[Federal Register Volume 63, Number 152 (Friday, August 7, 1998)]
[Notices]
[Pages 42410-42426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20966]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of the OIG Compliance Program Guidance for Home
Health Agencies
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: This Federal Register notice sets forth the recently issued
Compliance Program Guidance for Home Health Agencies developed by the
Office of Inspector General (OIG) in cooperation with, and with input
from, several provider groups and industry representatives. Many home
health care providers have expressed interest in better protecting
their operations from fraud and abuse through the adoption of a
voluntary compliance program. The OIG has previously developed and
published compliance program guidances focused on the clinical
laboratory and hospital industries (62 FR 9435, March 3, 1997 and 63 FR
8987, February 23, 1998, respectively). We believe that the development
of this compliance program guidance for the home health industry will
continue as a positive step towards promoting a higher level of ethical
and lawful conduct throughout the entire health care community.
FOR FURTHER INFORMATION CONTACT: Michael Shaw, Office of Counsel to the
Inspector General, (202) 619-2078.
SUPPLEMENTARY INFORMATION: The creation of compliance program guidances
has become a major initiative of the OIG in its efforts to engage the
health care community in combating fraud and abuse. In formulating
compliance guidances, the OIG has worked closely with the Health Care
Financing Administration, the Department of Justice and various sectors
of the health care industry to provide clear guidance to those segments
of the industry that are interested in reducing fraud and abuse within
their organizations. The first of these compliance program guidances
focused on clinical laboratories and was published in the Federal
Register on March 3, 1997 (62 FR 9435). Building on basic elements of
the first issuance, the second compliance program guidance developed by
the OIG focused on the hospital industry and was published in the
Federal Register on February 23, 1998 (63 FR 8987). The development of
these types of compliance program guidance is based on our belief that
a health care provider can use internal controls to more efficiently
monitor adherence to applicable statutes, regulations and program
requirements.
The OIG has identified seven fundamental elements to an effective
compliance program. They are:
Implementing written policies, procedures and standards of
conduct;
Designating a compliance officer and compliance committee;
Conducting effective training and education;
Developing effective lines of communication;
Enforcing standards through well-publicized disciplinary
guidelines;
Conducting internal monitoring and auditing; and
Responding promptly to detected offenses and developing
corrective action.
Using these seven basic elements, the OIG has identified specific
areas of home health operations that, based on prior Government
enforcement efforts, have proven to be vulnerable to fraud and abuse.
The development of this Compliance Program Guidance for Home Health
Agencies has been further enhanced by input from various home health
trade associations and others with expertise in the home health
industry. Regardless of a home health agency's size and structure--
whether large or small, urban or rural, for-profit or non-profit--the
OIG believes that every home health agency can and should strive to
accomplish the objectives and principles underlying all of the
compliance policies and procedures set forth in this accompanying
guidance. Like the previously-issued compliance guidances for hospitals
and clinical laboratories, adoption of the Compliance Program Guidance
for Home Health Agencies set forth below will be voluntary.
A reprint of the OIG's Compliance Program Guidance for Home Health
Agencies follows.
Office of Inspector General's Compliance Program Guidance for Home
Health Agencies
I. Introduction
The Office of Inspector General (OIG) of the Department of Health
and Human Services (HHS) continues in its efforts to promote
voluntarily developed and implemented compliance programs for the
health care industry. The following compliance program guidance is
intended to assist home health agencies \1\ and their agents and
subproviders (referred to collectively in this document as ``home
health agencies'') develop effective internal controls that promote
adherence to applicable Federal and State law, and the program
requirements of Federal, State, and private health plans.\2\ The
adoption and implementation of voluntary compliance programs
significantly advance the prevention of fraud, abuse, and waste in
these health care plans while at the same time further the fundamental
mission of all
[[Page 42411]]
home health agencies, which is to provide quality care to patients.
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\1\ The term ``home health agency'' is applied in this document
as defined in section 1861(o) of the Social Security Act, 42 U.S.C.
1395x(o).
\2\ This Compliance Program Guidance for Home Health Agencies is
not intended to address issues specific to suppliers of durable
medical equipment, infusion therapy, and other services typically
provided in the home setting.
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Within this document, the OIG first provides its general views on
the value and fundamental principles of home health agency compliance
programs, and then provides the specific elements that each home health
agency should consider when developing and implementing an effective
compliance program. While this document presents basic procedural and
structural guidance for designing a compliance program, it is not in
itself a compliance program. Rather, it is a set of guidelines to be
considered by a home health agency interested in implementing a
compliance program.
The OIG recognizes the size-differential that exists between
operations of the different home health agencies and organizations that
compose the home health industry. Appropriately, this guidance is
pertinent for all home health agencies, whether for-profit or non-
profit, large or small, urban or rural. The applicability of the
recommendations and guidelines provided in this document depends on the
circumstances of each particular home health agency. However,
regardless of a home health agency's size and structure, the OIG
believes that every home health agency can and should strive to
accomplish the objectives and principles underlying all of the
compliance policies and procedures recommended within this guidance.
Fundamentally, compliance efforts are designed to establish a
culture within a home health agency that promotes prevention,
detection, and resolution of instances of conduct that do not conform
to Federal and State law, and Federal, State, and private payor health
care program requirements, as well as the home health agency's business
policies. In practice, the compliance program should effectively
articulate and demonstrate the organization's commitment to ethical
conduct. The existence of benchmarks that demonstrate implementation
and achievements are essential to any effective compliance program.
Eventually, a compliance program should become part of the fabric of
routine home health agency operations.
Specifically, compliance programs guide a home health agency's
governing body (e.g., Board of Directors or Trustees), Chief Executive
Officer (CEO), managers, clinicians, billing personnel, and other
employees in the efficient management and operation of a home health
agency. They are especially critical as an internal control in the
reimbursement and payment areas, where claims and billing operations
are often the source of fraud and abuse, and therefore, historically
have been the focus of Government regulation, scrutiny, and sanctions.
It is incumbent upon a home health agency's corporate officers and
managers to provide ethical leadership to the organization and to
assure that adequate systems are in place to facilitate ethical and
legal conduct. Employees, managers, and the Government will focus on
the words and actions of a home health agency's leadership as a measure
of the organization's commitment to compliance. Indeed, many home
health agencies have adopted mission statements articulating their
commitment to high ethical standards. A formal compliance program, as
an additional element in this process, offers a home health agency a
further concrete method that may improve quality of care and reduce
waste. Compliance programs also provide a central coordinating
mechanism for furnishing and disseminating information and guidance on
applicable Federal and State statutes, regulations, and other
requirements.
Implementing an effective compliance program requires a substantial
commitment of time, energy, and resources by senior management and the
home health agency's governing body.\3\ Superficial programs that
simply purport to comply with the elements discussed and described in
this guidance or programs that are hastily constructed and implemented
without appropriate ongoing monitoring will likely be ineffective and
could expose the home health agency to greater liability than no
program at all. While it may require significant additional resources
or reallocation of existing resources to implement an effective
compliance program, the OIG believes that the long term benefits of
implementing the program outweigh the costs.\4\
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\3\ Recent case law suggests that the failure of a corporate
Director to attempt in good faith to institute a compliance program
in certain situations may be a breach of a Director's fiduciary
obligation. See, e.g., In re Caremark International Inc. Derivative
Litigation, 698 A.2d 959 (Ct. Chanc. Del. 1996).
\4\ Current Health Care Financing Administration (HCFA)
reimbursement principles provide that certain of the costs
associated with the creation of a voluntarily established compliance
program may be allowable costs on certain types of home health
agencies' cost reports. These allowable costs, of course, must at a
minimum be reasonable and related to patient care. See generally 42
U.S.C. 1395x(v)(1)(A) (definition of reasonable cost); 42 CFR
413.9(a), (b)(2) (costs related to patent care). In contract, cost
specifically associated with the implementation of a corporate
integrity agreement in response to a Government investigation
resulting in a civil or criminal judgment or settlement are
unallowable, and are also made specifically and expressly
unallowable in corporate integrity agreements and civil fraud
settlements.
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A. Benefits of a Compliance Program
In addition to fulfilling its legal duty to ensure that it is not
submitting false or inaccurate claims to Government and private payors,
a home health agency may gain numerous additional benefits by
voluntarily implementing an effective compliance program. Such programs
make good business sense because they help a home health agency fulfill
its fundamental care-giving mission to patients and the community, and
assist home health agencies in identifying weaknesses in internal
systems and management. Other important potential benefits include the
ability to:
Concretely demonstrate to employees and the community at
large the home health agency's strong commitment to honest and
responsible provider and corporate conduct;
Provide a more accurate view of employee and contractor
behavior relating to fraud and abuse;
Identify and prevent illegal and unethical conduct;
Tailor a compliance program to a home health agency's
specific needs;
Improve the quality, efficiency, and consistency of
patient care;
Create a centralized source for distributing information
on health care statutes, regulations, and other program directives
related to fraud and abuse and related issues;
Formulate a methodology that encourages employees to
report potential problems;
Develop procedures that allow the prompt, thorough
investigation of alleged misconduct by corporate officers, managers,
employees, independent contractors, consultants, nurses, and other
health care professionals;
Initiate immediate, appropriate, and decisive corrective
action;
Minimize, through early detection and reporting, the loss
to the Government from false claims, and thereby reduce the home health
agency's exposure to civil damages and penalties, criminal sanctions,
and administrative remedies, such as program exclusion; \5\ and
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\5\ The OIG, for example, will consider the existence of an
effective compliance program that pre-dated any governmental
investigation when addressing the appropriateness of administrative
sanctions. The burden is on the provider to demonstrate the
operational effectiveness of a compliance program. Further, the
False Claims Act, 31 U.S.C. 3729-3733, provides that a person who
has violated the Act, but who voluntarily discloses the violation to
the Government, in certain circumstances will be subject to not less
than double, as opposed to treble, damages. See 31 U.S.C. 3729(a).
