Serving the home health, home care and hospice industry since 1999.

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by Darcey Trescone, RN, BSN

The OIG recently published a report titled, "CMS Could Have Saved $192 Million by Targeting Home Health Claims for Review With Visits Slightly Above the Threshold That Triggers a Higher Medicare Payment." The report is based on CMS endorsed data mining methodologies, and a review of a small sample of claims pulled from 2017. The potential loss of $192 million is an extrapolated estimate based on findings within the micro sample provided.

What OIG Found

Of the 120 sampled claims the OIG reviewed, the report points out, 91, or about 75 percent, complied with Medicare requirements and 25 claims, or about 20 percent, did not. Four claims were found to have no documentation available to make a compliance determination.

OIG claims that Medicare improperly paid for a portion of the payment episode on 14 of the 25 claims and paid the full episode amount on 11 of the 25 claims, for a grand total of $41,613. Based on this 120-claim sample, the OIG extrapolated this dollar amount to determine that Medicare overpaid home health agencies nationwide $191.8 million for this audit period.

The OIG goes on to state, "The majority of the claims in our sample (20 of 25) that did not comply with Medicare requirements under the previous PPS methodology would also have not complied with those requirements under the new methodology." PDGM, "the new methodology," that went into effect January 1, 2020, revised the LUPA threshold from four visits to a threshold varying from two to six visits. Therefore, OIG is saying that slightly fewer than 17 percent of the claims reviewed would not have complied with either PPS or PDGM requirements.


(Editor's note): The Department of Justice has sued health insurer Cigna for $1.4 Billion of Medicare Advantage fraud, alleging:

  • Cigna falsified the health conditions of its Medicare Advantage plan members to coax CMS into making larger payments to the insurer on behalf of beneficiaries.
  • Cigna used a medical assessment it called "360" to find health conditions that could raise risk scores of plan members, offering incentives to physicians who gave the exam and using third-party contract providers to perform them in plan member homes.
  • CMS overpaid Cigna an estimated $1.4 billion from 2012 to 2017 and DOJ is seeking equal to three times that amount in damages, along with a civil penalty of $11,000 for each violation.

This isn't Cigna's first brush with the DOJ — in 2016 it was temporarily banned from selling its MA plans after CMS found it failed to abide by compliance program requirements.

It is also not the first time an MA organization has been accused of inflating plan member health conditions to boost CMS payments.

Anthem got hit with a DOJ lawsuit in March for nearly the same thing, alleging it received millions in improper payments from CMS for failing to correct inaccurate diagnosis codes.

UnitedHealth in recent years scuffled several times with the Justice Department over MA payments.

For reference, 192M is 1.37% of 1.4B.



Fewer than 20 percent of claims being out of compliance with Medicare requirements does not seem extreme; however, when extrapolated to take into consideration total Medicare claims from 11,000 providers, it could potentially be a significant loss for Medicare, the OIG asserted.

OIG Recommended that CMS:

(1) direct MACs to recover the $41,613 in identified overpayments made to HHAs for the sampled claims;

(2) require the MACs to perform data analysis and risk assessments of claims with visits slightly above the applicable LUPA threshold and target these claims for additional review; and

(3) instruct the MACs to educate HHA providers on properly billing for home health services with visits slightly above the applicable LUPA threshold, which could have saved Medicare as much as $191.8 million during our [2017] audit period.

The report points out that CMS is in agreement with these recommendations and has already put practices in place with the MACs to address visits slightly over the threshold that trigger higher Medicare reimbursements.

Report's importance to HHAs

Within 42CFR § 405.371, is mention of suspected fraud as a reason for suspended payments. It goes on to read that suspected fraud, if all listed parties in the regulation agree, can be determined as a "credible allegation of fraud," and Medicare payments can be suspended in whole or in part. The definition of a "credible allegation of fraud," found here 42 CFR § 405.370, lists claims data mining, the methodology the OIG used, as one of three acceptable ways to determine fraud. This means CMS can suspend payments if an HHA is under suspicion until it is proven otherwise, and CMS considers historical "patterns" identified by data mining to be one of several reliable sources to do so.

What should HHAs do?

It is essential to monitor every patient's length of stay and look for trends across your patient population. If previously, for example, your agency discharged 45 percent of patients in the first 30 days of care, and now, under PDGM, that LOS is trending toward 20 percent, it may well be a be a red flag caught by auditors' software. If there is a viable explanation for this decreasing trend, it is vital to be aware of the change and ensure your clinical documentation supports the longer length of stays in compliance with Medicare requirements of payment.

Even if you are not intentionally keeping patients longer than you did last year, it is your responsibility to understand the definition of "skilled service requirements." 42 CFR § 409.44 discusses that skilled services must be reasonable and necessary in order for you to treat a patient's illness or injury:

  1. To be considered reasonable and necessary, the services must be consistent with the nature and severity of the beneficiary's illness or injury, his or her particular medical needs, and accepted standards of medical and nursing practice.
  2. The skilled nursing care provided to the beneficiary must be reasonable within the context of the beneficiary's condition.
  3. The determination of whether skilled nursing care is reasonable and necessary must be based solely upon the beneficiary's unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to last a long time.

There are also various scenarios listed within 42 CF4 § 409.44 that outline what is not considered reasonable and necessary. People in your organization should also be intimately familiar with these scenarios.

The only source of information MACs have with which to base their decisions is your clinicians' documentation. Accurate recording of every patient's needs and medical justification for every service you provide is your only tool to mitigate allegations of suspected fraud. It is also important to know that examination of the clinical documentation is the last portion of the auditing process.

42 CFR § 409.44 states that "reasonable and necessary" determinations are based on information provided on submitted forms and in the medical record concerning the unique medical condition of each patient. Internal audits and quality reviews of all patient medical records are an excellent practice to have in place, along with regular education for staff on the regulations regarding homebound status, length of stay, and what "reasonable and necessary services" means when they are planning patient care.

It should not be necessary to repeat to professionals with nursing degrees that "no job is finished until the paperwork is detail."


Darcey Trescone

Darcey Trescone is a Healthcare IS and Business Development Consultant in the Post-Acute Healthcare Market with a strong background working with both providers and vendors specific to Home Care and Hospice. She has worked as a home health nurse and held senior operational, product management and business development positions with various post-acute software firms, where her responsibilities included new and existing market penetration, customer retention and oversight of teams across the U.S., Canada and Australia. She can be reached at


©2020 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Home Care Technology: The Rowan Report. One copy may be printed for personal use; further reproduction by permission only.