Government targets post-acute care providers


Over the past year, it’s become increasingly clear that the government is focusing much of its fraud-fighting efforts on post-acute care providers of just about every variety. Hospice, home health, personal care services and skilled nursing providers faced a new level of scrutiny from federal prosecutors, the Centers for Medicare & Medicaid Services, and the Office of Inspector General.

Skilled nursing facilities: The OIG said Medicare made $1.1 billion in unnecessary payments to SNF providers in 2012 and 2013, most of which were linked to high therapy costs. By the beginning of 2016, the government had notched its first major settlement with RehabCare Group—a subsidiary of Kindred Healthcare—to resolve charges that the nation’s largest rehab provider had provided unreasonably high levels of therapy in order to maximize reimbursement.

Ten months later, the DOJ outdid itself, announcing a $145 million settlement with Life Care Centers of America to resolve similar charges of inflated rehab payments. In between those two settlements, the CMS released SNF utilization and payment data that pointed to some disturbing trends regarding payments made for high-level therapy. In July, three South Florida residents were charged with using a network of 20 SNFs and assisted living facilities to steal $1 billion from Medicare and Medicaid—the highest dollar fraud scheme to date.

Beyond the concerns over kickbacks and therapy payments, the feds are also exploring worthless services claims against nursing home providers, including a chain in Tennessee that’s facing FCA charges for violating staffing ratios and failing to properly administer medications.

Those worthless services cases could intensify following a new CMS rule barring nursing homes from using arbitration agreements. In April, the DOJ announced it was launching 10 Elder Justice Task Forces targeting nursing homes “that provide grossly substandard care to their residents.”

Hospice: In April, the OIG released a report showing Medicare spent $268 million on inappropriate claims for inpatient hospice services in 2012. Legal experts piled on, adding that the hospice industry was vulnerable to fraudulent practices in which beneficiaries are improperly diagnosed as terminally ill in order to collect reimbursement from Medicare.

Since then, the OIG has warned hospice providers that they need to improve documentation gaps, while calling on the CMS to provide better oversight and enforcement. However, an ongoing case against hospice chain AseraCare aims to answer a question that’s been nagging the industry for a long time: When is a patient considered terminal?

In April, an Alabama judge dismissed the government’s claims that AseraCare submitted more than $200 million in improper hospice claims, but federal prosecutors appealed the case. Now it’s before the 11th U.S. Circuit Court of Appeals, which has the unenviable task of trying to answer that murky question. 

Home health: The home health industry is seeing a healthy dose of scrutiny from government agencies, along with new payment regulations that have caused uproar among providers and lawmakers.

Home health fraud and abuse is nothing new, but the issue picked up steam in 2016 to the point that the CMS announced a new pilot project requiring preclaim reviews for home health claims in five states. Those reviews kicked off in Illinois, Florida and Texas, even as industry leaders have urged the CMS to “press pause” on the new requirements. Michigan and Massachusetts are expected to begin preclaim reviews in January.

Initially, however, the CMS had proposed a far more stringent preauthorization pilot project that would have required CMS approval for home health services. The agency ultimately walked back that proposal after more than 100 representatives openly criticized the pilot project.

Meanwhile, the OIG identified more than 500 home health agencies as billing outliers, and investigators said the agency was using billing data to focus on geographic hot spots. On the bright side, new home health models are shaking up the industry by providing targeted services to homebound beneficiaries. 

Personal care services: Here’s another industry that is no stranger to fraud and abuse concerns, but it continued to grab the spotlight in 2016. In October, the OIG released a report outlining all the fraud vulnerabilities that have been lingering within the industry for more than a decade and revisited several basic recommendations that the CMS has routinely ignored.

Last year, a bill was introduced that would require states to have electronic verification systems for personal care services in an effort to identify improper payments. It’s still languishing in the House, with no sign of forward momentum. Still, it’s clear the feds have their eye on this unregulated sector. 

Government targets post-acute care providers