Common Characteristics of Home Health Fraud Cases

OIG Reports

Home health has long been recognized as a program area vulnerable to fraud, waste, and abuse. This Medicare benefit covers skilled nursing care, home-based assistance, and therapeutic services for qualifying homebound individuals. Last year, Medicare reimbursed more than 11,000 home health agencies (HHAs) for almost 7 million episodes of home health care, totaling approximately $18.4 billion. CMS has estimated that Medicare made more than $10 billion in improper payments to HHAs during the same period. OIG investigations of home health fraud resulted in more than 350 criminal and civil actions and over $975 million in receivables for fiscal years 2011-2015. Previous reports from the OIG and GAO continue to raise concerns about questionable billing patterns, compliance problems, and improper payments in home health. The problem has become so large that since July 2013, CMS has imposed moratoria on new HHA enrollments in selected geographic areas to prevent fraud, waste, and abuse.

The OIG analyzed Medicare claims data to assess the national prevalence and distribution of selected characteristics commonly found in OIG-investigated home health fraud cases. It identified HHAs and supervising physicians that were statistical outliers with regard to those characteristics in comparison to their peers nationally. The OIG also identified geographic “hotspots” that were either statistical outliers compared to other areas nationally or contained significant numbers of HHA or physician outliers. The OIG reported finding over 500 HHAs and over 4,500 physicians that were outliers in comparison to their peers nationally, with respect to multiple characteristics commonly found in OIG-investigated cases of home health fraud. It further identified 27 geographic “hotspots” in 12 states where fraud cases are prevalent. The OIG also found the following five distinct characteristics of HHAs:

1. High percentage of episodes for which the beneficiary had no recent visits with the supervising physician;
2. High percentage of episodes that were not preceded by a hospital or nursing home stay;
3. High percentage of episodes with a primary diagnosis of diabetes or hypertension;
4. High percentage of beneficiaries with claims from multiple HHAs; and
5. High percentage of beneficiaries with multiple home health readmissions in a short period of time.

The OIG noted that its combined efforts with CMS at cracking down on fraud in this area have resulted in reducing Medicare home health annual spending by more than $1 billion since CY 2010. However, the OIG concluded the results of its analysis demonstrate that home health fraud in Medicare warrants continued attention, along with increased oversight from CMS.