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[[Page 42412]]
Enhance the structure of home health agency operations and
gain consistency between separate business units.
Overall, the OIG believes that an effective compliance program is a
sound investment on the part of a home health agency.
The OIG recognizes that the implementation of a compliance program
may not entirely eliminate fraud, abuse, and waste from the home health
agency system. However, a sincere effort by home health agencies to
comply with applicable Federal and State standards, as well as the
requirements of private health care programs, through the establishment
of an effective compliance program, significantly reduces the risk of
unlawful or improper conduct.
B. Application of Compliance Program Guidance
Given the diversity within the industry, there is no single
``best'' home health agency compliance program. The OIG understands the
variances and complexities within the home health industry and is
sensitive to the differences among large national and regional multi-
home health agency organizations, specialty home health agencies, small
independent home health agencies, and other types of home health agency
organizations and systems. However, elements of this guidance can be
used by all home health agencies, regardless of size, location, or
corporate structure, to establish an effective compliance program.
Similarly, a hospital or corporation that owns a home health agency or
provides home health services may incorporate these elements into its
system-wide compliance or managerial structure. We recognize that some
home health agencies may not be able to adopt certain elements to the
same comprehensive degree that others with more extensive resources may
achieve. This guidance represents the OIG's suggestions on how a home
health agency can best establish internal controls and monitoring to
correct and prevent fraudulent activities. By no means should the
contents of this guidance be viewed as an exclusive discussion of the
advisable elements of a compliance program.
The OIG believes that input and support by representatives of the
major home health trade associations is critical to the development and
success of this compliance program guidance. Therefore, in drafting
this guidance, the OIG received and considered input from various home
health and medical associations, as well as professional practice
organizations. Further, we took into consideration previous OIG
publications, such as Special Fraud Alerts, the recent findings and
recommendations in reports issued by OIG's Office of Audit Services and
Office of Evaluation and Inspections, as well as the experience of past
and recent fraud investigations related to home health agencies
conducted by OIG's Office of Investigations and the Department of
Justice. As appropriate, this guidance may be modified and expanded as
more information and knowledge is obtained by the OIG, and as changes
in the law, rules, policies, and procedures of the Federal, State, and
private health plans occur. New compliance practices may eventually be
incorporated into this guidance if the OIG discovers significant
enhancements to better ensure an effective compliance program.
The OIG recognizes that the development and implementation of
compliance programs in home health agencies often raise sensitive and
complex legal and managerial issues.\6\ However, the OIG wishes to
offer what it believes is critical guidance for providers who are
sincerely attempting to comply with the relevant health care statutes
and regulations.
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\6\ Nothing stated within this document should be substituted
for, or used in lieu of, competent legal advice from counsel.
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II. Compliance Program Elements
The elements proposed by these guidelines are similar to those of
the Compliance Program Guidance for Hospitals that was published by the
OIG in February 1998, the clinical laboratory compliance program
guidance published by the OIG in February 1997,\7\ and our corporate
integrity agreements.\8\ The elements represent a guide that can be
tailored to fit the needs and financial realities of a particular home
health agency.\9\ The OIG is cognizant that, with regard to compliance
programs, one model is not suitable to every home health agency.
Nonetheless, the OIG believes that every home health agency, regardless
of size or structure, can benefit from the principles espoused in this
guidance.
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\7\ See 63 FR. 8987 (1998) for the Compliance Program Guidance
for Hospitals. See 62 FR 9435 (1997) for the clinical laboratory
compliance program guidance. These documents are also located on the
Internet at http://www.dhhs.gov/progorg/oig.
\8\ Corporate integrity agreements are executed as part of a
civil settlement between the health care provider and the Government
to resolve a case based on allegations of health care fraud or
abuse. These OIG-imposed programs are in effect for a period of 3 to
5 years and require many of the elements included in this compliance
program guidance.
\9\ This is particularly true in the context of the home health
industry, which includes many small independent home health agencies
with limited financial resources and staff, as well as the larger
multi-home health agency organizations and networks with extensive
financial resources and staff.
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The OIG believes that every effective compliance program must begin
with a formal commitment by the home health agency's governing body to
include all of the applicable elements listed below. These elements are
based on the seven steps of the Federal Sentencing Guidelines.\10\
Further, we believe that every home health agency can implement most of
our recommended elements that expand upon the seven steps of the
Federal Sentencing Guidelines. We recognize that full implementation of
all elements may not be immediately feasible for all home health
agencies. However, as a first step, a good faith and meaningful
commitment on the part of the home health agency administration,
especially the governing body and the CEO, will substantially
contribute to a program's successful implementation. As the compliance
program is implemented, that commitment should cascade down through the
management of the home health agency to every employee at all levels in
the organization.
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\10\ See United States Sentencing Commission Guidelines,
Guidelines Manual, 8A1.2, Application Note 3(k). The Federal
Sentencing Guidelines are detailed policies and practices for the
Federal criminal justice system that prescribe the appropriate
sanctions for offenders convicted of Federal crimes.
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At a minimum, comprehensive compliance programs should include the
following seven elements:
(1) The development and distribution of written standards of
conduct, as well as written policies and procedures that promote the
home health agency's commitment to compliance (e.g., by including
adherence to the compliance program as an element in evaluating
managers and employees) and address specific areas of potential fraud,
such as claims development and submission processes, cost reporting,
and financial relationships with physicians and other health care
professionals and entities;
(2) The designation of a compliance officer and other appropriate
bodies, e.g., a corporate compliance committee, charged with the
responsibility for operating and monitoring the compliance program, and
who reports
[[Page 42413]]
directly to the CEO and the governing body; \11\
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\11\ The integral functions of a compliance officer and a
corporate compliance committee in implementing an effective
compliance program are discussed throughout this compliance program
guidance. However, the OIG recognizes that a home health agency may
tailor the structure of those positions in consideration of the size
and design of the home health agency, while endeavoring to address
and accomplish all of the underlying objectives of a compliance
officer and a corporate compliance committee.
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(3) The development and implementation of regular, effective
education and training programs for all affected employees;
(4) The creation and maintenance of a process, such as a hotline or
other reporting system, to receive complaints, and the adoption of
procedures to protect the anonymity of complainants and to protect
whistleblowers from retaliation;
(5) The development of a system to respond to allegations of
improper/illegal activities and the enforcement of appropriate
disciplinary action against employees who have violated internal
compliance policies, applicable statutes, regulations, or Federal
health care program requirements; \12\
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\12\ The term ``Federal health care programs'' is applied in
this document as defined in 42 U.S.C. 1320a-7b(f), which includes
any plan or program that provides health benefits, whether directly,
through insurance, or otherwise, which is funded directly, in whole
or in part, by the United States Government (i.e., via programs such
as Medicare, Federal Employees' Compensation Act, Black Lund, or the
Longshore and Harbor Worker's Compensation Act) or any State health
plan (e.g., Medicaid, or a program receiving funds from block grants
for social services or child health services). Also, for the
purposes of this document, the term ``Federal health care program
requirements'' refers to the statutes, regulations, rules,
requirements, directive, and instructions governing Medicare,
Medicaid, and all other Federal health care programs.
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(6) The use of audits and/or other evaluation techniques to monitor
compliance and assist in the reduction of identified problem areas;
(7) The investigation and remediation of identified systemic
problems and the development of policies addressing the non-employment
or retention of sanctioned individuals.
A. Written Policies and Procedures
Every compliance program should require the development and
distribution of written compliance policies, standards, and practices
that identify specific areas of risk and vulnerability to the home
health agency. These policies, standards, and practices should be
developed under the direction and supervision of, or subject to review
by, the compliance officer and compliance committee and, at a minimum,
should be provided to all individuals who are affected by the
particular policy at issue, including the home health agency's agents
and independent contractors.\13\ In addition to these general corporate
policies, it may be necessary to implement individual policies for
independent components of the home health agency.
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\13\ According to the Federal Sentencing Guidelines, an
organization must have established compliance standards and
procedures to be followed by its employees and other agents in order
to receive sentencing credit for an ``effective'' compliance
program. The Federal Sentencing Guidelines define ``agent'' as ``any
individual, including a director, an officer, an employee, or an
independent contractor, authorized to act on behalf of the
organization.'' See United States Sentencing Commission Guidelines,
Guidelines Manual, 8A1.2, Application Note 3.
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1. Standards of Conduct
Home health agencies should develop standards of conduct for all
affected employees that include a clearly delineated commitment to
compliance by the home health agency's senior management \14\ and its
divisions, including affiliated providers operating under the home
health agency's \15\ control and other health care professionals (e.g.,
physical therapists, occupational therapists, speech therapists, and
medical social workers). Standards should articulate the home health
agency's commitment to comply with all Federal and State standards,
with an emphasis on preventing fraud and abuse. They should explicitly
state the organization's mission, goals, and ethical requirements of
compliance and reflect a carefully crafted, clear expression of
expectations for all home health agency governing body members,
officers, managers, employees, clinicians, and, where appropriate,
contractors and other agents. Standards should be distributed to, and
comprehensible by, all affected employees (e.g., translated into other
languages when necessary and written at appropriate reading levels).
Standards should not only address compliance with statutes and
regulations, but should also set forth broad principles that guide
employees in conducting business professionally and properly. Further,
to assist in ensuring that employees continuously meet the expected
high standards set forth in the code of conduct, any employee handbook
delineating or expanding upon these standards of conduct should be
regularly updated as applicable statutes, regulations, and Federal
health care program requirements are modified and/or clarified.\16\
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\14\ The OIG strongly encourages high-level involvement by the
home health agency's governing body, chief executive officer, chief
operating officer, general counsel, and chief financial officer, as
well as other medical or clinical personnel, as appropriate, in the
development of standards of conduct. Such involvement should help
communicate a strong and explicit statement of compliance goals and
standards.
\15\ E.g., pharmacies, other home health agencies, and
supplemental staffing entities.
