New OIG study bad news for industry
QI managers’ jobs are more important than ever
The Office of Inspector General (OIG) recently released its report on Medicare services in four large states, and the news is not good. The OIG found too many overpayments by Medicare based on incorrect information about patients and services. That means the Health Care Financing Administration (HCFA) has more ammunition in pushing the continuation of the proposed 15% across-the-board cut in Medicare payments to home care agencies.
And it means home care quality managers should continue or start programs that focus on documentation and eliminating all errors in recording Medicare services and patients’ homebound status. (See Homecare Quality Management, November 1999, p. 129, about creating an airtight documentation and billing process.)
"Agencies have to be very familiar with all the coverage rules and all the policies, and examine every claim under a microscope before they submit it," says Mary St. Pierre, director of regulatory affairs for the National Association for Home Care (NAHC) in Washington, DC.
The OIG’s report, submitted to HCFA Administrator Nancy-Ann DeParle on Nov. 1, discusses a review of Medicare home health services in California, Illinois, New York, and Texas. Using fiscal year ’98 data, the report found improper or highly questionable services in 19% of the cases examined. This is a significant reduction from the OIG’s prior study of fiscal year ’97, in which the agency found a 40% improper payment rate in the same four states. The original audit was part of the Operation Restore Trust project that was initiated in 1995 by the Secretary of the Department of Health and Human Services to reduce fraud, waste, and abuse in the Medicare and Medicaid programs.
Ways to lose money
Most of those types of improper payment claims turn out to be technical errors in which a physician perhaps failed to date an order, or the home health agency forgets to stamp a date on a physician order and therefore invalidates it, St. Pierre says.
"Often, what we find is those determinations are technical rather than truly inappropriate care or no physician orders," she says.
This is why it’s so important that quality managers drill into staff the importance of 100% accurate documentation 100% of the time. Without precise and accurate documentation, an agency could find itself losing thousands of dollars in reimbursement and even face penalties or further government investigations.
More physician involvement
The OIG review concluded that unallowable or highly questionable claims, based on a small sample studied, were an estimated $675.4 million out of a total of $2.3 billion in charges in the four states. The errors included:
• services not reasonable or necessary;
• services to beneficiaries who were not homebound;
• services without a valid physician order;
• services not documented;
• services at terminated home health agencies for which medical records could not be found (see chart, above).
| Comparison of Types of Findings in OIG Study of Home Health Agency Medicare Claims | ||
| Chart A | ||
| Types of Findings (Percentage*) | CURRENT REVIEW (FY '98) | PRIOR REVIEW (FY '97) |
| Services not reasonable and necessary | 5.51% | 18.33% |
| Beneficiary not homebound | 3.00% | 10.67% |
| Services without valid physician orders | 3.57% | 10.38% |
| Services not documented | 0.96% | 0.19% |
| No documentation at terminated home health agencies | 5.80% | ** |
| Total | 19%*** | 40%*** |
| * Percentages were developed by statistical projections based on a stratified cluster methodology. For those appraisals, we considered each claim to be a cluster of services. | ||
| ** This category of findings was not identified in our prior review. | ||
| *** Rounded to the nearest whole percentage. | ||
| Source: Office of Inspector General, Washington, DC.Rehabilitation Chart Review Figures | ||
"In our opinion, the majority of unallowable services continued to be provided because of inadequate physician involvement," Inspector General June Gibbs Brown wrote in the memorandum to DeParle. "We found physicians did not always review or actively participate in developing the plans of care they signed."
NAHC officials point out that the study is skewed because it has statistical flaws. For example, the OIG selected states with the highest utilization rates, and specifically chose to review charges at agencies where the agency already had concerns about questionable billing, St. Pierre says.
"They selected for review providers who they were questioning for their practices," she explains.
Plus, while the OIG says it found cases of improper or questionable claims, the agency hasn’t proved this because those agencies still needed an opportunity to go through the appeals process. Agencies can appeal Medicare claims rejections through their fiscal intermediaries and the administrative law judge review. In more than one-third of the cases, the fiscal intermediaries decide to increase the claims payments. And in 60% of the cases, the administrative law judge decides to increase the payment, St. Pierre explains, citing HCFA data.
The OIG report says the agency selected the claims it surveyed from the claims processed by the principal intermediary for each of the four states during a nine-month period ending Sept. 30, 1998. OIG investigators reviewed a statistical sample of 250 claims totaling $267,699 in charges.
