OIG’s Semi-Annual Report – What’s in it for Home Health and Hospice

Well, it took me a little longer to get to this than I planned, but the Thanksgiving holiday weekend slowed me down a bit.  As promised, here is a look at what the OIG semi-annual report has to say about home health and hospice.  The good news is that, unlike in some prior years, it does not say much.

The first issue addressed by the report is “Non-Routine Supplies Subject to Home Health Consolidated Billing.”  OIG has been looking at this issue, because to the extent DME providers are being paid for items that should be covered by consolidated billing, Medicare is paying twice.  OIG’s investigation into 2007 and 2008 has led OIG to conclude that Medicare failed to recover an estimated $3.4 million in overpayments.  Of course, OIG extrapolated to this number from a sample.  OIG noted that a postpayment edit consistently identified these erroneous payments, but that Medicare simply failed to go back and recover them.  I would expect to see more activity to recover these payments.  For home health providers, it is more likely you will hear from the DME provider who is denied than from CMS directly.

The other home health specific issue relates to Part B payments for Physician therapy services.  OIG notes that, under the current system, a physician can be paid for therapy under Part B during a home health episode, even though physician therapy services are included in the home health PPS base rate.  OIG recommends that CMS close this loophole when it rebases home health payments in 2014.  OIG’s reference to rebasing leads to the conclusion that they want the physician therapy piece removed from the base rate so that it is purely a Part B issue.  This will, most likely, result in some reduction of the base rate.  (Like you are really surprised by that.)

Hospice providers are not forgotten in this report.  The semi-annual report only raises one hospice issue – Medicare Hospices that Focus on Nursing Facility Residents.  This entry is, essentially, a summary of the report that OIG issued over the summer.  They are concerned about hospices that have a high percentage of their patients in nursing facilities, because these hospices receive more Medicare payments per beneficiary than other hospices.  OIG reiterates its recommendations that CMS monitor these “high utilization” hospices and modify the hospice payment system to remove the incentive that leads to this pattern.  This is an issue that OIG is very concerned about and has specifically directed CMS to monitor.  Providers whose census is predominantly facility based need to assess the appropriateness of the patients they are serving and be prepared for closer scrutiny.   Understand that OIG thinks providers are gaming the hospice reimbursement system and OIG or CMS will likely be looking at things such as diagnosis, length of stay, services provided, as these are all mentioned in this report and in last summer’s report.

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