\16\ The OIG recognizes that not all standards, policies, and
procedures need to be communicated to all employees. However, the
OIG believes that the bulk of the standards that relate to complying
with fraud and abuse laws and other ethical areas should be
addressed and made part of all affected employees' training. The
home health agency must decide which additional educational programs
should be limited to the different levels of employees, based on job
functions and areas of responsibility.
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When they first begin working for the home health agency, and each
time new standards of conduct are issued, employees should be asked to
sign a statement certifying that they have received, read, and
understood the standards of conduct. An employee's certification should
be retained by the home health agency in the employee's personnel file,
and available for review by the compliance officer.
2. Risk Areas
The OIG believes that a home health agency's written policies and
procedures should take into consideration the particular statutes,
rules, and program instructions that apply to each function or
department of the home health agency.\17\ Consequently, we recommend
that the individual policies and procedures be coordinated with the
appropriate training and educational programs with an emphasis on areas
of special concern that have been identified by the OIG through its
investigative and audit functions.\18\ Some of the special areas of OIG
concern include: \19\
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\17\ A home health agency can conduct focus groups composed of
managers from various departments to solicit their concerns and
ideas about compliance risks that may be incorporated into the home
health agency's policies and procedures. Such employee participation
in the development of the home health agency's compliance program
can enhance its credibility and foster employee acceptance of the
program.
\18\ The OIG periodically issues Special Fraud Alerts setting
forth activities believed to raise legal and enforcement issues.
Home health agency compliance programs should require that the legal
staff, compliance officer, or other appropriate personnel carefully
consider any and all Special Fraud Alerts issued by the OIG that
relate to home health agencies. Moreover, the compliance programs
should address the ramifications of failing to cease and correct any
conduct criticized in such a special Fraud Alert, if applicable to
home health agencies, or to take reasonable action to prevent such
conduct from reoccurring in the future. If appropriate, a home
health agency should take the steps described in section G.2.
regarding investigations, reporting, and correction of identified
problems.
\19\ The OIG's work plan is currently available on the Internet
at http://www.dhhs.gov/progorg/oig. The OIG Work Plan details the
various projects of the Office of Audit Services, Office of
Evaluation and Inspections, Office of Investigations, and Office of
Counsel to the Inspector General that are planned to be addressed
during each Fiscal Year.
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[[Page 42414]]
Billing for items or services not actually rendered; \20\
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\20\ Billing for services not actually rendered involves
submitting a claim that represents the provider performed a service
all or part of which was simply not performed. This form of billing
fraud occurs in many health care entities, including home health
agencies, hospitals, laboratories, and nursing homes, and represents
a significant part of the OIG's investigative caseload.
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Billing for medically unnecessary services; \21\
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\21\ Billing for medically unnecessary services involves
knowingly seeking reimbursement for a service that is not warranted
by the patient's current and documented medical condition. See 42
U.S.C. Sec. 1395y(a)(1)(A) (``no payment may be made under part A or
part B [of Medicare] for any expenses incurred for items or services
which * * * are not reasonable and necessary for the diagnosis or
treatment of illness or injury or to improve the functioning of the
malformed body member''). Upon submission of an HCFA claim form
(whether paper or electronic), a home health agency certifies that
the services provided and billed were medically necessary for the
health of the beneficiary, and were rendered in accordance with
orders prescribed by the beneficiary's physician. See also
discussion in section II.A.3.a and accompanying notes.
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Duplicate billing; \22\
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\22\ Duplicate billing occurs when the home health agency
submits more than one claim for the same service or the bill is
submitted to more than one primary payor at the same time. Although
duplicate billing can occur due to simple error, knowing, duplicate
billing--which is sometimes evidenced by systematic or repeated
double billing--can create liability under criminal, civil, or
administrative law, particularly if any overpayment is not promptly
refunded.
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False cost reports; \23\
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\23\ The submission of false cost reports is usually limited to
certain Medicare Part A providers, such as home health agencies,
hospitals, and skilled nursing facilities, which are reimbursed in
part on the basis of their self-reported operating costs. The OIG is
aware of practices in which home health agencies maintain records
that indicate salaries are paid to employees that do not exist, lump
nonpatient-related expenses with patient-related ones in an attempt
to bury the non-reimbursable costs, bill Medicare for patient visits
with no records to substantiate that the services were performed,
inappropriately shift certain costs to cost centers that are below
their reimbursement cap, shift non-Medicare related costs to
Medicare cost centers, and fail to properly disclose related
organizations (see 42 CFR 413.17(b)), e.g., entities that provide
leased space or equipment, financial management consulting, and
direct patient services and supplies.
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Credit balances--failure to refund; \24\
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\24\ A credit balance is an improper or excess payment made to a
health care provider as a result of patient billing or claims
processing errors. Examples of Medicare credit balances include
instances where a provider is: (1) Paid twice for the same service
either by Medicare or by Medicare and another insurer; or (2) paid
for services planned but not performed or for non-covered services.
See Home Health Agency Manual Sec. 489. Home health agencies should
institute procedures to provide for the timely and accurate
reporting of Medicare and other Federal health care program credit
balances.
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Home health agency incentives to actual or potential
referral sources (e.g., physicians, hospitals, patients, etc.) that may
violate the anti-kickback statute or other similar Federal or State
statute or regulation; \25\
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\25\ Examples of arrangements that may run afoul of the anti-
kickback statute include practices in which a home health agency
pays a fee to a physician for each plan of care certified, provides
items or services for free or below fair market value to
beneficiaries of Federal health care programs, provides nursing or
administrative services for free or below fair market value to
physicians, hospitals and other potential referral sources, and
provides salaries to a referring physician for services either not
rendered or in excess of fair market value for services rendered.
See 42 U.S.C. 1320a-7b; 60 FR 40, 847 (1995). See also discussion in
section II.A.4. and accompanying notes.
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Joint ventures between parties, one of whom can refer
Medicare or Medicaid business to the other; \26\
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\26\ Equally troubling to the OIG is the proliferation of
business arrangements that may violate the anti-kickback statute.
Such arrangements are generally established between those in a
position to refer business, such as physicians, and those providing
items or services for which a Federal health care program pays.
Sometimes established as ``joint ventures,'' these arrangements may
take a variety of forms. The OIG currently has a number of
investigations and audits underway that focus on such areas of
concern.
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Stark physician self-referral law; \27\
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\27\ Under the Stark physician self-referral law, if a physician
(or an immediate family member of such physician) has a financial
relationship with a home health agency, the physician may not make a
referral to the home health agency for the furnishing of home health
services for which payment may be made under the Federal health care
programs. See 42 U.S.C. 1395nn.
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Billing for services provided to patients who are not
confined to their residence (or ``homebound''); \28\
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\28\ See discussion in section II.A.3.b. and accompanying notes.
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Billing for visits to patients who do not require a
qualifying service; \29\
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\29\ See discussion in section II.A.3.d. and accompanying notes.
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Over-utilization \30\ and under-utilization; \31\
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\30\ Physicians often rely on home health agencies to determine
the need, type, and frequency of home health services provided to a
beneficiary. Since Medicare does not limit the number of visits or
the length of home health coverage for an individual beneficiary,
home health agencies have incentives to furnish as many visits as
possible, which can lead to over-utilization. Although it is a
physician that determines medical necessity, a home health agency
has an obligation to ensure that services it provides are medically
necessary, and should consult with physicians as appropriate for the
requisite assurances.
\31\ In other words, knowing denial of needed care in order to
keep costs low.
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Knowing billing for inadequate or substandard care;
Insufficient documentation to evidence that services were
performed and to support reimbursement;
Billing for unallowable costs of home health coordination;
\32\
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\32\ Home health coordination is intended to manage and
facilitate the transfer of patients from a hospital or skilled
nursing facility to the care of a home health agency. Although some
costs of performing this service may be allowable under Medicare,
the costs of services performed by home health agency personnel that
constitute patient solicitation or activities duplicative of an
institution's discharge planning responsibilities are not allowable.
These non-reimbursable activities, as well as the allowable costs of
performing home health coordination, are more specifically described
in the Provider Reimbursement Manual, Part I, Sec. 2113. Further,
the OIG's Home Health Fraud Alert of June 1995 specifically warned
home health agencies that providing hospitals with discharge
planners, home health coordinators, or home care liaisons in order
to induce referrals can constitute a kickback.
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Billing for services provided by unqualified or unlicensed
clinical personnel;
False dating of amendments to nursing notes;
Falsified plans of care; \33\
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\33\ See discussion in section II.A.3.c. and accompanying notes.
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Untimely and/or forged physician certifications on plans
of care;
Forged beneficiary signatures on visit slips/logs that
verify services were performed;
Improper patient solicitation activities and high-pressure
marketing of uncovered or unnecessary services; \34\
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\34\ Home health agencies should not utilize prohibited or
inappropriate conduct (e.g., offer free gifts or services to
patients) to carry out their initiatives and activities designed to
maximize business growth and patient retention. Also, any marketing
information offered by home health agencies should be clear,
correct, non-deceptive, and fully informative.
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Inadequate management and oversight of subcontracted
services, which results in improper billing;
Discriminatory admission and discharge of patients;
Billing for unallowable costs associated with the
acquisition and sale of home health agencies;
Compensation programs that offer incentives for number of
visits performed and revenue generated; \35\
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\35\ The current nature of the home health benefit (i.e., no
limits on reimbursable home health visits in a cost-reimbursed
system) and customary business pressures create risks associated
with incentives (e.g., payments benefits, etc.) for productivity and
volume of services. Such risks include over-utilization and billing
for services not provided in order to meet internal goals and budget
benchmarks imposed by home health agency management.
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Improper influence over referrals by hospitals that own
home health agencies;
Patient abandonment in violation of applicable statutes,
regulations, and Federal health care program requirements; \36\
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\36\ Under the Medicare conditions of participation, a home
health agency has the duty to fully inform a beneficiary in advance
of termination of services when further care or treatment is
necessary. See generally 42 U.S.C. 395bbb. Moreover, State licensure
statutes and regulations may stipulate additional requirements
(e.g., the minimum time period of advance notice allowed) that home
health agencies must follow when terminating the services provided
to a patient. The risk of abandonment may arise when a home health
agency attempts to keep costs of providing services low.
