The OIG’s list of problem providers sets off a storm of protest and fear
The OIG’s list of problem providers sets off a storm of protest and fear
The government gets egg on its face, but providers aren’t laughing
With the home care industry’s collective mental state already bordering on paranoia, it takes little effort nowadays for the federal government to push people over the edge, whether intentionally or inadvertently.
You know the current state of affairs: falling rates of Medicare reimbursement, loss of venipuncture benefit, Freedom of Choice mandates for hospital-based providers, Operation Restore Trust, fraud, abuse, FBI raids, IRS audits, and even a 1997 Office of Inspector General (OIG) study that found 40% of Medicare home health claims should never have been paid. All these developments have providers feeling like sitting ducks.
Then it should come as no surprise that the most recent news from Washington, DC in this case the so-called "problem provider" list should cause widespread panic, outrage, and condemnation among home care providers. And those are just the nice reactions.
Compiled by the OIG for the purposes of a study released in July 1997 titled "Home Health: Problem Providers and Their Impact on Medicare (OEI-09-96-00110)," the list, which quickly became known as the "700 Club," throughout the industry, contains the names of 698 home care agencies based in the original Operation Restore Trust states: California, Texas, Florida, New York, and Illinois. Including both hospital-based and freestanding agencies, all were classified as "problem providers."
The list first appeared in October when the Department of Health and Human Services responded to a Freedom of Information Act (FOIA) request filed by a California home care consultant. Shortly thereafter, the consultant wrote letters to unwary providers telling them of their inclusion on the list. Subsequently, the National Association for Home Care (NAHC) and the American Federation of Home Health Agencies (AFHAA) received copies, and the list hit the fan.
Hospital Home Health obtained a copy by filing an FOIA request in late November.
The OIG says that the list was compiled for statistical purposes as part of the study. Indeed, the report itself does not contain the list, but the report concludes that "more than 25% of the home health agencies in the ORT states are problem providers. Problem home health agencies received nearly 45% of Medicare home health payments in the ORT states." (See related table, p. 3.)
Nonetheless, the "700 Club" membership roll has caused a firestorm of protest among the providers whose names appear on it, bringing angry cries against what some call blatant abuse of federal power. Some accuse the OIG of going after industry leaders because of their high profiles, a charge the agency denies.
Deputy Inspector General George Grob, who authorized the study, has tried to reassure home health providers the list is not a blacklist or a hit list. "I want to allay the fears of the industry. The list was never meant to be released or meant as a list to go after industry leaders. We do not maintain such a list. This was only [compiled] for the study."
Grob points out that the study, which was released on the same day as another which concluded that 40% of paid home health claims were unallowable under Medicare rules, was meant "to identify vulnerabilities in the program. (See HHH, September 1997, p. 106.)
Moreover, Grob says, the list would not have been released had it not been for the California consultant’s FOIA request. But once the OIG received the request, the agency could not, by law, prevent its dissemination.
"There is no system of maintaining a list where we go after people," Grob insists. "I just don’t think that way. I cannot honestly say that anyone on the list currently has a problem [with the OIG], or if someone not on the list doesn’t have a problem. This was limited to the five ORT states. It is not a universe of all providers."
Grob thinks it is ironic that the adjective "problem" used in the study should provoke such a reaction. "We were actually trying to use a softer term rather than say fraudulent,’ " he explains.
"I couldn’t tell you [by the list] even if one agency on it broke the law. It was for an analytical study to identify program vulnerability."
The OIG report describes a "problem" agency as "one that has abused or defrauded Medicare or misappropriated Medicare funds through the cost report or claims process." The report states further that a problem agency was one identified by HCFA, a fiscal intermediary, the State certification and/or licensing agency, or the OIG as meeting one or more of the following conditions:
• has incurred significant uncollected overpayments;
• routinely submits cost reports with significant inappropriate and unallowable costs;
• files a cost report that is determined to be unauditable;
• routinely does not file cost reports within a reasonable time;
• has submitted multiple claims for services that are not medically necessary;
• has submitted multiple claims for services that were not rendered;
• continues to submit problem claims despite educational contacts;
• has significant certification deficiencies;
• has been referred to the fiscal intermediary’s program integrity unit;
• has been referred to the OIG by the fiscal intermediary.
Attorney William Dombi, director of NAHC’s Center for Health Care Law, says NAHC doesn’t believe the OIG had sinister intentions, but the trade association nonetheless is unhappy about the bad impression left by the study and the list.
"[The OIG] developed extremely broad criteria everything from fraud to multiple claims denials," he says.
And that broad criteria, perhaps more than anything else, is the reason the storm of outrage continues to howl.
Ann Howard, executive director of the American Federation of Home Health Agencies (AFHHA), says it now appears that even a legitimate difference between a provider and a fiscal intermediary over Medicare reimbursement is reason enough to be suspected of fraud.
Howard fears that the list is a sign that government regulation is getting out of control. "The agencies I know who are being harassed by the government are the ones willing to fight for the rights of the beneficiary for the care they need."
Howard disputes the government’s oft-repeated charge that fraud and abuse are rampant in home care.
