Three recent developments indicate sharp scrutiny being placed on the home health industry. Stemming from Congress, the courts and the Office of Inspector General (OIG), the concerns all intersect upon the same issue: Medicare billing practices for home health services.
On October 3, 2011, Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee; and Sen. Chuck Grassley (R-Iowa) issued a joint press release along with a staff report from the Finance Committee that accused home health companies of “gaming” the Medicare system by allegedly increasing the number of therapy visits made to the homes of Medicare beneficiaries. The report, which identifies several major companies by name, alleges that managers encouraged therapists to achieve a 10-visit target in order to increase Medicare payments.
Through 2007, the Medicare program included a substantial bonus when a home health agency provided at least 10 therapy visits. This bonus (more than $2,000) increased reimbursement an average of almost 98 percent as compared to when there were just nine visits. Foreshadowing this potential problem, CMS recognized when it implemented the bonus system that the 10-visit threshold was “susceptible to manipulation.”
On a parallel front, a major home health provider, LHC Group Inc., recently agreed to pay more than $65 million to the federal government to resolve allegations that it violated the False Claims Act for home health billings to the federal insurance programs. The company, which is one of the providers identified in the Finance Committee staff report, also agreed to be bound by the terms of a Corporate Integrity Agreement with the OIG. The settlement resolves allegations that, between 2006 and 2008, LHC improperly billed for services that were not medically necessary and for services rendered to patients who were not homebound.