August to Usher in Onslaught of Home Health Audits

For months now, home health providers have had to worry about an onslaught of new issues, from volume disruptions and personal protective equipment (PPE) shortages, to cash flow problems and lack of telehealth reimbursement.

One long-time stressor they haven’t had to fret about, though, is being audited by the Centers for Medicare & Medicaid Services (CMS). But that’s about to change.

While CMS temporarily paused audit activity back in March as a result of the COVID-19 emergency, it has announced plans to resume enforcement Aug. 3. That means, on top of everything else, home health agencies could also have to worry about proving they haven’t been overpaid by Medicare.


As if that wasn’t enough, at the same time, they could be hit with new, additional types of audits on financial relief received as a result of the CARES Act.

Combined, the various forms of increased oversight could create a huge paperwork burden for already overworked home health providers in the months to come.

PPP audits

While normal fee-for-service Medicare audits are expected to begin in just a few days, audits of Paycheck Protection Program (PPP) loan recipients could start soon thereafter.


Specifically, such audits are expected to begin later this year, according to Matt Wolfe, a partner at the law firm Parker Poe.

That applies to both home health and home care provider PPP loans recipients, none of whom should get too comfortable — even if their PPP loans are relatively small and have been forgiven.

Although the Treasury Department and the Small Business Administration (SBA) have said borrowers who got less than $2 million in PPP loans are considered to have made their requests in good faith, that doesn’t guarantee such loan recipients won’t be audited.

“I think a lot of folks may have breathed a false sigh of relief when they saw that,” Wolfe told Home Health Care News. “But then when [the SBA] issued the interim final rule, they made clear that they retain discretion to audit a borrower regardless of the amount. So if I am a provider, and I received a PPP loan less than $2 million, … it is still critical [to] keep good records to be able to justify retention of loans and the forgivability of the loans.”

According to an HHCN analysis of SBA data, more than 15,000 home-based care providers nationwide received PPP loans of less than $150,000. Approximately 7,400 home-based care providers got loans above $150,000.

All of those entities run the risk of being audited by SBA.

That risk exists for up to six years after the loan is issued. The audit lookback period is on the longer side, but it’s not unheard of, Wolfe said. 

“It’s twice as long as the lookback period typically for IRS audits,” he said. “It is similar to some state Medicaid agencies’ lookback periods. It’s longer than most types of Medicare audits. And it is theoretically shorter than the lookback period that the Department of Justice or U.S. Attorney’s Office would have in a False Claims Act.”

To protect themselves from audits, home-based care providers should keep a paper trail to demonstrate their thought process for each step of the PPP lifecycle. That includes documents to prove an agency’s economic need and justify the amount of the loan, as well as for documentation illustrating how the money was used.

Provider Relief Fund audits

Provider relief funding can also be audited.

If home health providers received more than $10,000 from the Provider Relief Fund, they’ll be expected to report how they used the money by Feb. 15, 2021, according to new U.S. Department of Health and Human Services (HHS) guidance.

“Anytime that HHS is going to be requiring that providers issue reports, they’re not just going to take the providers’ word for it,” Wolfe said. “They’re going to then analyze those reports, and those could lead to further audits in terms of how those funds were used.”

HHS plans to release more details on Provider Relief Fund reporting requirements by Aug. 17.

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