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[[Page 42415]]
Knowing misuse of provider certification numbers, which
results in improper billing;
Duplication of services provided by assisted living
facilities, hospitals, clinics, physicians, and other home health
agencies;
Knowing or reckless disregard of willing and able
caregivers when providing home health services; \37\
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\37\ According to Medicare reimbursement principles, where a
family member or other person is or will be providing services that
adequately meet a patient's needs, it is not reasonable and
necessary for a home health agency to furnish such services.
Therefore, if a home health agency has first hand knowledge of an
able and willing person to provide the services being rendered by
the home health agency, or a patient (or patient's family) objects
to a home health agency providing such services, the home health
agency should neither provide nor bill for such services. See Home
Health Agency Manual Sec. 203.2.
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Failure to adhere to home health agency licensing
requirements and Medicare conditions of participation; \38\ and
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\38\ See 42 U.S.C. 1395bbb for the Medicare conditions of
participation that apply to home health agencies.
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Knowing failure to return overpayments made by Federal
health care programs. A home health agency's prior history of
noncompliance with applicable statutes, regulations, and Federal health
care program requirements may indicate additional types of risk areas
where the home health agency may be vulnerable and that may require
necessary policy measures to be taken to prevent avoidable
recurrence.\39\ Additional risk areas should be assessed by home health
agencies as well and incorporated into the written policies and
procedures and training elements developed as part of their compliance
programs.
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\39\ ``Recurrence of misconduct similar to that which an
organization has previously committed casts doubt on whether it took
all reasonable steps to prevent such misconduct'' and is a
significant factor in the assessment of whether a compliance program
is effective. See United States Sentencing Commission Guidelines,
Guidelines Manual. 8A1.2, Application Note 3(k)(iii).
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3. Claim Development and Submission Process
Of the risk areas identified above, those pertaining to the claim
development and submission process have been the frequent subject of
administrative recoveries, as well as investigations and prosecutions
under the civil False Claims Act and criminal statutes. Settlement of
these cases often has required the defendants to execute corporate
integrity agreements, in addition to paying significant civil damages
and/or criminal fines and penalties. These corporate integrity
agreements have provided the OIG with a mechanism to specify practices
that help ensure compliance with applicable Federal and State statutes,
and Federal health care program requirements. The following
recommendations include a number of provisions from various corporate
integrity agreements. As previously discussed, each home health agency
should develop its own specific policies tailored to fit its individual
needs.
With respect to the reimbursement process, a home health agency's
written policies and procedures should reflect and reinforce current
Federal health care requirements regarding the submission of claims and
Medicare cost reports. The policies must create a mechanism for the
billing or reimbursement staff to communicate effectively and
accurately with the clinical staff. Policies and procedures should:
Provide for sufficient and timely documentation of all
nursing and other home health services, including subcontracted
services, prior to billing to ensure that only accurate and properly
documented services are billed;
Emphasize that a claim should be submitted only when
appropriate documentation supports the claim and only when such
documentation is maintained, appropriately organized in a legible form,
and available for audit and review. The documentation should record the
activity leading to the record entry, the identity of the individual
providing the service, and any information needed to support medical
necessity and other applicable reimbursement coverage criteria. The
home health agency should consult with its medical director(s),
clinical staff, and/or governing body to establish other appropriate
documentation guidelines;
Indicate that the diagnosis and procedure codes for home
health services reported on the reimbursement claim should be based on
the patient's medical record and other documentation, as well as comply
with all applicable official coding rules and guidelines. Any Health
Care Financing Administration Common Procedure Coding System (HCPCS),
International Classification of Disease (ICD), Home Health Agency's
Current Procedural Terminology (CPT), or revenue code (or successor
codes) used by the billing staff should accurately describe the service
that was ordered by the physician and performed by the home health
agency. The documentation necessary for accurate billing should be
available to billing staff;
Provide that the compensation for billing department
personnel and billing consultants should not offer any financial
incentive to submit claims regardless of whether they meet applicable
coverage criteria for reimbursement or accurately represent the
services rendered; and
Establish and maintain a process for pre-and post-
submission review of claims \40\ to ensure that claims submitted for
reimbursement accurately represent medically necessary services
actually provided, supported by sufficient documentation, and in
conformity with any applicable coverage criteria for reimbursement.\41\
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\40\ The OIG recommends that, at a minimum, a valid statistical
sample of claims should be reviewed before and after billing is
submitted.
\41\ E.g., plan of care is dated and signed by a physician,
beneficiary is homebound, skilled service is required, finite and
predictable endpoint exists and is documented for skilled nursing
services is excess of 35 hours of per week, etc. 42 U.S.C. 1395m(x);
42 CFR 424.22; Home Health Agency Manual Sec. 204.
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The written policies and procedures concerning proper billing
should reflect the current reimbursement principles set forth in
applicable regulations \42\ and should be developed in tandem with
private payor and organizational standards. Particular attention should
be paid to issues associated with medical necessity, homebound status
of beneficiary, physician certification of plan of care, and qualifying
services to establish coverage eligibility.\43\
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\42\ The official reimbursement coverage guidelines for
participating providers in the Medicare program are promulgated by
HCFA in the Provider Reimbursement Manual and the Home Health Agency
Manual. Generally, to qualify for the home health benefit covered by
Medicare, individuals must be confined to their residences (be
``homebound''), be under a physician's care, and need part-time or
intermittent skilled nursing care and/or physical or speech therapy.
See Home Health Agency Manual Sec. 204 entitled ``Conditions the
Patient Must Need to Qualify for Coverage of Home Health Services.''
\43\ The OIG undertaken numerous audits, investigations,
inspections, and national enforcement initiatives aimed at reducing
potential and actual fraud, abuse, and waste. For example, OIG audit
reports, which have focused on issues such as home health agency
billing for services not authorized by a physician, not medically
necessary, not eligible for reimbursement, not rendered, and for
unallowable general and administrative costs, continue to reveal
abusive, wasteful or fraudulent behavior by some home health
agencies. Our report on the practices of problem providers, our
Operation Restore Trust Audit Report of July 1997, and our special
fraud alert on home health fraud, illustrate how certain home health
agency billing and business practices may result in fraudulent and
abusive behavior.
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a. Medical necessity--Reasonable and necessary services. A home
health agency's compliance program should provide that claims should
only be
[[Page 42416]]
submitted for services that the home health agency has reason to
believe are medically necessary and were ordered by a physician \44\ or
other appropriately licensed individual.
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\44\ For Medicare reimbursement purposes, a plan for furnishing
home health services must be certified by a physician who is a
doctor of medicine, osteopathy, or podiatric medicine, and who does
not have a significant ownership interest in, or a significant
financial or contractual relationship with, the home health agency.
See 42 CFR 424.22.
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As a preliminary matter, the OIG recognizes that licensed health
care professionals must be able to order any services that are
appropriate for the treatment of their patients. However, Medicare and
other Government and private health care plans will only pay for those
services otherwise covered that meet appropriate medical necessity
standards (i.e., in the case of Medicare, ``reasonable and necessary''
services). Providers may not bill for services that do not meet the
applicable standards.\45\ The home health agency is in a unique
position to deliver this information to the health care professionals
on its staff and to the physicians who refer patients. Upon request, a
home health agency must be able to provide documentation, such as
physician orders and other patient medical records, to support the
medical necessity of a service that the home health agency has
provided.\46\ The compliance officer should ensure that a clear,
comprehensive summary of the ``medical necessity'' definitions and
applicable rules of the various Government and private plans is
prepared, disseminated, and explained to appropriate home health agency
personnel.\47\
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\45\ Civil monetary penalties and administrative sanctions, as
well as remedies available under criminal and civil law, including
the civil False Claims Act, may be imposed against any person who
submits a claim for services ``that [the] person knows or should
know are not medically necessary.'' See 42 U.S.C. 1320a-7a(a).
\46\ Medicare fiscal intermediaries and carriers have the
authority to require home health agencies, which furnish items or
services under the program, to submit documentation that
substantiates services are actually provided and medically
necessary. See Medicare Intermediary Manual Sec. 3116.1.B.
\47\ As it applies to private plan requirements, this compliance
function may be delegated to supervisory personnel with suitable
oversight by the compliance officer.
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We recommend that home health agencies formulate policies and
procedures that include periodic clinical reviews, both prior and
subsequent to billing for services, as a means of verifying that
patients are receiving only medically necessary services. As part of
such reviews, home health agencies should examine the frequency and
duration of the services they perform to determine, in consultation
with a physician, whether patients' medical conditions justify the
number of visits provided and billed. Home health agencies may choose
to incorporate this clinical review function into pre-existing quality
assurance mechanisms or any other quality assurance processes that may
become part of the conditions of participation for home health
agencies.
Additionally, home health agencies should implement policies and
procedures to verify that beneficiaries have actually received the
appropriate level and number of services billed. The OIG believes that
a home health agency has a duty to sufficiently monitor services its
employees provide to patients for confirmation that all services were
provided as claimed.\48\ To satisfy such an objective, home health
agencies may choose to periodically contact (i.e., via mail, telephone,
or in person) a random sample of patients and interview the clinical
staff involved.
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\48\ A home health agency may consider including attestations on
nursing note forms to be signed by caregivers for the purpose of
reinforcing the importance of accurate documentation of services
performed and billed.
