OIG Report finds that HHAs are largely compliant with Medicare Coverage Requirements

In recent years, home health agencies (“HHAs”) have been under a tremendous amount of scrutiny due to perceived concerns involving fraud and abuse. To that end, CMS assigned newly enrolling HHAs to the high-risk screening level in 2011, and the OIG responded by significantly increasing its focus on HHAs, as evidenced by the numerous OIG initiatives targeting HHAs contained within the OIG’s 2012 Work Plan. Many news outlets have also been critical of HHAs, particularly with respect to compliance with Medicare coverage requirements.

In a new report (the “Report”) issued by the OIG in March of 2011, however, the OIG released data which indicates that HHAs are doing a fairly good job in complying with Medicare coverage requirements. The Report analyzed data for a random sample of 495 beneficiaries to determine whether Medicare coverage requirements were met. Namely, the Report examined whether the HHA claims were in compliance with the following Medicare coverage requirements: (1) the beneficiary must be homebound; (2) the beneficiary must need intermittent skilled nursing care; (3) the beneficiary must be under the care of a physician; and (4) the beneficiary must be under a plan of care that has been established and periodically reviewed by a physician.

In summary, the Report concluded that only 2 percent of claims were submitted for services that were not medically necessary. In addition, while the OIG identified a 20 percent error rate in claim coding, 10 percent were coded too high and 10 percent were coded too low, with the undercoded claims ($184 million) nearly offsetting the upcoded claims ($278 million). This type of consistency suggests problems related to a lack of understanding complex coding rules, as opposed to intentional upcoding.

A full copy of the Report is available here —> OEI-01-08-00390

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