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Documentation of Coverage Requirements for Medicare Home Health Claims


From 2002 to 2008, the number of home health agencies (HHA) grew by 39 percent from 7,052 to 9,801. Medicare spending on home health increased 84 percent from $8.5 billion in 2000 to $15.7 billion in 2007. The rise in home health spending leads to concerns about the potential for improper payments due to fraud and abuse.


We reviewed medical records of home health care for a sample of 495 beneficiaries to determine whether Medicare coverage requirements were met. We also analyzed Medicare claims to document the extent to which patients were under the care of the physician ordering home health services. We calculated the proportion of claims that had a corresponding billing from a physician for visits with that beneficiary at any time 3 months before and 3 months after the episode of care.


Our medical record review showed that in 2008, 98 percent of beneficiaries met the homebound requirement and needed skilled nursing care or therapy services and that beneficiaries were under the care of a physician. HHAs submitted 22 percent of claims in error because services were not medically necessary or claims were coded inaccurately, resulting in $432 million in improper Medicare payments. Also, HHAs upcoded (i.e., billed at a level higher than warranted) about 10 percent ($278 million) of claims and downcoded (i.e., billed at a level lower than warranted) about 10 percent ($184 million) of claims.


Identifying home health fraud and abuse is a significant challenge that requires concentrated and sustained efforts using a variety of methods. Given the general concern about risks to the Medicare program in the home health area, further investigations beyond the medical record are needed to determine whether beneficiaries are eligible, services are furnished, and Medicare requirements for payment are met. OIG will continue to monitor Medicare home health claims to determine whether the services are appropriate and merit payment.