Upcoding — overstating the severity of a beneficiary's condition — along with kickbacks, billing for services not rendered and other fraud and abuse contributed to a 44 percent increase in Medicare spending on home health care services from 2002-2006, according to a Government Accountability Office report. For example, the report said, a CMS contractor found that only 9 percent of claims were properly coded for 670 Houston beneficiaries who had the most severe clinical rating and who were served by potentially fraudulent HHAs.
Released Friday, the report found Medicare spending on home health totaled $12.9 billion in 2006, up 44 percent from 2002, despite an increase of less than 17 percent in the number of beneficiaries using the home health benefit during the five-year period. The report also found the number of home health agencies increased from 6,553 in 2002 to 8,463 in 2006, with more than half of the increase in only two states — Florida and Texas. To strengthen the controls on improper payments, the GAO recommended that CMS consider verifying the criminal history of all key officials named on an HHA enrollment application and developing new rules to make removing problem providers easier. Read the report in its entirety on GAO's Web site.