WASHINGTON, D.C. (September 13, 2019)—The Health and Human Services (HHS) Office of the Inspector General (OIG) recently released a report pertaining to home health agencies (HHA), “The Centers for Medicare & Medicaid Services Could Use Comprehensive Error Rate Testing Data To Identify High-Risk Home Health Agencies.”

The OIG conducted a study of Comprehensive Error Rate Testing (CERT) data for fiscal years (FYs) 2014 through 2017 to identify high-risk HHAs—those with potentially high rates of improper payments in CERT—as well as the common types of errors that caused improperly paid claims. The OIG provided the Centers for Medicare & Medicaid Services (CMS) with information from the study it could replicate to identify high-risk HHAs. However, CMS did not agree with the OIG recommendation. The OIG found that the majority of HHA errors were related to improper documentation or lack of proper documentation.

In addition to this report focusing specifically on HHAs, the OIG indicated it will release another report related to CMS’s overall efforts to use CERT data to identify high-risk providers of all types in the Medicare program. That report will contain appropriate recommendations for action to further reduce overall CERT improper payments and CERT error rates.

Below are some details of this HHA-specific study and summarized findings.

The OIG did not actually review medical records or documentation. Instead, it compiled CERT data from fiscal years 2014–2017 and defined at risk home health agencies as those with three or more paid claims that the CERT contractor determined were improperly paid and whose error rate was greater than the average national HHA CERT error rate from FYs 2014 through 2017.

The OIG determined that Medicare paid more than $4 billion to 87 high-risk HHAs. Of the $4 billion total paid to these agencies the OIG estimated the CERT sample for these agencies was approximately $1 million in improper payments. The majority of the errors were related to the requirements that focus on the physician’s role in determining the need for HHA services. Of the errors, 49% were associated with the face-to-face (FTF) evaluation requirement and 16% with physician certification or recertification of patients’ eligibility for services. The National Association for Home Care & Hospice (NAHC) notes that these types of errors are consistent with results of audit activity through the Targeted Probe & Educate (TPE) and Review Choice Demonstration (RCD) initiatives. They are also consistent with the top denial reasons of medical review audits performed by Medicare Administrative Contractors (MACs) over the past several years. The national HHA error rate during the years for the study peaked at 59% in FY2015 and dropped to 32.3% by FY2017. The 87 home health agencies the OIG identified as high risk had error rates well above this—ranging from 81.2% in FY2014 to 72% in FY2017.

The OIG concluded CMS could use the CERT data to identify high-risk HHAs as a part of a multifaceted approach that includes targeted probe and educate reviews as well as aspects of its fraud prevention system to further reduce improper payments and the error rate for claims paid to HHAs.

CMS commented on this OIG data brief and indicated that while it recognizes that HHA claims are a major source of improper payments, CMS’s efforts such as TPE and RCD have decreased the home health improper payment rate from 59% in FY 2015 to 17.6% in FY 2018 and are reliable and effective. CMS stated that it does not believe the methodology the OIG used for identifying high-risk HHAs is valid, as the CERT data are not designed to be precise at the provider level. CMS indicated that providers with a higher number of claims billed are much more likely to be selected by the CERT review.

Additionally, CMS stated that in the past it has attempted to use CERT data to identify high-risk providers but has found these data to be misleading and ineffective. Therefore, CMS discontinued the practice of using CERT data to identify high-risk providers. CMS also stated that its payment contractors have more accurate data at the provider level. CMS’s comments are included in their entirety in Appendix D of the report. The OIG responded that the HHA improper payment rate remains higher than the national error rate of 8.1% in 2018 for all provider types. Moreover, none of CMS’s current work precludes the use of CERT data to improve oversight effort.

The OIG did not provide a timeframe for when its report related to CMS’s overall efforts to use CERT data to identify high-risk providers of all types in the Medicare program is expected to be released.