OIG zeroes in on home health fraud

Screengrab of Tyler Smith speaking in video

The home health industry continues to be a hotspot for potentially fraudulent activity based on a new report that outlines several suspicious billing patterns, coupled with a warning against unlawful physician compensation agreements.

In a report released Wednesday, the Office of Inspector General (OIG) identified more than 500 home health agencies as billing outliers based on five distinct characteristics:

  • No recent visits with the supervising physician
  • Episodes of care not preceded by a hospital or nursing home stay
  • A primary diagnosis of diabetes or hypertension
  • Claims from multiple home health providers
  • Claims submitted by multiple home health readmissions in a short period of time

In 2015, Medicare paid $273 million to 562 providers that demonstrated two or more of the characteristics indicating potential fraud. Using those same identifiers, the OIG also highlighted 27 geographic hotspots in 12 states, which included four of the five states involved in the Centers for Medicare & Medicaid Services' pre-claim review of home health providers.

In an “Eye on Enforcement” video released earlier this week, Tyler Smith, assistant inspector general for investigations at the OIG, noted that many of the identified hotspots also have high Medicare fraud rates, and underscored the agency’s reliance on data to identify fraudulent activities in an industry that has been considered vulnerable to improper payments for several years.

Wednesday's report, which also identified more than 4,500 physicains with suspicious billing patterns, coincided with an OIG alert warning home health agencies and physicians about potential kickback violations tied to physician compensation agreements. The OIG specified that compensation agreements could violate antifraud statutes if “even one purpose of the arrangement is to compensate a physician of his or her past or future referrals.”

The reports were released in conjunction with the Justice Department's arrest of more than 300 people associated with approximately $900 million in fraudulent billing schemes. In April, a former Texas doctor was convicted of recruiting homeless patients to bill Medicare more than $375 million.

To learn more:
- read the OIG’s report
- here’s the OIG’s alert on physician compensation
- watch the “Eye on Enforcement” video