OIG Finds $2 Billion in Medicare Home Health Claims Paid in Error

Federal investigators have uncovered some flaws with the Centers for Medicare & Medicaid Services’ (CMS) face-to-face rule—flaws costing $2 billion worth of erroneous home health Medicare claims, a recent report finds. 

Documentation standards for face-to-face encounters did not meet Medicare requirements for 32% of home health claims, resulting in $2 billion that should not have been made, says The Department of Health and Human Services (HHS) Office of the Inspector General (OIG) in an April 2014 Report.

The HHS OIG findings are based on Medicare Part A claims from January 1, 2011 though December 31, 2012. By examining these claims, HHS OIG investigated the extent to which certifying physicians documented face-to-face encounters with Medicare beneficiaries. 


A certifying physician must document a face-to-face encounter with a patient for the initial home health episode of care only, as required by CMS. If the certifying physician does not complete the documentation correctly, CMS can then deny payment to the home health agency since the face-to-face is a condition of payment under Medicare.

CMS defines “certifying physicians” as the physician who cared for the patient in an acute-care or post-acute-care facility, or a permitted patient whom the physician is certifying for home health services.

Through its investigation, OIG found that 10% of claims without face-to-face documents totaled $605 million, while 25% of the documents that were submitted were missing at least one required element. 


About 17%—totaling $941 million—of the face-to-face documents were signed by persons other than the certifying physicians. 

Other claims, OIG found, included inconsistent narratives filled out by physicians, which are used to describe the patient’s clinical condition and the way in which his or her condition supports his/her homebound status and the need for skilled services. 

Contributing to the erroneous filings of home health claims, OIG also found that CMS lacks an “adequate” oversight mechanism to ensure the face-to-face requirement is met. 

To enhance oversight, the report recommends CMS consider developing a formal training and outreach strategy to communicate directly with physicians about the face-to-face rule, as well as using a standardized form that would ensure physicians are including all elements required for the appropriate documentation.

“Ensuring that an oversight mechanism is in place will also prove instructive for CMS as it implements a similar face-to-face requirement for durable medical equipment in the future,” stated OIG. 

Recently, home care industry advocates have rallied against CMS and the face-to-face rule, with one group, The National Association for Home Care & Hospice, exploring the possibility of filing a lawsuit against the federal agency.

View the OIG April 2014 Report

Written by Jason Oliva