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Medicare Often Made Overpayments to New England Home Health Agencies for Claims Without Required Outcome and Assessment Information Set Data for Calendar Year 2010

The regional home health intermediary (RHHI) that processes and pays claims to home health agencies (HHAs) for six New England States paid Medicare claims for which HHAs had not submitted the required Outcome and Assessment Information Set (OASIS) data. The objective of this review was to determine whether the RHHI made Medicare payments only for claims for which HHAs had submitted accepted OASIS data. Of the 100 claims that we sampled, the RHHI made payments totaling $157,000 for 65 claims that should not have been paid because the HHAs had not submitted accepted OASIS data. We estimated that the RHHI made $25.1 million in Medicare overpayments because it did not deny claims that HHAs had submitted without the required OASIS data, which is a condition of payment.

Overpayments occurred because HHAs often had inadequate controls for the submission of OASIS data. Furthermore, Medicare payment controls were inadequate to prevent or detect payments to HHAs for claims that were missing accepted OASIS data. Without adequate controls, the Centers for Medicare & Medicaid Services has a limited ability to prevent payments to HHAs that have not submitted accepted OASIS data.

We recommended that CMS (1) adjust the 65 sampled claims for overpayments of $157,000 to the extent allowed under the law; (2) consider reopening the 16,482 nonsampled claims of which 3,819 claims were paid before OASIS data were accepted and 12,663 did not match to OASIS data, review our information on these claims, and recover any overpayments to the extent allowed under the law; (3) complete the process that would allow the Fiscal Intermediary Shared System to interface with State survey agency systems to identify, on a prepayment basis, HHA claims without accepted OASIS data submissions, which could have resulted in savings totaling $25.1 million during CY 2010 for claims paid by one RHHI; and (4) encourage RHHIs to conduct periodic postpayment reviews of HHA claims, which would include ensuring OASIS data supports claims, until sufficient prepayment controls are established.

CMS fully concurred with our first and third recommendations, partially concurred with our second recommendation, and did not concur with our fourth recommendation. In addition, CMS did not concur with a recommendation in our draft report. We agreed with CMS's rationale for not concurring with that recommendation and have omitted it from the final report.