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Inappropriate and Questionable Billing by Medicare Home Health Agencies


In 2010, Medicare paid $19.5 billion to 11,203 home health agencies (HHA) for services provided to 3.4 million beneficiaries. Recent investigations and prior Office of Inspector General studies have found that home health services are vulnerable to fraud, waste, and abuse.


We analyzed data from home health, inpatient hospital, and skilled nursing facility claims from 2010 to identify inappropriate home health payments. In addition, we identified HHAs that billed unusually high amounts according to at least one of our six measures of questionable billing. Although these six measures indicate potential fraud, there may be legitimate reasons for an HHA to exceed the threshold for unusually high billing on any of the six measures. We also determined the geographic locations of HHAs that had questionable billing.


In 2010, Medicare inappropriately paid $5 million for home health claims with three specific errors: overlapping with claims for inpatient hospital stays, overlapping with claims for skilled nursing facility stays, or billing for services on dates after beneficiaries' deaths. Further, we found that approximately one in every four HHAs exceeded the threshold that indicated unusually high billing for at least one of our six measures of questionable billing. Overall, HHAs with questionable billing were located mostly in Texas, Florida, California, and Michigan.


We recommend that CMS (1) implement claims processing edits or improve existing edits to prevent inappropriate payments for the three specific errors we reviewed, (2) increase monitoring of billing for home health services, (3) enforce and consider lowering the 10 percent cap on the total outlier payments an HHA may receive annually, (4) consider imposing a temporary moratorium on new HHA enrollments in Florida and Texas, and (5) take appropriate action regarding the inappropriate payments we identified and HHAs with questionable billing. CMS concurred with all five recommendations; however, it disagreed with our estimate of the inappropriate payments for home health claims overlapping with claims for inpatient hospital stays and skilled nursing facility stays.