Illinois Home Health Fraud Tops $100 Million

In roughly six months, and for a non-refundable fee of $25, any person wishing to operate a home health care agency in the state of Illinois can receive their agency’s license, according to the Illinois Department of Public Health (IDPH).

While obtaining a home health license in the state seems pretty straightforward, applying to be a Medicare or Medicaid certified agency is more complex, according to Katharine Eastvold, director of regulatory and government affairs at Springfield, Illinois-based Illinois HomeCare & Hospice Council (IHHC).

This is particularly true, especially as the Centers for Medicare and Medicaid Services (CMS) extended its home health moratorium in the state, placing a temporary ban on new home health care agencies from providing Medicare-certified home health care.


The relative ease of applying for a home health license, however, has led to a surge of new home health companies to sprout in the state, as the IDPH has reported that a total of 759 private businesses offering home health services held state licenses, as of September 2017, according to a Chicago Tribune article.

However, this surge in home health companies has ushered in a more troubling trend for the state’s home health industry: a spike in fraudulent billing practices.

The prevalence of fraud


In the past five years, federal investigators estimate that home health agencies in the state have collected at least $104 million of public dollars through improper measures, according to the Tribune.

While billing frauds persist in the industry, becoming a Medicare-certified agency in the first place is not as easy it looks, according to Eastvold.

“I think the question really is how easy is it to get reimbursed by Medicare or Medicaid?” Eastvold told Home Health Care News. “We have a licensure system in Illinois, but you have to be Medicare certified in order to bill either one of those government programs. It’s not really quite as simple as that.”

Despite this, Eastvold and her colleagues at IHHC are cognizant of the persistent erroneous billing practices being committed by fraudulent agencies like those profiled in the Tribune article who follow practices like falsifying diagnoses, or those that pay “patient brokers” to funnel Medicare/Medicaid patients into their home health agency.

“[Those agencies] are examples of what we’re seeing when it comes to true fraud,” Eastvold said. “These are not providers who are caring for patients and committed some fraud on the side—they were set up to where they were instructing nurses to [falsify] a person’s clinical record [or] were going out and influencing people in order to get their Medicare numbers, or outright stealing Medicare numbers in order to bill them for services that they did not receive or they were not even aware had been billed for.”

No magic bullet

Roughly 357 active home health companies in the Chicagoland area have been linked to potential financial fraud by federal investigators, but were never charged, according to the Tribune article.

Further compounding the issue is the fact that state health department oversight focuses on “administrative paperwork rules,” paying little attention to financial fraud, which is overseen by federal authorities, the article further details.

There is no magic bullet that can stop the persistent billing fraud that occurs within the industry, according to Sara Ratcliffe, executive director at IHHC. However, stopping fraud in its tracks can start with players within the field, she explained.

“I think it has to be targeted, and I think it starts on the local level,” Ratcliffe told HHCN. “As an agency sees something that’s not right coming out of somewhere else, then they should report it.”

She also stressed the importance for agencies to align themselves with other members of integrity.

“Associate yourself with member organizations that are committed to a code of ethics,” Ratcliffe said.

Eastvold stressed that a crackdown should happen on singular offenders and not the industry at large.

“I think the focus has to be on targeted investigations as opposed to additional regulations that apply to all providers,” Eastvold said. “Really, what has to happen is more resources for investigation and prosecution of that fraud when those patterns emerge [like when] very similar documentation [is] all coming out from one physician—I’m sure that’s something that the Office of Inspector General finds suspicious.”

She also explained that measures like CMS’ moratorium can help curb the incidence of fraudulent billing practices.

“We do support the moratorium that CMS has placed on Illinois,” Eastvold said. “We think that that is something that curbs fraud so we don’t just have people coming in and starting up a home health agency out of nowhere for fraudulent reasons.”

Written by Carlo Calma

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