Review of Home Health Agencies' Billing for Services Preceded by a Hospital Discharge

EXECUTIVE SUMMARY:

Previous audits identified overpayments to home health agencies that did not comply with Medicare requirements for billing services preceded by discharges from both an acute care hospital and a postacute care facility. 

Our objective was to determine whether home health agencies complied with Medicare requirements in billing for fiscal years 2002 and 2003 services that were preceded by discharges from both an acute care hospital and a postacute care facility.  Home health agencies did not comply with Medicare requirements in billing for services that were preceded within 14 days by discharges from both an acute care hospital and a postacute care facility.  Specifically, the home health agencies improperly coded all 400 sampled claims as discharges from a postacute care facility only, rather than discharges from both an acute care hospital and a postacute care facility.  Overpayments to home health agencies for these claims totaled $122,674.

We recommended that CMS:  (1) instruct its regional home health intermediaries to recover the $122,674 in overpayments related to the 400 sampled claims, (2) direct the intermediaries to use our files containing the remaining 142,069 paid claims with billing errors to recover additional overpayments estimated at $48 million, (3) emphasize to home health agencies the need to strengthen billing controls by educating their staffs regarding the identification of all facilities that discharged the beneficiary within 14 days of the home health episode, (4) monitor the effectiveness of the newly established prepayment edits and postpayment controls, and (5) develop data analysis techniques to identify home health agencies with significant numbers of claims rejected or adjusted by the newly implemented payment controls and subject those home health agencies to appropriate corrective action.  In its comments on our draft report, CMS concurred with the recommendations.

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