OIG: Home Health Agency Owes $7.5 Million for Medicare Overpayments

A home health provider based in Brooklyn, New York, should pay back more than $7 million in Medicare payments that it received improperly, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) states in a compliance review released Wednesday.

Medicare claims submitted by Excellent Home Care Services LLC for services in calendar years 2011 and 2012 were rife with problems, according to the OIG’s audit. Specifically, the agency did not comply with billing requirements for 96 out of 124 starts-of-care, associated with more than 550 claims, examined by the agency; issues included beneficiaries not being homebound and missing or insufficient documentation from certifying physicians.

The resulting net overpayments to the agency totaled $497,608, OIG calculated. Extrapolating from that sample, Excellent Home Care Services received net overpayments of at least $7.5 million for the audit period.

The billing errors occurred because the agency lacked “adequate controls,” the federal watchdog asserts. The agency should pay back more than $6.3 million for net overpayments received for claims during the three-year claims recovery period, and also should “work with the [Medicare] contractor” to refund the additional amount—totaling more than $1.1 million—outside the three-year recovery period, OIG recommends.

In addition, Excellent Home Care Services should take steps to improve billing, including ensuring that homebound status is verified, only necessary skilled services are being provided, and that physicians’ certification and plan of care are compliant, the audit report states.

The home health agency already has pushed back against the findings, challenging most of the claims made by the OIG. Some of the arguments put forward by the agency, for example with regard to physician documentation, echo common refrains made by providers across the country about the difficulties in complying with Medicare requirements.

“It is no secret that in this industry doctors document poorly,” the agency’s attorneys stated in a formal letter to the OIG. “They are pressed with other duties and responsibilities, and derive no direct financial benefit from taking the time to complete the required reports fully and consistently.”

Based on the agency’s comments, OIG revised its determinations for only two claims. It is forwarding a copy of its report to the Centers for Medicare & Medicaid Services (CMS), and it will be up to that agency to take subsequent actions. Excellent Home Care Services may turn to the formal Medicare appeals process going forward, the OIG report states.

But for the provider, that likely will be of cold comfort, both considering the broken nature of the Medicare appeals process and the extreme threat represented by the OIG findings.

“What the auditors have done is identify a series of mostly technical areas where, in their view, the letter of the requirements were not fully satisfied,” the agency’s attorney wrote. “The projection of these disallowances over the entire universe of patients seen results in a catastrophic demand for repayment, which threatens the viability and continued life of this agency. The audit should be adjusted to eliminate doubtful disallowances and provide Excellent Home Care with the opportunity to continue to provide excellent home care.”

The audit report is just part of a series of reviews that the OIG is undertaking, as part of a concerted effort to reduce home health overpayments. The improper payment rate for home health exceeded 50% of all claims for 2014, according to the agency, representing $9.4 billion.

In another sign of the intensifying focus on home health, OIG recently conducted a data analysis and flagged more than 500 agencies with suspicious billing practices for further scrutiny.

Written by Tim Mullaney