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.

Ten for 10: The Top Ten Reasons We Need ICD-10 Now

Many industry groups including ourselves, AHIMA and HIMSS are spreading the word out about why ICD-10 should not be delayed. Why is ICD-10 so necessary? This list of reasons, courtesy of AHIMA, shows why we need to implement ICD-10 as soon as possible:

1) It Enhances Quality Measures. Without ICD-10 data, serious gaps will remain in the healthcare community’s ability to extract important patient health information needed for physicians and others to measure quality care.

2) Research Capabilities Will Improve Patient Care. Data could be used in a more meaningful way to enable better understanding of complications, better design of clinically robust algorithms, and better tracking of the outcomes of care. Greater detail offers the ability to discover previously-unrecognized relationships or uncover phenomenon such as incipient epidemics early.

3) Significant Progress Has Already Been Made. For several years, hospitals and healthcare systems, health plans, vendors and academic institutions have been preparing in good faith to put systems in place to transition to ICD-10. A delay would cause an unnecessary setback.

4) Education Programs Are Under Way. To ready the next generation of HIM professionals, academic institutions have set their curriculum for two-year, four-year and graduate programs to include ICD-10.

5) Other Healthcare Initiatives Need ICD-10. ICD-10 is the foundation needed to support other national healthcare initiatives such as meaningful use, value-based purchasing, payment reform, quality reporting and accountable care organizations. Electronic health record systems being adopted today are ICD-10 compatible. Without ICD- 10, the value of these other efforts is greatly diminished.

6) It Reduces Fraud. With ICD-10, the detail of health procedures will be easier to track, reducing opportunities for unscrupulous practitioners to cheat the system.

7) It Promotes Cost Effectiveness. More accurate information will reduce waste, lead to more accurate reimbursement and help ensure that healthcare dollars are used efficiently.

If ICD-10 is delayed...

8) Resources Will Be Lost. For the last three years, the healthcare community has invested millions of dollars analyzing their systems, aligning resources and training staff for the ICD-10 transition.

9) Costs Will Increase. A delay will cause increased implementation costs, as many healthcare providers and health plans will need to maintain two systems (ICD-9 and ICD-10). Delaying ICD-10 increases the cost of keeping personnel trained and prepared for the transition. Other systems, business processes and operational elements also will need upgrading. More resources will be needed to repeat some implementation activities if ICD-10 is delayed.

10) Jobs Will Be Lost. To prepare for the transition, many hospitals and healthcare providers have hired additional staff whose jobs will be affected If ICD-10 is delayed.

And Finally...


We Can’t Wait for ICD-11. The foundations of ICD-11 rest on ICD-10 and the foundation must be laid before a solid structure can be built. ICD-11 will require the development and integration of a new clinical modification system. Even under ideal circumstances, ICD-11 is still several years away from being ready for implementation in the United States.

Tell us what you think of this Top 10 List. Do you agree? Or do you think ICD-10 should be delayed? We welcome your comments.

Our Response to ICD-10 Delay

The Department of Health and Human Services (HHS) announced on Thursday that they plan to delay ICD-10. With no specifics on what this delay will entail, it’s causing a lot of confusion and speculation about what is to come. We feel it was very irresponsible for HHS and the Obama Administration to make those statements without giving a clear plan. 

As we stated back in November when the AMA began opposing ICD-10, we disagree with a delay. We firmly believe conversion to ICD-10 is long overdue and delaying it will only increase health care costs and the burden on everyone.

We are very disappointed with HHS’ decision, which contradicts everything they have been saying. On CMS’ November 17^th national provider call, representative Pat Brooks said, “This is a firm implementation date, and there will be no delay.” CMS and HHS have been adamant all along that there would not be a delay. In turn, the health care community has spent a lot of time and money investing in new processes and systems. By going back on their statements, they are continuing to lose credibility.

Vendors, as well as publishers, educators, colleges, consultants, and many others, have already spent millions of dollars getting ready for conversion. It has even spurred job creation— for example new positions like ICD-10 Project Manager.  Even health care providers like hospitals and home care agencies have invested significant resources into the transition. With a delay, all of these groups will have to re-work what they've already done and it will cost more money. This added cost for vendors will be pushed down to providers, and then consumers. 

This decision also has a lot of political pressure and motives behind it. CMS’ Acting administrator Marilyn Tavenner made the announcement that they would re-evaluate the timeline at an AMA meeting. It’s important to note Tavenner is currently vying for the official appointment and AMA backed her nomination in November.

We’re also concerned about HHS’ use of the term "compliance" date, suggesting ICD-10 will be implemented per schedule, but providers will have a leeway period where they won't be found in non-compliance. In some instances a leeway period makes sense, for example with the new Face-to-Face requirements, claims were allowed to go through for three months after implementation.  But if this happens with ICD-10, it can be extremely harmful because vendors will have to work in two different sets of codes at once, in turn driving up costs and administrative burden even more.

