Health Reform WK-EDGE Home health agency strongly disputes claim of $15M in overpayments
Monday, August 29, 2016

Home health agency strongly disputes claim of $15M in overpayments

By Harold Bishop, J.D.

The HHS Office of Inspector General (OIG) conducted a series of reviews of home health agencies (HHAs) that were at risk for noncompliance with Medicare billing requirements, including Home Health VNA, of Lawrence, Massachusetts. The reviews were conducted because (1) the calendar year (CY) 2014 improper payment error rate for HHA claims was 51.4 percent, according to CMS’ Comprehensive Error Rate Testing (CERT) program; and (2) although HHA claims account for only 5 percent of Medicare fee-for-service (FFS) spending, improper payments to HHAs accounted for more than 20 percent of all improper FFS payments in 2014 (OIG Report, No. A-01-13-00518, August 19, 2016).

Audit scope and findings. The OIG’s audit of Home Health VNA covered $48.9 million in Medicare payments to the agency for 17,216 claims for HH services primarily in CYs 2011 or 2012. The OIG selected for review a stratified random sample that included 497 HH claims with payments totaling $2.1 million.

The OIG found that the agency did not comply with Medicare billing requirements for 105 of the 497 HH claims, receiving net overpayments of $314,406. On that basis, the OIG extrapolated that the agency received overpayments of at least $15,483,448 for the audit period. Of this amount, the OIG estimated that at least $6,348,971 was within the three-year recovery period, and as much as $9,134,477 was outside the three-year recovery period.

Specifically, the OIG found that the agency incorrectly billed Medicare because (1) beneficiaries were not homebound; (2) beneficiaries did not require skilled services; (3) documentation from the certifying physicians was missing or insufficient to support the services provided; or (4) in one instance, a claim contained an incorrect health insurance prospective payment system payment code.

Recommendations. The OIG recommended that the agency (1) refund the $6,348,971 in estimated overpayments for claims incorrectly billed that are within the three-year recovery period; (2) identify claims in subsequent years that did not meet Medicare payment requirements and refund any associated overpayments; and (3) work with the Medicare contractor to refund net overpayments outside of the three-year recovery period, estimated to be $9,134,477, in accordance with the 60-day repayment rule required by section 6402(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

ACA 60-day overpayment rule. Section 6402(a) of the ACA, which created a new section 1128J(d) of the Social Security Act, requires a provider or supplier who has received an overpayment to report and return the overpayment to and to notify the respective recipient of the overpayment in writing of the reason for the overpayment. Section 1128J(d)(2) requires that an overpayment be reported and returned by the later of: (1) the date which is 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due, if applicable.

Under CMS’ 60-day overpayment Final rule (81 FR 7654, February 12, 2016), a provider or supplier is deemed to have "identified" an overpayment when they have or should have, through the exercise of reasonable diligence, determined that they received an overpayment, and quantified the amount of the overpayment (see CMS finally codifies the 60-day Parts A and B overpayment return rule, February 12, 2016). Since the Final rule requires that overpayments must be reported and returned if a person identifies the overpayment within six years of the date the overpayment was received, this identification by the OIG of overpayment would seem to activate this repayment obligation.

Further recommendations. The OIG also recommended that the agency strengthen its procedures to ensure that the homebound statuses of Medicare beneficiaries are verified and the specific qualifying factors are documented, beneficiaries are receiving only reasonable and necessary skilled services, and the physicians’ certification and plan of care comply with Medicare documentation requirements and support the services provided.

Response. The agency disagreed with the OIG’s findings and most of its recommendations. The agency (1) commented that the high HHA CERT error was a condemnation of the systems and processes involved, rather than individual providers; (2) challenged the OIG’s statistical methods and stated that the OIG’s extrapolation of the audit results was invalid; (3) challenged the independence of the OIG’s contracted medical reviewer and the accuracy of its medical review work; (4) asserted that it has no meaningful appeals process for the OIG’s findings, as the appeal system is overloaded and not functioning consistent with requirements; and (5) stated that the OIG rushed the process to issue its draft report and did not allow sufficient time to respond to the agency’s findings.

Companies: Home Health VNA; HHS Office of Inspector General

ReportsLetters: OIGReports HomeBasedServicesNews MedicarePartANews MedicarePartBNews ProviderPaymentNews NewsFeed

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