Review of Medicare Home Health Services in California, Illinois, New York, and Texas

EXECUTIVE SUMMARY:

This final report points out that erroneous payments made to home health agencies (HHA) in California, Illinois, New York, and Texas have been significantly reduced in comparison to the payment error rate found in our previous review, but remain way too high. Our current review estimates 19 percent of the services in the four States during the 9-month period ending September 30, 1998 were improper or highly questionable and did not meet Medicare reimbursement requirements. This compares to our previous audit in which we estimated 40 percent of the services in the same four States during the 15 month period ending March 31, 1996 did not meet Medicare reimbursement requirements. For our current review, we estimate the intermediaries approved unallowable or highly questionable claims with charges totaling about $675.4 million out of the four State universe of $2.3 billion in charges. Recommendations call for the Health Care Financing Administration to: (1) revise Medicare regulations to require the certifying physician to examine the patient before ordering home health services and see the patient at least once every 60 days; (2) consider the 19 percent rate of improper or highly questionable services as a factor before making any changes to the current HHA payments; (3) consider making an equitable adjustment to the proposed HHA prospective payment system rates or update factors to take into account the improper and highly questionable payments that were included in the rate calculations; and (4) instruct the intermediaries to collect the overpayments identified in our sample.