Fraud and Abuse Hurts Everyone in the Homecare Industry

By: Elizabeth E. Hogue, Esq.

The U.S. Department of Justice has alleged that privately held hospice care provider, AseraCare, submitted false claims to the Medicare Program [United States ex rel. Richardson and Brown v. Golden Gate National Senior Care LLC dba Golden Living et al, No. 2:09-cv-00627, U.S. District Court for the Northern District of Alabama]. AseraCare is owned by Golden Living Communities and has 65 locations in 19 states. Specifically, enforcers claim that AseraCare filed claims for hospice care provided to patients who were not terminally ill with a life expectancy of six months or less.

The Justice Department joined a whistleblower or qui tam lawsuit filed in 2009 by two former employees of AseraCare, Dawn Richardson and Marsha Brown.  The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and to share in any monies recovered.  If the United States intervenes in a lawsuit, as it has in the AseraCare case, and proves that AseraCare submitted false claims, AseraCare may have to pay three times the value of false claims submitted and a penalty of between $5,500 and $11,000 per claim.  Agencies that have witnessed instances of fraud and abuse firsthand may be tempted to gloat, but this is clearly the wrong response!

It is important to remember that the government and the whistleblowers may be wrong.  There is a tendency to think that the government must be right, but providers who reflect on their own experiences dealing with regulators will immediately recognize that this is not necessarily the case.

Providers also need to recognize the effect that this action undoubtedly has on AseraCare.  Providers can be sure that many resources, both human and financial, have already been expended on this case.  This case will continue to require utilization of huge amounts of time and money.  The legal fees alone are likely to amount to millions of dollars.

Providers should also consider the toll this case is taking on the management and staff at AseraCare.  Whether right or wrong, staff members are almost surely suffering.  They may be second-guessing themselves in a number of ways.  They may be thinking about leaving the hospice industry and perhaps healthcare altogether.  They are probably losing sleep and in emotional turmoil.  In short, we should not wish this trouble on our worst enemies.

Lawsuits like these undoubtedly hurt other providers throughout the industry.  Allegations that the industry is a fraudulent may be thrown in the faces of other agencies.  Regulators may use allegations of fraud and abuse in the industry as an excuse to lower reimbursement rates and to take other adverse regulatory action against all providers.

The most distressing effect of all is that allegations of fraud and abuse hurt patients.  The resources used to fight such allegations could be used to help patients.  Adverse regulatory action and reduced reimbursement can also hurt patients quite directly.  The depletion of staff members’ emotional and spiritual resources means that they have fewer of these resources to share with patients.   Also, any monies paid to the government to resolve such allegations may adversely affect patient care.

Fraud and abuse hurts us all, including patients, a result that is simply unacceptable.

©2012 Elizabeth E. Hogue, Esq.  All rights reserved. 

No portion of this material may be reproduced in any form without the advance written permission of the author.

OIG Finds 20% Of Home Health Claims Coded Improperly, Resulting In $462M In Improper Payment

Some concerning news hit the home health community last week.

The Department of Health and Human Services’ (HHS) Office Inspector General (OIG) released a report that showed home health agencies submitted nearly 22% of claims in error because services were either not medically necessary (2.1%) or were coded improperly (20.2%).

This is the first time OIG has significantly addressed home health’s coding on claims. They stated that one of the factors for this review was the fast rise in Medicare home health spending—84% from $8.5 billion in 2000 to $15.7 billion in 2007—which “leads to concerns about the potential for improper payments due to fraud and abuse.”

More than 10 percent of claims (a value of $278 million) were considered up-coded, and 9.8% of claims (a value of $184 million) were found to be down-coded. This equates to a net loss of $94 million for the 
Medicare system.

While the report did not go into extensive details on scenarios that they found problematic, they did give an example of the frequent inappropriate use of GERD 530.81. We plan to discuss this further in our next blog post.

The results of this report are very significant and should be taken seriously by home health agencies. Whether the error is unintentional or not, agencies can get themselves into a lot trouble. CMS is cracking down and “has begun using technologies and analytic tools to prevent fraudulent payments and identify risky providers and claims.”

On the bright side, just 2% of claims did not show medical necessity. Agencies are doing a great job ensuring the services they provide are medically needed. 

Here at Daymarck, we have a very strict compliance stance. It is our first and foremost priority. We never up-code or use filler codes, and we code every agency the same. We also stay up to date with the constantly changing rules and regulations to ensure our clients are 100% compliant.

Now more than ever it’s critical that you are submitting accurate claims. If you’d like someone to give your agency an audit to see how you are doing, we can help. Contact us to discuss a coding “check up.”

To learn more about our view on compliance, visit here.