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Fraud in the Home Health Care System

Chris Murray
Posted on: August 16, 2019 by Chris Murray

In the United States, the home health care industry is valued in excess of $90 billion. This sector of the health care industry is growing at exponential rates; approximately 12 million patients rely on the services of home health care providers, and there are nearly 500 million patient visits each year in the U.S. alone. With this tremendous growth and value exists the potential for fraud, and in fact, several industry watchdogs have reported on an increase in fraudulent claims. Insurance for home health care providers is designed to provide certain financial coverages against numerous claims. To better protect themselves and the patients who rely on them, home health care service providers must be aware of potential signs of fraud. 

Rising Fraud Levels: An Overview

In 2016, the U.S. Department of Health and Human Services (HHS) Office of Inspector General released a scathing report on the growing problem of fraud in the home health care sector. More than 500 agencies, or about 5% of all agencies existing at the time, showed characteristics that warned of fraudulent activity. Five primary fraudulent characteristics were discussed in the federal government’s report, including:

  • Beneficiaries with multiple claims from multiple home health care agencies.
  • Episodes of care with diagnoses of certain medical conditions, particularly high blood pressure and diabetes. 
  • Beneficiaries with multiple hospital readmissions within unusually short periods of time.
  • Episodes of care that were not preceded by stays in hospital or nursing home facilities.
  • Episodes of care where beneficiaries had few or no visits from their supervising medical providers. 

There may be legitimate explanations for some of these warning signs, but in law enforcement proceedings against agency violators, one or more of these characteristics was prevalent, and in some cases, fraudulent agencies exhibited most or all of these characteristics at once. Fraud in the home health care industry has resulted in hundreds of millions of dollars in illegitimate fees, such as billing for unnecessary services or paying for patient referrals, which is illegal under current regulations. These fraudulent expenses have driven up healthcare costs, including premiums related to insurance for home health care providers.

Fighting Against Fraud

To combat fraud in the home health care sector, several government agencies have stepped up oversight as well as criminal prosecution of offenders. The Centers for Medicare & Medicaid Services (CMS) have extended a new rule that forbids enrollment in Medicare for new healthcare agencies in several states, including Florida, Michigan, Illinois, and Texas. These states were singled out due to their high prevalence of fraud indicators. 

In early 2019, the U.S. Department of Justice (DOJ) announced several high-profile criminal cases the Department was successful in prosecuting. The cases had resulted in over $21 million in home health care fraud, including kickback schemes that netted illegal payments for several violators. 

Additional regulatory oversight is needed, and the U.S. government is stepping up its efforts. Home health care agencies are also taking the steps needed to reduce fraud. Some of the tactics that can be beneficial in reducing fraud include:

  • Requiring more stringent background checks on caregivers, particularly those with previous criminal activity in their histories.
  • Implementing zero-tolerance policies for theft, fraud, and similar criminal behaviors.
  • Improving in-agency recordkeeping and oversight, including auditing claims and enrollment records on a regular basis. 

Protecting patients and their caregivers is the primary role of insurance for home health care providers. By reducing fraud, agencies and their staff can continue to provide care for the millions of patient who rely on their services and may do so without crippling expenses and the potential for hefty fines.

About Caitlin Morgan

Caitlin Morgan specializes in insuring assisted living facilities and nursing homes and can assist you in providing insurance and risk management services for this niche market. Give us a call to learn more about our programs at 877.226.1027.

Posted in: blog Home Health Care