Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Compliance With Billing Provisions Under The Prospective Payment System For Home Health Agencies' Therapy Services - Pacific Home Health Care, Inc.," (A-05-04-00103)

 

September 29, 2006

PDF File Complete Text of Report is available in PDF format (1.03 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

The objective of this audit was to determine whether selected home health claims that included therapy services provided by Pacific Home Care (Pacific) to Medicare beneficiaries met Federal requirements and were appropriately paid. Pacific was overpaid $108,849 for therapy and skilled nursing services that did not comply with Federal requirements. A medical record review performed by the Program Safeguard Contractor determined that 51 of 100 sampled claims, with 10 or more therapy services, were inappropriately paid because they were: (i) not reasonable and medically necessary; (ii) not provided as ordered by the physician; (iii) not supported by documentation in the medical record; or (iv) based on incorrect payment codes, which resulted in lower allowable reimbursement. We recommended that Pacific work with the intermediary to reimburse the Medicare program $108,849 for unallowable costs, identify and adjust claims for Medicare overpayments received subsequent to the audit period, establish quality assurance procedures, and strengthen controls to ensure that claims are medically necessary, properly authorized by a physician, and supported by documentation in the medical record. Pacific did not directly address our recommendation to refund $108,849, but stated that 13 claims should be accepted because of errors that its computer system had generated during our review. Pacific stated that they have established better controls.