Home Health Care Firms Inappropriately Billed Medicare, Report Finds

The three largest home health care companies inappropriately billed Medicare for millions of dollars by tailoring the care they provided to beneficiaries to reap maximum reimbursement payments, according to a Senate Finance Committee report, The Hill's "Healthwatch" reports.

The report found that home health care agencies Amedisys, Gentiva Health Services and LHC Group ordered medically unnecessary therapy visits to reach thresholds that triggered additional Medicare payments (Pecquet, "Healthwatch," The Hill, 10/3).

Background

Medicare reimbursements are calculated in part by the amount of at-home therapy visits that patients receive, plus an extra fee that is made available when a patient hits a certain number of visits. Between 2000 and 2007, Medicare paid companies a flat fee of about $2,200 for up to nine home therapy visits and added another $2,200 if therapy continued to 10 or more visits (California Healthline, 4/28/10).

Medicare spends about $19 billion on home health care annually, according to the report (AP/Washington Post, 10/3).

Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) launched an investigation in May 2010 following a Wall Street Journal analysis, which found that the three home health care companies might have adjusted patient visits so that they qualified for the extra payment (California Healthline, 4/28/10).

Report Details

The report noted that internal documents and emails from the three companies showed evidence that management encouraged employees to manipulate the Medicare reimbursement system.

The investigation showed a concentration in the number of therapy visits at or just above the threshold at which the bonus payments were triggered (Ethridge, CQ Today, 10/3).

The report notes that such practices at best "represent abuses" of the system, adding, "At worst, they may be examples of for-profit companies defrauding" the program.

The report suggests that CMS uses measures of "patient well-being and health" rather than the quantity of visits for determining payments. Grassley called for the government to "fix the [reimbursement] policy that lets Medicare money flow down the drain."

Companies Respond

In a statement, Amedisys said, "We are disappointed with the committee's conclusions, and we stand by our company's integrity, ethics, and patient-care practices."

Meanwhile, LHC Group provided the committee with an independent analysis that found the company's "therapy utilization and reimbursement per episode" were "both 13% below the national average," according to Pete November, LHC's general counsel (Carreyrou, Wall Street Journal, 10/3).