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b. Homebound beneficiaries. For a home health agency to receive
reimbursement for home health services under either Medicare Part A or
Part B, the beneficiary must be ``confined to the home.'' \49\ Home
health agencies should create oversight mechanisms to ensure that the
homebound status of a Medicare beneficiary is verified and the specific
factors qualifying the patient as homebound are properly
documented.\50\ Any determinative assessment of the homebound status of
a Medicare beneficiary should be completed prior to billing Medicare
for home health services provided to the beneficiary.\51\ As with other
conditions for Medicare coverage, a physician must certify that the
beneficiary was confined to the home at the time when services were
provided.\52\
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\49\ Title XVIII of the Social Security Act, Sec. 1861(m), 42
U.S.C. 1395 x (m), authorizes the provision of home health services
to patients who are confined to their home (or homebound). In
general, a patient will be considered to be homebound if the patient
has a condition due to an illness or injury that restricts the
patient's ability to leave his or her place of residence except with
the aid of supportive devices such as crutches, canes, wheelchairs,
and walkers, or the assistance of another person or if leaving home
is medically contraindicated. The condition of these patients should
be such that there exists a normal inability to leave the home and,
consequently, leaving home would require a considerable and taxing
effort. See Home Health Agency Manual Sec. 204.1. HHS plans to
submit a report to Congress by October 1, 1998, recommending
criteria that should be applied, and the method of applying such
criteria, in the determination of whether an individual is homebound
for Medicare reimbursement purposes. See Balanced Budget Act of
1997, Pub. L. 105-33, Sec. 4614. Any new criteria developed by HHS
should be incorporated into the public applicable policies and
procedures of a home health agency.
\50\ Recent audits, investigations, and studies of home health
agencies have concluded that many home health agencies have billed
Medicare for services provided to beneficiaries who are not
homebound. See note 43.
\51\ If a question is raised as to whether a patient is confined
to the home, the home health agency will be requested to furnish its
Medicare fiscal intermediary with the information necessary to
establish that the patient is homebound. Home Health Agency Manual
Sec. 204.1.
\52\ 42 CFR 424.22(a)(1)(ii).
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One means by which home health agencies may verify the homebound
status of a Medicare beneficiary is the inclusion of written prompts on
nursing note forms. These prompts can direct the home health agency's
clinicians (e.g., registered nurse or licensed practical nurse) to
adequately assess and document the homebound status of a Medicare
beneficiary based upon clinical expertise, consultation with the
beneficiary, and orders of the attending physician.\53\ Carefully
designed prompts on nursing note forms may help ensure the complete and
appropriate documentation necessary to substantiate the homebound
status of a Medicare beneficiary for reimbursement purposes.
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\53\ These prompts can be in the form of directions (e.g.,
``Consult with the patient and physician as to the patient's ability
to leave the home.'') or questions (e.g., ``Does the patient ever
leave the home, and if so, where does the patient go and how often?
Does the patient require supportive devices to leave the home?'').
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Home health agencies can further ensure compliance with the
homebound requirement by distributing written notices to Medicare
beneficiaries, reminding them that they must satisfy the regulatory
requirements for homebound status to be eligible for Medicare coverage.
Since the Medicare conditions of participation require home health
agencies to give all beneficiaries a written notice of their legal
rights before furnishing them with home health services, providers can
include reminders of homebound requirements in these notices.\54\
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\54\ See 42 CFR 484.10(a)(1).
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c. Physician certification of the plan of care. A home health
agency should take all reasonable steps to ensure that claims for home
health services are ordered and authorized by a physician.\55\ The home
health agency's
[[Page 42417]]
written policies and procedures should require, at a minimum, that:
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\55\ As a condition for payment of home health services by
Medicare, a physician must certify that a plan for furnishing the
services has been established and is periodically reviewed by a
physician. 42 CFR 424.22(a) and (b); Home Health Agency Manual
Sec. 204.2 If employees of a home health agency believe that
services ordered by a physician are excessive or otherwise
inappropriate, the home health agency cannot avoid liability for
filing improper claims simply because a physician has ordered the
services. Medicare, through certifications that are incorporated
into the claim forms (paper or electronic) and ratified by home
health agencies upon submission, imposes a duty to investigate the
truth, accuracy, and completeness of claims before they are
submitted. To illustrate, the HCFA-1500 claim form states that the
person submitting the form certifies ``the services shown on the[e]
form were medically necessary for the health of the patient.''
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Before the home health agency bills for services provided
to a beneficiary, the plan of care \56\ must be established, dated, and
signed by a qualified physician; \57\
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\56\ The Home Health Agency Manual uses the term ``plan of
care'' to refer to the medical treatment plan established by the
treating physician with the assistance of the home health care
nurse. Among other things, the plan of care must contain all
pertinent diagnoses, including the patient's mental status, the
types of services, supplies, and equipment required, the frequency
of visits to be made, prognosis, rehabilitation potential,
functional limitations, activities permitted, nutritional
requirements, and all medications and treatments. See Home Health
Agency Manual Sec. 204.2. The plan of care is presented in writing
on the HCFA-485 form entitled ``Home Health Certification and Plan
of Treatment.''
\57\ The home health agency should employ reasonable measures to
verify that the physician is appropriately licensed and no adverse
actions, such as criminal conviction, debarment, or an exclusion,
have been taken against the physician.
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The plan of care must be periodically reviewed by a
physician in order for the beneficiary to continue to qualify for
Medicare coverage of home health benefits; \58\
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\58\ The plan of care must be reviewed and signed by the
physician who established the plan of care, in consultation with the
home health agency professional personnel, at least every 62 days.
Each review of a patient's plan of care must contain the signature
of the physician and the date of review. 42 C.F.R.
Sec. Sec. 424.22(a), (b); Home Health Agency Manual Sec. 204.2.F.
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Home health services are only billed if the home health
agency is acting upon a physician's certification attesting that the
services provided to a patient are medically necessary and meet the
requirements for home health services to be covered by Medicare; \59\
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\59\ The physician must certify that: (1) The patient is
confined to the home; (2) the patient is in need of intermittent
skilled nursing care, physical therapy and/or speech therapy or
continues to need occupational therapy; (3) the patient is under the
care of the physician while the services are or were furnished; and
(4) a plan of care has been established and is periodically reviewed
by the physician. See Home Health Agency Manual Sec. 204.5 and the
HCFA-485 form.
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When consulted, the home health agency assists the
physician in determining the medical necessity of home health services
and formulating an appropriate and certified plan of care; \60\
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\60\ In practice, home health agencies often accept the
responsibility of assessing a beneficiary's status and completing
the HCFA-485 plan of care form for approval by a physician. In the
July 1997 OIG Audit Report (A-04-96-02121) entitled, ``Results of
the Operation Restore Trust Audit of Medicare Home Health Services
in California, Illinois, New York, and Texas'' (hereinafter ``OIG
ORT Report''), the OIG concluded that physicians did not always
review or actively participate in developing the plans of care they
signed, especially for less complex cases. The report found that
physicians relied heavily on home health agencies to make
determinations as to homebound status, as well as the need, type,
and frequency of home health services without physician
participation. Since such lack of physician involvement may likely
result in non-covered services, it is advisable that home health
agencies undertake all reasonable efforts to procure sufficient
physician consultation to ensure that an appropriate plan of care is
established for medically necessary services.
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The home health agency properly documents any assessment
it has made of a beneficiary's home health needs, which may be used by
a physician in developing and authorizing a plan of care; and
The home health agency reminds or educates physicians, as
appropriate, about the scope of their duty to certify patients for home
health services to be reimbursed by Medicare.\61\
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\61\ This can be accomplished through provider education and
liaison activities with physicians and physician support personnel.
See Provider Reimbursement Manual Sec. 2113.4
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d. Lack of qualifying service. In addition to addressing the issues
associated with other reimbursement coverage criteria, a home health
agency's policies and procedures should ensure that all claims satisfy
the requisite need of a qualifying service.\62\ Since reimbursement
coverage of services by other disciplines may depend on the need and
the provision of the qualifying service, \63\ it is critical for a home
health agency to enlist measures to prevent billing for dependent
services after any qualifying service has ceased.\64\ Any procedures or
practices that a home health agency may implement in response to this
identified risk will most likely correspond with other policy measures
taken by the home health agency to ensure medical necessity.
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\62\ Among other criteria, to receive Medicare reimbursement for
home health services, a beneficiary must have a need for skilled
nursing care on an intermittent basis, physical therapy, speech-
language pathology services, or a continuing need for occupational
therapy. See Home Health Agency Manual Sec. 205. To qualify as
skilled nursing services, the services must require the skills of a
registered nurse or a licensed practical (vocational) nurse under
the supervision of a registered nurse, must be reasonable and
necessary to the treatment of the patient's illness or injury, and
must be intermittent (as discussed in Home Health Agency Manual,
Sec. 206.7). Where a service can be safely and effectively performed
(or self-administered) by the average nonmedical person without the
direct supervision of a licensed nurse, the service cannot be
regarded as a skilled service even if a skilled nurse actually
provides the service. Home Health Agency Manual Sec. 205.1 A.2.
\63\ If an eligible beneficiary requires a qualifying service,
Medicare also covers visits by home health aides, medical social
workers, and occupational therapists, as well as medical supplies
needed and used. Hands-on personal care services, such as bathing,
feeding, and assistance with medications, are services customarily
performed by home health aides in conjunction with a qualifying
service. However, a beneficiary who needs only this type of personal
or custodial care does not qualify for the home health benefit.
Consequently, with no allowable skilled services, the home health
aide services are also not medically necessary or reasonable. See
Home Health Agency Manual Sec. 206.2.
\64\ Recent audits conducted by the OIG have revealed several
instances where home health agencies have submitted substantial
numbers of claims for home health aide visits to beneficiaries that
did not require any skilled qualifying service. See OIG ORT Report.
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e. Cost reports. In addition to submitting claims for specific
services, home health agencies submit annual cost reports to Medicare
for reimbursement of administrative, overhead, and other general costs.
With regard to cost report issues, the written policies should include
procedures that seek to ensure full compliance with applicable
statutes, regulations, and Federal health care program requirements.
Among other things, the home health agency's procedures should ensure
that:
Costs are not claimed unless they are reimbursable,
reasonable, and are based on appropriate and accurate documentation;
Allocations of costs to various cost centers are
accurately made and supportable by verifiable and auditable data;
Unallowable costs are not claimed for reimbursement; \65\
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\65\ For administrative, overhead, and other general costs to be
allowable under Medicare, regulations require that they be
reasonable, necessary for the maintenance of the health care entity,
and related to patient care. 42 CFR 413.9; see also Provider
Reimbursement Manual, Chapter 21.
