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Home Health Fraud Alert

“In fiscal year 2015 Medicare reimbursed more than 11,000 home health agencies for almost 7 million episodes of home health care, totaling approximately $18.4 billion.”[1] As a result, HHS directed the OIG to perform a nationwide analysis of common characteristics of home health fraud cases.  Previous OIG investigation identified three (3) primary areas of fraud: questionable billing patterns, compliance problems, and improper payments to home health providers. According to the OIG, the vast majority of payments are for services that HHS deems not medically necessary. Armed with this basic information, the OIG dispatched its investigators and auditors to review 2014-2015 Medicare payment data.

Why should this process concern the average home health provider? Because, the recent Supreme Court decision in Universal Health Services, Inc. v. United States Wet AL. Ex Rel Escobar[2] held that the doctrine of implied false certification was alive and well. The court further held that a health care provider could be held criminally responsible for a false claim,[3] if the provider billed a government health care program for services that they knew were not compliant with the material terms (HCPCS and CPT) of the agreement between the provider and the government. What are the material terms you ask? A material term is any term that had the government known you did not comply with the term, they would not honor the request for payment. A violation of the False Claims Act (FCA) may be criminal or civil. A criminal violation carries a penalty of up to five (5) years for each violation, plus fines ranging from $250,000 to $500,000. A civil violation of the False Claims Act carries a penalty of $5,500 to $10,000 per claim, plus three (3) times the value of the improper payment.

The OIG 2014-2015 claims analysis revealed five (5) statistical target areas the OIG will be closely monitoring. The five (5) areas of concern that each home health agency operator should be concerned about are:

  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.
  5. High percentage of beneficiaries with multiple home health readmissions in a short period of time.

The report went on to state that the two highest areas of concentrated home health fraud were Miami, Florida and Detroit, Michigan. If you are a home health provider, please review the five (5) areas of likely fraud and make sure that your organization does not make the same mistakes. Further under the new Escobar holding understand that the material terms of the HHS regulations and HCPCS codes must be complied with or you will more likely than not face criminal penalties.

Chapman Law Group is dedicated to assisting home health providers in all aspects of health care. We have the resources and expertise to defend you against audits and criminal investigations, as well as to assist in preparing compliance programs that work. If you have questions or concerns regarding any aspect of home health care billing or compliance (Stark, Anti-Kickback, False Claims Act, compliance, or the “one purpose test”), please call Ronald W. Chapman at Chapman Law Group.

Chapman Law Group (“CLG”) is a professional health care law litigation firm, with offices in Michigan and Florida (Miami and Sarasota). For over 25 years CLG has defended the rights of health care professionals, providers, and corporations involved in the delivery of health care at all levels. We believe the dedicated men and women, who provide health care deserve an exceptional defense when their integrity and actions are called into question. Look us up on the web www.chapmanlawgroup.com or call us at (248) 644-6326 or (941) 893-3449.

Ronald W. Chapman is the founder and shareholder of CLG. For over 30 years Ronald has focused his practice in the defense of health care providers of all levels, including correctional law, civil rights law, medical malpractice defense, and health care administrative law at the state and federal level in Michigan and Florida. Ronald will receive his LL.M. in health care law from Loyola University Chicago School of Law in August of 2016.


[1] HHS OIG. Data Brief. June 2016.OEI-05-16-00031
[2] Universal Health Servs. v. United States, 2016 U.S. LEXIS 2002, 136 S. Ct. 1484, 194 L. Ed. 2d 547, 84 U.S.L.W. 3523 (U.S. 2016)
[3] False Claims Act criminal 18 U.S.C. 287; civil 31 U.S.C. 3729-33