OIG investigators handled each of the 250 claims in this manner:
• They interviewed the beneficiary, family member, or a knowledgeable acquaintance.
• They interviewed the physician who certified the plan of care.
• They obtained supporting medical records maintained by the home health agencies.
• They requested the intermediaries’ medical review personnel to determine whether the beneficiaries were homebound and the services were medically necessary.
Brown’s memorandum to HCFA says physicians rely heavily on home health agencies to make homebound determinations and develop plans of care for home health services. The study found that in five cases, physicians signed plans of care without knowing the patients’ conditions; and in 31 cases, the physicians were not aware of the homebound requirement for home services. Plus, physicians relied on the home health agency to prepare the plan of care in 67 cases.
OIG recommends . . .
The OIG report’s inclusion of 34 claims by home health agencies that had gone out of business might also have skewed the results. OIG investigators included those among the list of improper claims because they could not locate medical records for 126 services from 12 home health agencies that had closed shop. Some of those agencies had no forwarding information, and investigators couldn’t find certifying physicians.
Since those agencies have already gone out of business, proving they couldn’t operate profitably under the more stringent guidelines and fiscal constraints of IPS, then this shows they are not a good representation of existing home care agencies, St. Pierre indicates.
Based on its findings, the OIG has made four major recommendations to HCFA. The recommendations and HCFA’s and NAHC’s responses are as follows:
1. OIG recommendation: "The HCFA should revise the Medicare regulations to require the certifying physician to examine the patient before ordering home health services, and see the patient at least once every 60 days."
• This type of requirement would be very burdensome for bed-bound patients, St. Pierre says.
"Very few physicians make home visits, and this will create a huge burden for those Medicare beneficiaries who couldn’t possibly get to the physician’s office every 60 days," she says.
• HCFA officials agree that physicians should become more involved in the certification role. They say they are considering several options.
2. OIG recommendation: "The HCFA should consider the 19% rate of improper or highly questionable services as a factor before making any changes to the current payments under IPS."
• "What they’re suggesting is that the 15% reduction planned for October 2000 should take place, contrary to what legislators are thinking of doing as far as delaying it," St. Pierre says. NAHC officials continue to work to have that 15% reduction eliminated. "We don’t feel it’s appropriate."
• HCFA officials say they have no authority to make changes to the interim payment system (IPS), and the agency has not recommended any changes to IPS.
3. OIG recommendation: "The HCFA should consider making an equitable adjustment to the proposed HHA PPS rates or update factors to take into account the improper and highly questionable payments that were included in the rate calculations."
• It would be unfair to penalize all home health agencies for a small group’s improper billing, St. Pierre says.
• HCFA officials disagree with this recommendation because they believe actions have already been taken to ensure accurate and fair payments; but they agreed to give the recommendation further review.
The OIG made an additional comment following this recommendation, and home care agencies might find this particularly damaging. Brown’s memorandum says that the OIG continues to believe the base year data for the proposed home health agency PPS payments rate contains improper payments and this causes the rates to be inflated.
"We acknowledge that legislation requires additional reductions; however, these reductions do not fully account for the errors inherently included in the base period since HCFA’s review of the base period was limited to cost report issues," Brown wrote. "We, therefore, continue to believe the PPS rates are inflated."
4. OIG recommendation: "The HCFA should instruct the intermediaries to collect the overpayments identified in our sample."
• St. Pierre says she hopes the agencies involved in the sample will have the usual opportunity to go through the appeals process before they are required to return money to HCFA.
• HCFA officials agree with that recommendation.
The OIG also interviewed 181 hospital discharge planners from across the country to determine whether IPS was having any negative impact on patients receiving home health services after being discharged from hospitals. The report stated that 85% of the discharge planners said patients were able to obtain home health care when they needed it; and 83% said home health agencies never or infrequently refuse to take Medicare patients.
However, 61% of the discharge planners surveyed said that home health agencies in have changed their admission practices over the past two years, mostly through requiring more information on prospective patients so the agencies could evaluate Medicare eligibility. (See story on changes in home care admissions, below.)
"We also learned that home health agencies have changed their admission practices over the past two years by requiring more information before accepting a prospective payment," Brown stated in the memorandum to HCFA.
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