LegalEase: When it comes to PPS, beware of underutilization
LegalEase
When it comes to PPS, beware of underutilization
By Elizabeth E. Hogue, Esq.Burtonsville, MD
Home health agencies have been under fire for several years to reduce utilization. Overutilization as a form of fraud and abuse in the Medicare and Medicaid programs has been at the forefront of agency managers’ thinking because of the extraordinary emphasis placed upon this issue by many regulators and enforcers.
A federal statute known as the False Claims Act has historically served as the basis for fraud enforcement in the area of overutilization. That is, enforcers have taken the position that whenever providers send claims to the government in order to receive payment, they promise that the care they provided was reasonable, necessary, and appropriate. If the government determines that care provided did not meet these criteria, the claims are false claims even though everything written on the claim form is true.
An agency may, for example, be ordered by a patient’s physician to apply Betadine to the patient’s pressure ulcer. Providers know that the application of Betadine is no longer considered to be consistent with current standards of care. Nonetheless, field staff visit the patient and follow the physician’s orders.
When the agency submits a claim to the fiscal intermediary for payment, everything written on the claim form is true. The physician ordered the application of Betadine, and agency staff followed the physician’s orders. The claim, however, is still a false claim because the care that was provided was not considered to be reasonable, necessary, and appropriate as it was inconsistent with applicable standards of care.
Likewise, fraud enforcers have taken the position that providers are required to provide reasonable, necessary, and appropriate care. When health care providers fail to do so, especially in order to save money, they are engaging in fraud in the form of underutilization.
While home health agencies focused on overutilization, managed care organizations that contract to provide care to Medicare beneficiaries are very familiar with false claims in the form of underutilization. Specifically, these so-called "Medicare HMOs" are required, at a minimum, to provide the same benefits that Medicare beneficiaries would receive if they remained in the fee-for-service Medicare program in exchange for a flat monthly fee per beneficiary. In view of these circumstances, it is clear that HMOs can save money if they fail to provide services.
Home health agencies have experienced underutilization by HMOs. Staff have taken note of instances, in which patients were receiving a variety of services, for example, including skilled nursing services, home heath aides, and at least one therapy. Agencies have received no denials for these services.
Medicare patients who decide to enroll in an HMO may see a precipitous drop in services authorized for payment by the HMO despite the fact that Medicare did not deny any of the services that the patient received prior to enrollment. In other words, on the day prior to enrollment, patients received a certain number of services.
The next day, services are reduced dramatically even though there has been no change in the patient’s clinical condition that would justify such a reduction in services.
This is a classic example of underutilization by HMOs. Agencies should be attuned to this issue and may even wish to explain to the staff of such HMOs that this conduct may constitute fraud and abuse.
In addition, managers must recognize that the spotlight of underutilization will be turned squarely upon home health agencies under the prospective payment system (PPS).
As a Centers for Medicare and Medicaid Ser-vices, formerly HCFA, official said recently, the "junkyard dogs" are already out sniffing around, and they tend to see issues of underutilization in terms of "black and white" as opposed to the nuances that always surround determinations about appropriate care.
This means that it is time for agencies to transfer their attention to this new issue of fraud and abuse within the home care industry. What the government requires of agencies is that they cannot either underutilize or overutilize services. Instead, they are required to be right down the middle, i.e., providing all care that is reasonable and necessary for their patients.
Of course, the key difficulty with this requirement is that it is difficult, if not impossible, to articulate what is reasonable, necessary, and appropriate care in terms of national standards of care. This means that such care is often in the eye of the beholder, i.e., the result of subjective determinations by a variety of regulators who may not agree with each other.
Nevertheless, agency staff must take a hard look at this issue under PPS. Consistent care to patients with the same clinical diagnosis utilizing clinical/care pathways will undoubtedly help agencies justify their stance that care provided was reasonable, necessary, and appropriate. A word to the wise will surely suffice.
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