While we anxiously await HHS’ new plan, we’ll continue our planning with the October 1, 2013 deadline in mind. We suggest no one stop in their preparations and hopefully we will quickly receive a revised plan from HHS.

Our hope is that the delay is brief because the shift to ICD-10 is a big step to improving health care in this country. It will make our healthcare system more efficient and cost effective and improve the level of care that this nation needs.

We're here to make the transition to ICD-10 pain-free and easy for home care agencies. Please contact us anytime to discuss how your organization can have a smooth transition.

Non-Compliance: The Unintentional Kind

With instances of Medicare fraud fraught in the headlines, compliance has become a hot-button issue for our industry. Companies have faced fees of up to hundreds of millions and even jail time for being found in non-compliance.

US Assistant Secretary of Health and
Human Services, Ben Sasse

Just last week at the Home Care 100 Conference, keynote speaker, former US Assistant Secretary of Health and Human Services, Ben Sasse, said that fraud and self-policing should be our top concerns. He cited shocking estimates of widespread fraud and the devastating effects it has on us as an industry, especially in Washington.

We know we don’t have to preach to you about not being fraudulent. You are all ethical individuals. But, in a lot of instances, non-compliance can happen unintentionally. With the increasing amount of regulations (several resulting from health care reform) and differing interpretations of those regulations, many times it’s the “good guys” that are getting themselves into trouble. This is especially true for the small agencies who are stretched thin and doing what they can to survive. Can you imagine if one of them got into trouble? They would not be able to weather the storm.

At Daymarck, compliance is at the cornerstone of our business. It is our first and foremost priority. We never “up-code,” “re-sequence,” or use filler codes, and we code every single home care agency the exact same. We stay up to date with the constantly changing rules and regulations to ensure our clients are 100% compliant.

You should be able to keep all the hard work that you do. That’s why no matter if you are a home health provider, institution, clinician or biller, compliance needs to be your #1 priority.

Feel free to reach out to us to discuss ways you can ensure compliance, including setting up a policy and reporting structure. 

Home Care 100 Recap

10th Anniversary ice sculpture.

Last week we attended the 10th annual Home Care 100 Executive Management Conference in Orlando, Florida. What an amazing event! We want to thank Lincoln Healthcare Events and the other partners for making it happen.

This was Daymarck’s first year attending and we did so in a big way as an executive level partner along with major healthcare companies Abbot Nutrition, Cardinal Health, GE Capital Healthcare, and several others. The professional development sessions and networking with providers and partners was invaluable as we continue to pursue our purpose of enhancing home care one code at a time.

In addition to the sponsor partners, representatives from nearly 100 providers from across the country were in attendance sharing ideas and listening to home care, business and regulatory experts discuss the state of home care in today’s environment.

As a growing medical coding company, we were excited to join together with some of the top minds in home care to learn from one another and to discuss the future of the industry. We believe this was our first step in what we hope will be a long-lasting relationship with Home Care 100.

The conference’s educational program was designed to explore innovative ways to improve patient care, strategize a plan to remain successful in this tough economy, and talk about topics we at Daymarck work to address on a daily basis – how to prepare for upcoming changes, such as ICD-10.

Incredible keynotes included Dr. Morten Hansen, co-author with Jim Collins of book Great by Choice: Uncertainty, Chaos and Luck – Why Some Thrive Despite Them All. He energized the crowd with his principles for building truly great enterprises. The closing general session keynote was James Heywood who shared his inspirational and thought-provoking presentation on the creation of PatientsLikeMe and his personal stories related to his brother and his struggle with ALS.

From Day 1, through our professional development to activities and social events, the Daymarck team was proud to be a part of this event. For more information on Home Care 100, visit www.homecare100.com. Feel free to check out our photos of the event on Facebook or visit www.daymarck.com to learn more about our offerings.

Are your vendors prepared for ICD-10?

Are your vendors prepared for ICD-10? 

This question may be on your mind lately, which is a good thing. Making sure your vendors are prepared for ICD-10 is crucial and should be as soon as possible.

Unfortunately, many home care professionals can’t say that their vendors are prepared and ready for ICD-10. When we asked this question during our ICD-10 survey at the 2011 NAHC Annual Show, nearly half (46%) said “no” or “not sure” if their vendors are prepared.

We need to get this number way down. Talking to your vendors is one of the first things you should do in your ICD-10 planning to make for a smooth transition.

When you ask your vendors (point of care, EHR, billing, etc.) what they are doing to prepare, they should be able to tell you their clear plan leading up to implementation and how they will support you during the transition. If they cannot, you may want to consider an alternative vendor.

CMS has provided more detail on what specifics you should discuss with your vendors here.

And check out our helpful list of 9 other things you should be doing now to make for smooth transition.