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Accounts containing both allowable and unallowable costs
are analyzed to determine the unallowable amount that should not be
claimed for reimbursement;
Costs are properly classified; \66\
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\66\ E.g., time must be accurately split between reimbursable
home health coordination and non-reimbursable patient solicitation
activities (see note 32), and between visits to Medicare
beneficiaries and visits to non-Medicare beneficiaries.
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Medicare fiscal intermediary prior year audit adjustments
are implemented and are either not claimed for reimbursement or if
claimed for reimbursement, are clearly identified as protested amounts
on the cost report;
All related parties are identified on the cost report and
all related party charges are reduced to the cost to the related party;
Allocations from a home health agency chain's home office
cost statement to individual home health agency cost reports are
accurately made
[[Page 42418]]
and supportable by verifiable and auditable data;
Management fees are reasonable and necessary, and do not
include unallowable costs, such as certain acquisition costs associated
with the purchase of a home health agency (e.g., good will, non-
competes);
Any return of overpayments, including those resulting from
an internal review or audit, are appropriately reflected in cost
reports, i.e., a repayment of an overpayment received in a prior year
may necessitate changes or amendments to the cost report applicable to
the prior year; and
Procedures are in place and documented for notifying
promptly the Medicare fiscal intermediary (or any other applicable
payor, e.g., TRICARE (formerly CHAMPUS) and Medicaid) in writing of
errors discovered after the submission of the home health agency cost
report, and, where applicable, after the submission of a home health
agency chain's home office cost statement.
f. Services provided to patients who reside in assisted living
facilities. Home health agencies should formulate effective policies
and procedures to evaluate home health services provided to individuals
who reside in assisted living facilities (also called residential care
facilities, personal care homes, group homes, etc.) to determine
whether the services are appropriate for reimbursement.\67\ To avoid
the submission of improper claims for services to such individuals, the
adoption of the following measures is advisable upon a request to
provide home health services to a resident of an assisted living
facility:
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\67\ Individuals who reside in assisted living facilities may be
eligible for Medicare coverage of home health services. See Home
Health Agency Manual Sec. 204.1B. However, if it is determined that
the services furnished by the home health agency are duplicative of
services furnished by an assisted living facility, such as when
provision of such care is required of the facility under State
licensure requirements, claims for such services are unallowable
under 42 U.S.C. 1395y(a)(1)(A) and should not be submitted. Services
to people who already have access to appropriate care from a willing
caregiver would not be considered reasonable and necessary to the
treatment of the individual's illness or injury. See Home Health
Agency Manual Sec. 203.2. See also note 37.
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Contact the appropriate State licensing authority to
determine any applicable State licensure and service requirements for
the specific facility involved;
Make reasonable attempts to verify the specific license,
if any, held by the facility, e.g., view the license certificate
hanging on the facility's wall;
Request to view the service agreement between the facility
and the resident during the initial assessment visit to determine the
extent and type of the services that the facility is contractually
obligated to provide to the resident; and
Provide home health services to the resident only to the
extent that they are appropriate and not duplicative of those services
provided or required to be provided by the facility.\68\
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\68\ Audits and investigations by both the OIG and Medicare
fiscal intermediaries have revealed several instances where home
health aids of home health agencies have provided personal care
services, such as meal preparation, room cleaning, and bathing, to
Medicare beneficiaries who reside in assisted living facilities
required by State license to provide such services. In addition to
the customary liability assumed by a home health agency for
submitting claims for such duplicative and unallowable services, a
home health agency may violate the anti-kickback statute for
providing these services at no charge to an assisted living
facility, an entity that is responsible to perform the services and
is a potential source of referrals.
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The OIG strongly recommends that a home health agency contact the
appropriate State licensing authority if there is reason to believe a
State-licensed facility is failing to provide care that is required by
its licensure, regardless of whether claims for services provided to
residents of such facilities would otherwise be reimbursable by
Medicare or another Federal health care program.
g. Prospective payment system. The Balanced Budget Act of 1997
provides for the establishment of a prospective payment system (PPS)
for all costs of home health services. Upon the commencement of such
system, all services covered and paid on a reasonable cost basis under
the Medicare home health benefit, including medical supplies, will be
paid for on the basis of a computed prospective payment amount.\69\
Once HHS institutes the PPS, home health agencies should guard against
new types of fraud, abuse, and waste that might arise in such a
reimbursement system. Potential risks may include failure to report or
mischaracterization of a change in patient conditions used to establish
the PPS charge, denial of medically necessary care resulting in under-
utilization, and duplicate billing of charges subsumed within the PPS
payment. Accordingly, home health agencies should prepare to implement
policies and procedures to properly address any potential risk areas
associated with the PPS.
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\69\ See Balanced Budget Act of 1997, Pub. L. 105-33, Sec. 4603.
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4. Anti-Kickback and Self-Referral Concerns
The home health agency should have policies and procedures in place
with respect to compliance with Federal and State anti-kickback
statutes, as well as the Stark physician self-referral law.\70\ Such
policies should provide that:
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\70\ Towards this end, the home health agency's in-house counsel
or compliance officer should, among other things, obtain copies of
all relevant OIG regulations, special fraud alerts, and advisory
opinions (these documents are located on the Internet at http://
www.dhhs.gov/progorg/oig), and ensure that the home health agency's
policies reflect the guidance provided by the OIG.
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All of the home health agency's contracts and arrangements
with actual or potential referral sources are reviewed by counsel and
comply with all applicable statutes and regulations; \71\
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\71\ In addition to the anti-kickback statutes and the Stark
physician self-referral law provisions, 42 CFR 424.22 expressly
prohibits a home health agency from providing services certified or
recertified by any physician who has a significant ownership
interest in, or a significant financial or contractual relationship
with, that home health agency.
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The home health agency does not submit or cause to be
submitted to the Federal health care programs claims for patients who
were referred to the home health agency pursuant to contracts or
financial arrangements that were designed to induce such referrals in
violation of the anti-kickback statute, Stark physician self-referral
law, or similar Federal or State statute or regulation; and
The home health agency does not offer or provide gifts,
free services, or other incentives to patients, relatives of patients,
physicians, hospitals, contractors, assisted living facilities, or
other potential referral sources for the purpose of inducing referrals
in violation of the anti-kickback statute, Stark physician self-
referral law, or similar Federal or State statute or regulation.\72\
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\72\ See 42 U.S.C. 1320a-7b(b); 60 FR 40847 (1995).
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Further, the policies and procedures should specifically reference
and take into account the OIG's safe harbor regulations, which clarify
those payment practices that would be immune from prosecution under the
anti-kickback statute.\73\
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\73\ See 42 CFR 1001.952.
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5. Retention of Records
Home health agency compliance programs should provide for the
implementation of a records system. This system should establish
policies and procedures regarding the creation, distribution,
retention, storage, retrieval, and destruction of documents.\74\ The
three categories of documents developed under this system should
include: (1) All records and documentation (e.g., clinical and
[[Page 42419]]
medical records, and billing and claims documentation) required either
by Federal or State law for participation in Federal health care
programs \75\ or any other applicable Federal and State laws and
regulations (e.g., document retention requirements to maintain State
licensure); (2) all records, documentation, and verifiable and
auditable data that support the home health agency's Medicare cost
report, and, where applicable, the home health agency chain's home
office cost statement; and (3) all records necessary to protect the
integrity of the home health agency's compliance process and confirm
the effectiveness of the program. The third category includes:
documentation that employees were adequately trained; reports from the
home health agency's hotline, including the nature and results of any
investigation that was conducted; documentation of corrective action,
including disciplinary action taken and policy improvements introduced,
in response to any internal investigation or audit; modifications to
the compliance program; self-disclosures; and the results of the home
health agency's auditing and monitoring efforts.\76\
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\74\ This records system should be tailored to fit the
individual needs and financial resources of the home health agency.
\75\ For example, as a condition of participation, Medicare
requires that home health agencies retain records regarding their
claims to Medicare for a minimum of 5 years after the month the cost
report to which the records apply is filed with the fiscal
intermediary. See 42 CFR 484.48(a).
\76\ The creation and retention of such documents and reports
may raise a variety of legal issues, such as patient privacy and
confidentiality. These issues are best discussed with legal counsel.
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6. Compliance as an Element of a Performance Plan
Compliance programs should require that the promotion of, and
adherence to, the elements of the compliance program be a factor in
evaluating the performance of all employees, who should be periodically
trained in new compliance policies and procedures. In addition, all
managers and supervisors involved in the claims and cost report
development and submission processes should:
Discuss with all supervised employees and relevant
contractors the compliance policies and legal requirements pertinent to
their function;
Inform all supervised personnel that strict compliance
with these policies and requirements is a condition of employment; and
Disclose to all supervised personnel that the home health
agency will take disciplinary action up to and including termination
for violation of these policies or requirements.
In addition to making performance of these duties an element in
evaluations, the compliance officer or home health agency management
should include in the home health agency's compliance program a policy
that managers and supervisors will be sanctioned for failing to
adequately instruct their subordinates or for failing to detect
noncompliance with applicable policies and legal requirements, where
reasonable diligence on the part of the manager or supervisor would
have led to the discovery of any problems or violations and given the
home health agency the opportunity to correct them earlier.
B. Designation of a Compliance Officer and a Compliance Committee
1. Compliance Officer
Every home health agency should designate a compliance officer to
serve as the focal point for compliance activities. This responsibility
may be the individual's sole duty or added to other management
responsibilities, depending upon the size and resources of the home
health agency and the complexity of the task. Designating a compliance
officer with the appropriate authority is critical to the success of
the program, necessitating the appointment of a high-level official in
the home health agency with direct access to the home health agency's
president or CEO, governing body, all other senior management, and
legal counsel.\77\ The officer should have sufficient funding and staff
to perform his or her responsibilities fully. Coordination and
communication are the key functions of the compliance officer with
regard to planning, implementing, and monitoring the compliance
program.
