Review of Payments Made by Palmetto Government Benefits Administrators for Home Health Services Preceded by a Hospital Discharge

EXECUTIVE SUMMARY:

The Centers for Medicare and Medicaid Services provides for a lower payment for home health services rendered to beneficiaries discharged from an acute care hospital within 14 days immediately preceding admission to home health care.  Based on a statistically valid sample, we estimate overpayments of approximately $10 million to home health agencies (HHAs) were made by Palmetto Government Benefits Administrators (Palmetto) for fiscal year 2001 for claims that did not meet this 14-day requirement.  These overpayments occurred because HHAs did not provide the necessary or correct information to Palmetto, and Palmetto had not established adequate postpayment controls to detect HHA claims that were billed incorrectly.  In addition to financial adjustments, we recommended that Palmetto provide education to HHAs to ensure that beneficiary discharge data is completed accurately on patient assessment instruments.