HH industry says OIG error rate report politically charged
HH industry says OIG error rate report politically charged
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON The home care industry is sharply criticizing the Department of Health and Human Services (Washington) Office of Inspector General’s (OIG) Nov. 1 report that purported to find a 19% error rate in home health claims across four major states, including California, Illinois, New York, and Texas.
The OIG argued that because the rate setting methodologies the Health Care Financing Administration (HCFA; Baltimore) used to develop the new home health prospective payment system (PPS) did not adequately adjust for these improper payments, the PPS rates are likely to be inflated.
The OIG urged HCFA to consider the 19% rate of improper or highly questionable services as a factor before making any changes to the current home health payments. It also urged HCFA to consider making an equitable adjustment to the proposed home health PPS rates or update factors to take into account the improper and highly questionable payments that were included in the rate calculations.
HCFA responded that it lacks the statutory authority to make changes to current payments under the interim payment system. The agency also defended its payment methodology under PPS. In addition to conducting a statistically representative sample of home health agency cost reports, the agency pointed out that it conducted comprehensive audits of those cost reports.
"The scope of these audits went well beyond our usual level of effort, and the industry has complained that this level of audit resulted in a higher level of disallowances than ordinarily would be the case," said HCFA Deputy Administrator Mike Hash. As a result, the agency concluded that the rates do not reflect significant excess cost.
Home care representatives say the OIG’s findings are politically motivated. "In the past we have tried to give the OIG the benefit of the doubt," said the National Association for Home Care’s (NAHC; Washington) Bill Dombi, "but this study seems to have been almost a political exercise."
The report, Results of Operation Restore Trust Audit of Medicare Home Health Services in California, Illinois, New York and Texas, contends that 19% of the services in the four states during the nine-month period ending Sept. 30, 1998, were improper or highly questionable and did not meet Medicare reimbursement requirements.
That is a dramatic decline from the OIG’s previous audit, which estimated that 40% of the services in the same four states during the 15-month period ending March 31, 1996, did not meet Medicare reimbursement requirements. "Our current review found the error rate in home health claims has been significantly reduced," concluded the OIG, "but remain way too high.
"In our opinion, the majority of the unallowable services continued to be provided because of inadequate physician involvement," the OIG said. "We found physicians did not always review or actively participate in developing the plans of care they signed."
The OIG also noted that the error rate for all Medicare fee-for-service payments in FY98 was estimated at only 7.1%.
The OIG said its review estimated the intermediaries approved unallowable or highly questionable claims with charges totaling about $675.4 million out of the four-state universe of $2.3 billion in charges. When comparing the results of the two reviews, the OIG noted a dramatic decrease in the error rate for services that were not reasonable and necessary from 18% in the prior review to 6% in the current review.
For services rendered to beneficiaries who were not homebound, the error rate dropped from 11% to 3%, and for services without valid physician orders, the error rate dropped from 10% to 4%.
NAHC’s Dombi took strong exception with those findings, however. Nearly 6% of the 19% relates to claims that they had no documentation on because the agencies had closed, according to Dombi. Roughly another 3% were for claims for existing home health agencies where the OIG was unable to get the documentation, he added. "Now, instead of 19%, we are somewhere closer to 9% for an error rate," said Dombi.
Dombi also pointed out that the OIG makes no reference to the level of reversals that have occurred on home health claims both at reconsideration and before an administrative law judge (ALJ). "Those rates of reversals are very high," said Dombi over 30% for reconsideration and nearly 80% before an ALJ. "We have no way of assessing the accuracy of those decisions," Dombi added.
The OIG recommended that HCFA revise 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 and instruct the intermediaries to collect the overpayments identified in our sample. The agency concurred with those recommendations.
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