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\77\ The OIG believes that it is not advisable for the
compliance function to be subordinate to the home health agency's
general counsel, or comptroller or similar home health agency
financial officer. Free standing compliance functions help to ensure
independent and objective legal reviews and financial analyses of
the institution's compliance efforts and activities. By separating
the compliance function from the key management positions of general
counsel or chief financial officer (where the size and structure of
the home health agency make this a feasible option), a system of
checks and balances is established to more effectively achieve the
goals of the compliance program.
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The compliance officer's primary responsibilities should include:
Overseeing and monitoring the implementation of the
compliance program; \78\
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\78\ For multi-home health agency organizations or hospital-
owned home health agencies, the OIG encourages coordination with
each home health agency owned by the corporation or hospital through
the use of a headquarter's compliance officer, communicating with
parallel positions in each facility, regional office, or business
line, as appropriate.
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Reporting on a regular basis to the home health agency's
governing body, CEO, and compliance committee (if applicable) on the
progress of implementation, and assisting these components in
establishing methods to improve the home health agency's efficiency and
quality of services, and to reduce the home health agency's
vulnerability to fraud, abuse, and waste;
Periodically revising the program in light of changes in
the organization's needs, and in the law and policies and procedures of
Government and private payor health plans;
Reviewing employees' certifications that they have
received, read, and understood the standards of conduct;
Developing, coordinating, and participating in a
multifaceted educational and training program that focuses on the
elements of the compliance program, and seeks to ensure that all
relevant employees and management are knowledgeable of, and comply
with, pertinent Federal and State standards;
Ensuring that independent contractors and agents who
furnish nursing or other health care services to the clients of the
home health agency, or billing services to the home health agency, are
aware of the requirements of the home health agency's compliance
program with respect to coverage, billing, and marketing, among other
things;
Coordinating personnel issues with the home health
agency's Human Resources/Personnel office (or its equivalent) to ensure
that the National Practitioner Data Bank \79\ and Cumulative Sanction
Report \80\ have been checked with respect to all employees, medical
staff, and independent contractors (as appropriate); \81\
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\79\ The National Practitioner Data Bank is a data base that
contains information about medical malpractice payments, sanctions
by boards of medical examiners or State licensing boards, adverse
clinical privilege actions, and adverse professional society
membership actions. Health care entities can have access to this
data base to seek information about their own medical or clinical
staff, as well as prospective employees.
\80\ The Cumulative Sanction Report is an OIG-produced report
available on the Internet at http://www.dhhs.gov/progorg/oig. It is
updated on a regular basis to reflect the status of health care
providers who have been excluded from participation in the Medicare
and Medicaid programs. In addition, the General Services
Administration maintains a monthly listing of debarred contractors
on the Internet at http://www.arnet.gov/epls.
\81\ The compliance officer may also have to ensure that the
criminal backgrounds of employees have been checked depending upon
State requirements or home health agency policy. See note 105.
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Assisting the home health agency's financial management in
coordinating internal compliance review and
[[Page 42420]]
monitoring activities, including annual or periodic reviews of
departments;
Independently investigating and acting on matters related
to compliance, including the flexibility to design and coordinate
internal investigations (e.g., responding to reports of problems or
suspected violations) and any resulting corrective action (e.g., making
necessary improvements to home health agency policies and practices,
taking appropriate disciplinary action, etc.) with all home health
agency departments, subcontracted providers, and health care
professionals under the home health agency's control, \82\ and any
other agents if appropriate;
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\82\ E.g., physical therapists, occupational therapists, speech
therapists, medical social workers, and supplemental staffing
entities.
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Developing policies and programs that encourage managers
and employees to report suspected fraud and other improprieties without
fear of retaliation; and
Continuing the momentum of the compliance program and the
accomplishment of its objectives long after the initial years of
implementation.\83\
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\83\ Periodic on-site visits of home agency operations,
bulletins with compliance updates and reminders, distribution of
audiotapes or videotapes on different risk areas, lectures at
management and employee meetings, circulation of recent health care
article covering fraud and abuse, and innovative changes to
compliance training are various examples of approaches and
techniques the compliance officer can employ for the purpose of
ensuring continued interest in the compliance program and the home
health agency's commitment to its policies and principles.
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The compliance officer must have the authority to review all
documents and other information that are relevant to compliance
activities, including, but not limited to, patient records, billing
records, and records concerning the marketing efforts of the facility
and the home health agency's arrangements with other parties, including
employees, professionals on staff, relevant independent contractors,
suppliers, agents, supplemental staffing entities, and physicians. This
policy enables the compliance officer to review contracts and
obligations (seeking the advice of legal counsel, where appropriate)
that may contain referral and payment provisions that could violate the
anti-kickback statute, as well as the Stark physician self-referral
prohibition and other legal or regulatory requirements.
2. Compliance Committee
The OIG recommends that a compliance committee be established to
advise the compliance officer and assist in the implementation of the
compliance program.\84\ When developing an appropriate team of people
to serve as the home health agency's compliance committee, including
the compliance officer, a home health agency should consider a variety
of skills and personality traits that are expected from those in such
positions.\85\ Once a home health agency chooses the people that will
accept the responsibilities vested in members of the compliance
committee, the home health agency needs to train these individuals on
the policies and procedures of the compliance program, as well as how
to discharge their duties. The committee's functions should include:
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\84\ The compliance committee benefits from having the
perspectives of individuals with varying responsibilities in the
organization, such as operations, finance, audit, human resources,
and clinical management (e.g., Medical Director), as well as
employees and managers of key operating units. These individuals
should have the requisite seniority and comprehensive experience
within their respective departments to implement any necessary
changes to home health agency policies and procedures as recommended
by the committee. A compliance committee for a home health agency
that is part of a hospital might benefit from the participation of
officials from other departments in the hospital, such as the
accounting and billing departments.
\85\ A health care provider should expect its compliance
committee members and compliance officer to demonstrate high
integrity, good judgment, assertiveness, and an approachable
demeanor, while eliciting the respect and trust of employees of the
home health agency and having significant professional experience
working with billing, clinical records, documentation, and auditing
principles.
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Analyzing the organization,\86\ regulatory environment,
the legal requirements with which it must comply,\87\ and specific risk
areas;
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\86\ E.g., understanding the practical implications of the fraud
and abuse provisions of the Balanced Budget Act of 1997, Pub. L.
105-33, and the Health Insurance Portability and Accountability Act
of 1996, Pub. L. 104-191.
\87\ This includes, but is not limited to, compliance with the
Medicare conditions of participation. See 42 U.S.C. 1395bbb.
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Assessing existing policies and procedures that address
these risk areas for possible incorporation into the compliance
program;
Working with appropriate home health agency departments to
develop standards of conduct and policies and procedures to promote
compliance with legal and ethical requirements;
Recommending and monitoring, in conjunction with the
relevant departments, the development of internal systems and controls
to carry out the organization's standards, policies, and procedures as
part of its daily operations; \88\
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\88\ With respect to multi-home health agency organizations and
hospital-owned home health agencies, this may include fostering
coordination and communication between those employees responsible
for compliance at the corporation or hospital and those responsible
for compliance at the home agencies.
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Determining the appropriate strategy/approach to promote
compliance with the program and detection of any potential violations,
such as through hotlines and other fraud reporting mechanisms;
Developing a system to solicit, evaluate, and respond to
complaints and problems; and
Monitoring internal and external audits and investigations
for the purpose of identifying troublesome issues and deficient areas
experienced by the home health agency, and implementing corrective and
preventive action.
The committee may also address other functions as the compliance
concept becomes part of the overall home health agency operating
structure and daily routine.
C. Conducting Effective Training and Education
The proper education and training of corporate officers, managers,
employees, nurses, and other health care professionals, and the
continual retraining of current personnel at all levels, are
significant elements of an effective compliance program. As part of
their compliance programs, home health agencies should require
personnel to attend specific training on a periodic basis, including
appropriate training in Federal and State statutes, regulations, and
guidelines, and the policies of private payors, and training in
corporate ethics, which emphasizes the organization's commitment to
compliance with these legal requirements and policies.\89\
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\89\ Specific compliance training should complement any ``in-
service'' training sessions that a home health agency may regularly
schedule to reinforce adherence to policies and practices of the
particular home health agency.
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These training programs should include sessions highlighting the
organization's compliance program, summarizing fraud and abuse laws,
Federal health care program requirements, claim development and
submission processes, patient rights, and marketing practices that
reflect current legal and program standards. The organization must take
steps to communicate effectively its standards and procedures to all
affected employees, physicians, independent contractors, and other
significant agents, e.g., by requiring participation in training
programs and disseminating publications that explain specific
[[Page 42421]]
requirements in a practical manner.\90\ Managers of specific
departments or groups can assist in identifying areas that require
training and in carrying out such training.\91\ Training instructors
may come from outside or inside the organization, but must be qualified
to present the subject matter involved and experienced enough in the
issues presented to adequately field questions and coordinate
discussions among those being trained. New employees should be trained
early in their employment.\92\ Training programs and materials should
be designed to take into account the skills, experience, and knowledge
of the individual trainees. The compliance officer should document any
formal training undertaken by the home health agency as part of the
compliance program.
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\90\ Some publications, such as OIG's Special Fraud Alerts,
audit and inspection reports, and advisory opinions, as well as the
annual OIG work plan, are readily available from the OIG and could
be the basis for standards, educational courses, and programs for
appropriate home health agency employees.
\91\ Significant variations in the functions and
responsibilities of different departments or groups may create the
need for training materials that are tailored to compliance concerns
associated with particular operations and duties.
\92\ Certain positions, such as those that involve the billing
of home health services, create a greater organizational legal
exposure, and therefore require specialized training. One
recommendation would be for a home health agency to attempt to fill
such positions with individuals who have the appropriate educational
background and training.
