Targeted Fraud Crusade Aims to Shield Against Home Health Co-Pays

Following a landmark anti-fraud crusade spearheaded by the U.S. Department of Justice that turned up $223 million worth of Medicare fraud across eight cities, the need to protect federal programs from aberrant billing has become a hot topic of discussion among home care agencies.

One way the federal government is trying to control such abusive billing behavior is by proposing home health co-pays for Medicare beneficiaries, however, the industry doesn’t think the bushel should be punished for just a few “bad apples.”

“The worst thing that could happen is for seniors to be hit with a co-pay or for more home health cuts to take place,” says Berger. “With more than $70 billion cuts from home health in recent years, providers and beneficiaries have already suffered enough.”


Home health industry advocates have argued that co-pays would burden America’s seniors who might already be living on tight budgets.

About 38% of Medicare home health beneficiaries who are not dual eligible—meaning they qualify for both Medicare and Medicaid—do not have the supplemental insurance coverage and would likely have pay the full co-payment out-of-pocket, according to a May 2013 report from Avalere Health, LLC.

Additionally, Avalere notes that 73% of these home health users have incomes below 200% of the poverty line.


Forcing older adults to pay the proposed $100 co-pay for home health services could even lead some seniors to forego care, which could lead them into even costlier care settings.

Seniors who faced increasing co-pays ended up having fewer outpatient visits, but longer and more frequent hospitalizations, according to a study from the New England Journal of Medicine.

Within home healthcare, fraudulent activity has been highly concentrated in just a handful of counties in just five states, according to a Medicare Payment Advisory Commission’s (MedPAC) March 2012 report to Congress.

Of the nation’s 3,143 counties, MedPAC has identified the 25 counties with the highest levels of Medicare use where suspected abuse is occurring.

This has caused advocacy groups such as the Partnership for Quality Home Healthcare to urge Congress that addressing and preventing Medicare fraud relies on a more “targeted approach.”

“While there is a general perception that fraud exists, lawmakers are now recognizing how isolated it truly is,” says Eric Berger, CEO of the Partnership.

Part of this targeted approach has already made inroads into the home health industry, in the form of a proposed outlier claim that was so effective it was included in the Affordable Care Act (ACA) in 2009.

An outlier is considered any Medicare billing claim that exceeds a threshold limit of how much a home health agency can bill for a percentage of its revenues to Medicare.

For example, Medicare spent $1.2 billion in outlier claims in 2009, according to the Partnership. By 2010, the federal program spent $350 million after a targeted outlier safeguard proposed by the home health community was included in the ACA—translating into $850 million in savings for the program.

“Medicare is generating those savings without imposing an across-the-board cut to home health providers,” says Berger.

To ensure that their message is heard about the detriments cuts and co-pays pose to America’s seniors, the Partnership is confident its data-collecting of Medicare fraud trends will contribute to the greater discussion for legislation.

“If we provide people with enough data for them to pause and reflect on this isolated problem, then we can help them recognize that the picture is more complex,” says Berger.

Across-the-board cuts or co-payments stand to affect millions of seniors and providers, adds Berger.

“Implementing further cuts or reimposing co-payments, which Congress wisely repealed in 1972, would just be bad public policy.”

Written by Jason Oliva

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