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Home Health Agencies Under Scrutiny



By Philip J. Chapman


Following multiple reports issued by the Department of Health and Human Services, Office of Inspector General (HHS-OIG) calling for tightened oversight of home health providers through the implementation of additional sanctions for non-compliant home health agencies (HHAs), on November 8, 2012, the Centers for Medicare and Medicaid Services (CMS) released its final rule updating the home health prospective payment system for calendar year 2013.  Of particular note, this final rule allows for increased scrutiny and oversight of HHAs through provisions granting CMS new options for surveying HHAs, as well as new sanctions for HHAs found to be out of compliance.  All HHAs should be aware of the new survey and sanction options outlined in the final rule.

According to the final rule, HHAs will now be subject to a standard survey at least once every 36 months.  The general requirements regarding the survey and certification process are codified at 42 C.F.R. part 488, and specific survey instructions are detailed in the CMS State Operations Manual (SOM).  These standard surveys will be unannounced and performed by the state agency or an accrediting organization.  The objective of the standard survey is to review the HHA’s compliance with a select number of conditions of participation (CoP).

In addition to the standard survey, HHAs will also be subject to other survey types, including:

  • Abbreviated standard survey:  similar to the standard survey, but not as broad as a standard survey.  It concentrates on a smaller number of CoPs determined to be an area of concern. This survey is conducted within two months of a specific concern, receipt of “a significant number of complaints reported against the HHA (as determined by CMS)”, or a change in ownership, administration or management of the HHA.
  • Extended survey:  used to ensure compliance with additional CoPs that were not surveyed in the standard survey (this can be all unreviewed CoPs or a focused number of CoPs), or to review certain policies and procedures in which the surveyors determined the HHA provided substandard care.  An extended survey could be conducted with any standard survey, but will be conducted when any condition-level deficiency (see below) is cited during a standard survey.  If conducted, it must be conducted within 14 calendar days after completion of a standard survey which found the HHA was out of compliance with a CoP.
  • Partially extended survey:  conducted to determine the existence of deficiencies and/or deficient practices that were not fully examined during the standard survey.  This survey is conducted when a standard-level noncompliance is identified and the surveyor determines that a more comprehensive review of the CoPs examined under the standard survey would result in condition-level deficiencies, or when the surveyor believes that a deficient practice existed at a standard or condition-level that was not examined during the standard survey.
  • Complaint survey:  conducted when a complaint against the HHA is received.

The final rule provides for two different levels of deficiency for HHAs:  standard-level and condition-level.  An HHA will be cited with a standard-level deficiency for any noncompliance with one or more of the standards that make up the CoPs for HHAs.  A condition-level deficiency will be cited when a survey reveals one or more deficiencies that are of such character as to substantially limit the provider’s or supplier’s capacity to furnish adequate care or which adversely affect the health and safety of patients.  Generally, this means a condition-level deficiency is any deficiency that results in actual or potential harm to the patient.

After a deficiency is cited, but before the imposition of any sanction, HHAs will have to submit a plan of correction (POC) detailing the ways in which the HHA will correct each deficiency (whether standard or condition-level) and the methods used to ensure the deficiency does not take place in the future.

The finding of a condition-level deficiency may lead to the implementation of the alternative sanctions listed in the final rule (CMS considers an HHA “to be in substantial compliance with the CoPs when all deficiencies cited are at a standard-level”).  CMS now has several sanctions in its arsenal of tools to use against non-compliant HHAs.  In addition to the existing alternative sanctions of termination, civil money penalties, suspension of payments and appointment of temporary management, the final rule adds two additional alternative sanctions which may be imposed against an HHA: directed plans of correction and directed in-service training, both of which CMS states have been “successfully used in our enforcement of the nursing home requirements.”

The final rule also finalizes CMS’s prior proposals to implement a 23-day termination “fast track”, similar to that used for skilled nursing facilities, for instances where CMS determines that an HHA’s deficiencies immediately jeopardize the health and safety of its patients.  If the immediate jeopardy situation is not addressed and resolved within 23 days from the last day of survey, CMS will terminate the HHA’s provider agreement.

The new survey process is just one of many focused initiatives aimed at providing greater oversight to HHAs.  Through the OIG’s multiple recent reports, the increased use of audit tools such as Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), Medicaid Integrity Contractors (MICs) and Zone Program Integrity Contractors (ZPICs), and the implementation of new requirements such as mandatory compliance programs under the Patient Protection & Affordable Care Act (PPACA), the government has made it very clear that participating providers of all types must fully comply with applicable medical necessity, coverage, documentation, coding and billing rules, and that the government will be raising their level of oversight and scrutiny of providers to make sure they do so.   HHAs have been a particular focus of these efforts.  For example, in March 2012, a physician and five owners of Texas home health agencies were indicted in what was at that time called “the largest alleged home health fraud scheme ever committed” by the Assistant Attorney General for the Justice Department’s Criminal Division, allegedly totaling nearly $375 million for home health services either not needed or never provided.  The case involved 11,000 home health care patients and 500 home health care agencies over a nearly six-year period, and CMS announced the suspension of an additional 78 HHAs based on credible allegations of fraud against them related to same.  Instances such as this are a large reason why governmental concern over health care fraud, including fraud in HHAs, remains at an all-time high.  In fact, one OIG report released in 2012 found that 1 in 4 HHAs had questionable billing, and another from December 2012 states that HHAs are still “considered to be particularly vulnerable to fraud, waste, and abuse.”  As a result of this concern, all HHAs, regardless of size, revenues, or location, should expect more audits and more surveys as described above, as these are key tools in the government’s arsenal to detect and combat fraud.

HHAs should regularly and affirmatively review their operations, coding and billing practices to ensure that their practices squarely fall within the rules.  This should include documentation practices, billing claims, policies and procedures, business practices, employment agreements, medical director contracts, leases, etc.  It is important that HHAs develop an effective compliance program that acts both proactively to identify and prevent potential deficiencies, as well as reactively to mitigate and correct any deficiency that is identified.  At Mitchell Day Law Firm, our skilled health care attorneys have years of experience crafting successful plans of correction, compliance programs, and survey appeals for our many varied health care clients.  If you need assistance in creating a comprehensive compliance plan, producing and/or implementing a plan of correction, or appealing a survey result, please contact Julie B. Mitchell or Philip J. Chapman at Mitchell Day Law Firm at (601) 707-4036.