the durable medical equipment provider. Professional services are billed by the home health service company or individual providers, and personal services may be billed to various agencies, he said.

Krayniak also put the spotlight on home infusion. In addition to drugs and nutritional formulas, supplies such as tubing, syringes, alcohol swabs, bottles, gloves and needles, and expensive equipment, such as pumps, nebulizers, glucose monitors, and blood pressure kits, are all billed on a regular basis and increase the risk of fraud, he argued.

Krayniak highlighted some examples of home health fraud:

Five individuals in Massachusetts were charged on a variety of Medicaid fraud charges as a result of the Medicaid Fraud Unit’s investigation into Medicaid’s personal care attendant program, which allows disabled individuals to remain in a community setting with the aid of personal care attendants. Each of the defendants charged the state for services that were not provided and/or inflated billings made to the agencies.

In Pennsylvania, after a four-week trial, a home healthcare agency owner and her corporation were found guilty for engaging in a five-and-a-half year scheme to defraud Medicare and Medicaid of more than $1 million. Evidence presented at the trial revealed that the owner falsified records regarding patient homebound status.

Two home healthcare providers continued to bill the Washington State Medicaid program after the patients had died. In one of these cases, the defendant continued to bill the state while living with the victim’s ex-wife.

Major areas of exposure

Leading healthcare attorney Deborah Randall of the Washington-based firm Arent Fox recently outlined her major concerns about fraud exposure for home health providers and offered her advice on how to mitigate that exposure.

Speaking at the American Health Lawyers Assoc iation conference in Washington, DC, Randall said her No. 1 concern is the use of coordinators and community liaisons. She said the coordinator liaison problem stems from a misunderstanding by hospitals, nursing homes, and assisted living facilities about what home health agency staff can do onsite in those facilities and what kinds of reviews those persons can perform before an actual referral is made to a home health agency.

"The real problem here is not that the CEOs of the home health agencies don’t understand this law because they do," Randall said. "What is happening is the people who are staffed out to those locations get sucked into the relationships of the facilities."

The coordinators often keep poor documents and are not able to show what services they performed. Home health agencies then include the salaries of these individuals on cost reports as fully reimbursable. "Even if there isn’t a kickback problem in the facility, there is a problem with the cost report," she warned.

Randall said another risk area deals with diversified systems and shared employees. She said this issue deals with whether home health agencies are farming some of their staff out to do other work and how they are accounting for it on the cost report. She maintains that a poor understanding of reimbursement principles is the primary cause and said home health agencies must have sound policies for tracking employee staff time.

The criteria for homebound patients is another problem area, according to Randall. "We know a lot more about what a homebound patient is or is not by simply time and place and the number of denials people are getting," said Randall. "But there is no reason why a home health agency should be keeping on service a person who is able to drive a car and go out into the community." Those cases are not limited, but frequent enough that the reputation of the industry is at risk, she argued.

Randall also outlined her concerns in the area of Medicaid. The main exposure there is appropriate billing, according to Randall. "I am concerned about the equivalent of a false claims issue case brought by Medicaid against a provider for billing inappropriate services to the Medicaid program," she said.

Agencies that are not familiar with the Medicaid Priority Third Party Liability Law (TPL) should quickly become familiar with it, she added. "TPL is a big issue right now, and a lot of money is going to be taken back," she warned. Even if it does not turn out to be a fraud case, there may be some penalties, she added.

Randall also noted that some agencies still fail to acquire a physician’s signature before billing Medicare. She noted that this item was included in an Office of Inspector General (OIG) report last month, which noted that agencies are doing better, but that some agencies still send in bills without physician’s signatures. "I think we have another six months before we see someone bring a serious case on this," she warned.

Randall also noted one case in which a home health administrator was convicted of witness tampering. She said agencies must understand that owners are prohibited from influencing the responses of their staff to inquiries and investigations by the OIG or fiscal intermediaries.

Finally, Randall said a number of the big cases she has been involved with in the home health field over the last year and a half have involved the IRS. "There are investigators in the IRS who are looking at home health agencies," she asserted. Those investigations may include repayment to the government, as well as criminal or civil exposure for home health agencies, she added. Randall said those investigations deal not only with whether costs are appropriately identified, but also whether certain amounts of money are taken out of the home health system inappropriately.

– See next week’s HHBR for fraud and abuse issues confronting hospice, DME, and infusion providers.