"The abuse is of the provider and the beneficiary by the U.S. government," she says.
She is outraged by the list and says that the industry hospital-affiliated as well as freestanding agencies should also be outraged. "This should let home health agencies see that we’re all in this together. Nobody should consider themselves more virtuous than another."
An aide to a high-ranking Democratic congressman says, "The OIG didn’t want to release this thing, but the FOIA is pretty strong. Is it a screw up? Yes. But I don’t see it as a conspiracy."
The problem, the aide says, is that the OIG "ended up with both sheep and goats on the list. You had people on it who are about to get hammered and people on there by accident. That’s unfair to 95% of the honest providers who can’t get at the OIG to see the reasons why they are on the list."
The aide says that by including industry leaders on the list, the OIG intended to "show big results early" with its study. But it backfired.
"I can see what they were doing, but this is the wrong result. You don’t provide a list that makes every major provider look like a crook."
Susan Schulmerich, RN, MS, MBA, executive director of Montefiore Home Health in Bronx, Y, decries the list as a form of neo-McCarthyism, while David Baker, corporate director of home care services for OSF Healthcare System in Peoria, IL, likened the action to a trial of a Chinese dissident.
Both Montefiore and OSF are hospital-affiliated providers and are considered industry leaders. Neither organization has ever been accused of defrauding Medicare. And both Schulmerich and Baker serve on the NAHC’s board of directors.
Schulmerich says her agency made the list because Montefiore has had 43 billing disputes with its financial intermediary in the last few years. Yet "forty-two of forty-three claims [judgments] were found in our favor by the Administrative Law Judge," she says.
Most of these were daily wound cases, Schulmerich explains, in which it is difficult to determine when care will end, which is a requirement under current Medicare policy. Wound care patients, she says, tend to be chronic, long-term cases, but her intermediary, United Government Services, she says, "issues denials like clockwork."
Schulmerich says her nurses started taking pictures of the wounds as evidence for the judge, and these proved to be powerfully persuasive.
"We knew we had tweaked United Government Services," she concedes, "because we appeal everything. When they issue a denial, we appeal."
Schulmerich argues that the government is not thinking about the beneficiary. "What’s the option for the patient? The government says we are not providing care under Medicare guidelines, that care is not intermittent, and that there’s no finite and predictable end to care. What would the government like us to do with these patients? If they can’t come into home care, then the option is a nursing home or go back into the hospital or no care, and they likely die."
Schulmerich says that HCFA regulations permit daily visits with no predictable end of care in one case only a blind, insulin dependent diabetic unable to administer medication. However, she points out, if the patient is diabetic, but not blind and has a wound due to the diabetes, he or she cannot receive daily care. "That’s discrimination based on diagnosis," she argues. "The government makes up rules that don’t make sense."
Another agency that made the list was Beaumont (TX) Home Health Services, one of three freestanding agencies owned by Ruth Constant and Associates of Victoria, TX. Constant’s organization was the target of an excruciating 15-month FBI probe, set in motion by a disgruntled employee’s false statements. The provider was eventually exonerated in federal court but not without months of agonizing suspense. (See Hospital Home Health, May 1997, pp. 59-62.)
That experience has taught the agency the value of compliance programs, says Larry Leahy, director of program integrity for Ruth Constant and Associates. "My initial reaction [to being on the list] was that I wasn’t upset as director of program integrity. I feel very comfortable with the way we work with Medicare reimbursement rules. I’m just preparing for a visit from a fiscal intermediary or HCFA. We’re in good shape for proper billing and proper documentation."
Leahy says Beaumont Home Health Services "did not fall into any of those criteria categories [in the OIG report], but we did try to figure out why we were on the list."
Leahy believes the agency made the list because it provides IV services, "which take multiple visits. We feel our visits per beneficiary were higher than average. We were at 159 [per patient], and the state’s average was 125. So that’s the reason we think we came out on the list. In 1996 we had a high level of sicker patients [at Beaumont]. As of this September [1997], we were at 119 visits per beneficiary."
Despite being listed, Leahy, who serves on NAHC’s Certification Committee for Certified Home Care and Hospice Executives, says, "We feel comfortable we had need based on the acuity level and service required, particularly for IV patients. Not all of our patients were IV, but we had an unusually large number. But that’s based on referrals, and we have no control over that."
Sara Speights, director of government and public relations of the Texas Association for Home Care in Austin, asserts, "The OIG ought to disown that list. It’s faulty, sloppy, and it has no validity because, I tell you right now, the personal injury attorneys will use it. I think the OIG has a responsibility to be honest about it."
Speights blames the fiscal intermediaries as well. "The FIs had an interest in making that list look large. We know they have been under-funded to do a difficult job. This was an opportunity to make that point. I appreciate their difficult job, but I also recognize they had a cause to build that list as big as possible and with no accountability."
For its part, the OIG just wishes the list would disappear. "I wish I could wish it away," Grob concedes. "But all I can do is tell you what it was intended for. If [providers] think badly of me, I can assure you, the feeling is not mutual."
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