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A variety of teaching methods, such as interactive training, and
training in several different languages, particularly where a home
health agency has a culturally diverse staff, should be implemented so
that all affected employees are knowledgeable of the institution's
standards of conduct and procedures for alerting senior management to
problems and concerns.\93\ Targeted training should be provided to
corporate officers, managers, and other employees whose actions affect
the accuracy of the claims submitted to the Government, such as
employees involved in the billing, cost reporting, and marketing
processes. Given the complexity and interdependent relationships of
many departments, proper coordination and supervision of this process
by the compliance officer is important. In addition to specific
training in the risk areas identified in section II.A.2, above, primary
training for appropriate corporate officers, managers, and other home
health agency staff should include such topics as:
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\93\ Post-training tests can be used to assess the success of
training provided and employee comprehension of the home health
agency's policies and procedures.
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Government and private payor reimbursement principles;
General prohibitions on paying or receiving remuneration
to induce referrals;
Improper alterations to clinical records;
Providing home health services with proper authorization;
Proper documentation of services rendered, including the
correct application of official ICD and CPT coding rules and
guidelines;
Patient rights and patient education;
Compliance with Medicare conditions of participation; and
Duty to report misconduct.
Clarifying and emphasizing these areas of concern through training
and educational programs are particularly relevant to a home health
agency's marketing and financial personnel, in that the pressure to
meet business goals may render these employees vulnerable to engaging
in prohibited practices.
The OIG suggests that all relevant levels of personnel be made part
of various educational and training programs of the home health
agency.\94\ Employees should be required to have a minimum number of
educational hours per year, as appropriate, as part of their employment
responsibilities.\95\ For example, for certain employees involved in
the billing functions, periodic training in applicable reimbursement
coverage and documentation of clinical records should be required.\96\
In home health agencies with high employee turnover, periodic training
updates are critical.
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\94\ In addition, where feasible, the OIG recommends that a home
health agency afford outside contractors the opportunity to
participate in the home health agency's compliance training and
educational programs, or develop their own programs that complement
the home health agency's standards of conduct, compliance
requirements, and other rules and practices.
\95\ Currently, the OIG is monitoring a significant number of
corporate integrity agreements that require many of these training
elements. The OIG usually requires a minimum of 1 to 3 hours
annually for basic training in compliance areas. Additional training
is required for specialty fields such as billing and marketing.
\96\ Appropriate billing depends upon the quality and
completeness of the clinical documentation. Therefore, OIG believes
that active clinical staff participation in educational programs
focusing on billing and documentation should be emphasized by the
home health agency. Clinical staff should be reminded that thorough,
precise, and timely documentation of services provided services the
interests of the patient, as well as the interests of the billing
department.
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The OIG recommends that attendance and participation in training
programs be made a condition of continued employment and that failure
to comply with training requirements should result in disciplinary
action, including possible termination, when such failure is serious.
Adherence to the provisions of the compliance program, such as training
requirements, should be a factor in the annual evaluation of each
employee. The home health agency should retain adequate records of its
training of employees, including attendance logs and material
distributed at training sessions.
Finally, the OIG recommends that home health agency compliance
programs address the need for periodic professional education courses
that may be required by statute and regulation for certain home health
agency employees.
D. Developing Effective Lines of Communication
1. Access to the Compliance Officer
An open line of communication between the compliance officer and
home health agency employees is equally important to the successful
implementation of a compliance program and the reduction of any
potential for fraud, abuse, and waste. Written confidentiality and non-
retaliation policies should be developed and distributed to all
employees to encourage communication and the reporting of incidents of
potential fraud.\97\ The compliance committee should also develop
independent reporting paths for an employee to report fraud, waste, or
abuse so that employees can feel comfortable reporting outside the
normal chain of command and supervisors or other personnel cannot
divert such reports.\98\
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\97\ The OIG believes that whistleblowers should be protected
against retaliation, a concept embodied in the provisions of the
False Claims Act. See 31 U.S.C. 3730(h). In many causes, employees
sue their employers under the False Claims Act's qui tam provisions
out of frustration because of the company's failure to take action
when a questionable, fraudulent, or abusive situation was brought to
the attention of senior corporate officials.
\98\ Home health agencies can also consider rewarding employees
for appropriate use of established systems.
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The OIG encourages the establishment of a procedure so that home
health agency personnel may seek clarification from the compliance
officer or members of the compliance committee in the event of any
confusion or question with regard to a home health agency policy,
practice, or procedure. Questions and responses should be documented
and dated and, if appropriate, shared with other staff so that
standards, policies, practices, and procedures can be updated and
improved to reflect any necessary changes or clarifications. The
[[Page 42422]]
compliance officer may want to solicit employee input in developing
these communication and reporting systems.
2. Hotlines and Other Forms of Communication
The OIG encourages the use of hotlines,\99\ e-mails, written
memoranda, newsletters, suggestion boxes, and other forms of
information exchange to maintain these open lines of
communication.\100\ If the home health agency establishes a hotline,
the telephone number should be made readily available to all employees
and independent contractors, possibly by circulating the number on
wallet cards or conspicuously posting the telephone number in common
work areas.\101\ Employees should be permitted to report matters on an
anonymous basis. Matters reported through the hotline or other
communication sources that suggest substantial violations of compliance
policies, Federal health care program requirements, regulations, or
statutes should be documented and investigated promptly to determine
their veracity. A log should be maintained by the compliance officer
that records such calls, including the nature of any investigation and
its results.\102\ Such information should be included in reports to the
governing body, the CEO, and compliance committee.\103\ Further, while
the home health agency should always strive to maintain the
confidentiality of an employee's identity, it should also explicitly
communicate that there may be a point where the individual's identity
may become known or may have to be revealed in certain instances.
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\99\ The OIG recognizes that it may not be financially feasible
for a smaller home health agency to maintain a telephone hotline
dedicated to receiving calls about compliance issues.
\100\ In addition to methods of communication used by current
employees, an effective employee exit interview program could be
designed to solicit information from departing employees regarding
potential misconduct and suspected violations go home health agency
policy and procedures.
\101\ Home health agencies should also post in a prominent,
available area the HHS-OIG Hotline telephone number, 1-800-447-8477
(1-800-HHS-TIPS), in addition to any company hotline number that may
be posted.
\102\ To efficiently and accurately fulfill such an obligation,
the home health agency should create an intake form for all
compliance issues identified through reporting mechanisms. The form
could include information concerning the date that the potential
problem was reported, the internal investigative methods utilized,
the results of the investigation, the corrective action implemented,
the disciplinary measures imposed, and any identified overpayments
and monies returned.
\103\ Information obtained over the hotline may provide valuable
insight into management practices and operations, whether reported
problems are actual or perceived.
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The OIG recognizes that assertions of fraud and abuse by employees
who may have participated in illegal conduct or committed other
malfeasance raise numerous complex legal and management issues that
should be examined on a case-by-case basis. The compliance officer
should work closely with legal counsel, who can provide guidance
regarding such issues.
E. Enforcing Standards Through Well-Publicized Disciplinary Guidelines
1. Discipline Policy and Actions
An effective compliance program should include guidance regarding
disciplinary action for corporate officers, managers, employees, and
other health care professionals who have failed to comply with the home
health agency's standards of conduct, policies and procedures, Federal
health care program requirements, or Federal and State laws, or those
who have otherwise engaged in wrongdoing, which have the potential to
impair the home health agency's status as a reliable, honest, and
trustworthy health care provider.
The OIG believes that the compliance program should include a
written policy statement setting forth the degrees of disciplinary
actions that may be imposed upon corporate officers, managers,
employees, and other health care professionals for failing to comply
with the home health agency's standards and policies and applicable
statutes and regulations. Intentional or reckless noncompliance should
subject transgressors to significant sanctions. Such sanctions could
range from oral warnings to suspension, termination, or financial
penalties, as appropriate. Each situation must be considered on a case-
by-case basis to determine the appropriate sanction. The written
standards of conduct should elaborate on the procedures for handling
disciplinary problems and those who will be responsible for taking
appropriate action. Some disciplinary actions can be handled by
department or agency managers, while others may have to be resolved by
a senior home health agency administrator. Disciplinary action may be
appropriate where a responsible employee's failure to detect a
violation is attributable to his or her negligence or reckless conduct.
Personnel should be advised by the home health agency that disciplinary
action will be taken on a fair and equitable basis. Managers and
supervisors should be made aware that they have a responsibility to
discipline employees in an appropriate and consistent manner.
It is vital to publish and disseminate the range of disciplinary
standards for improper conduct and to educate officers and other home
health agency employees regarding these standards. The consequences of
noncompliance should be consistently applied and enforced, in order for
the disciplinary policy to have the required deterrent effect. All
levels of employees should be potentially subject to the same types of
disciplinary action for the commission of similar offenses. The
commitment to compliance applies to all personnel levels within a home
health agency. The OIG believes that corporate officers, managers,
supervisors, clinical staff, and other health care professionals should
be held accountable for failing to comply with, or for the foreseeable
failure of their subordinates to adhere to, the applicable standards,
laws, and procedures.
2. New Employee Policy
For all new employees who have discretionary authority to make
decisions that may involve compliance with the law or compliance
oversight, home health agencies should conduct a reasonable and prudent
background investigation, including a reference check,\104\ as part of
every such employment application. The application should specifically
require the applicant to disclose any criminal conviction,\105\ as
defined by 42 U.S.C. 1320a-7(i), or exclusion action. Pursuant to the
compliance program, home health agency policies should prohibit the
employment of individuals who have been recently convicted of a
criminal offense related to health care \106\ or who are listed as
debarred, excluded, or otherwise ineligible for participation in
Federal health care programs.\107\ In addition, pending the
[[Page 42423]]
resolution of any criminal charges or proposed debarment or exclusion,
the OIG recommends that an individual who is the subject of such
actions should be removed from direct responsibility for or involvement
in any Federal health care program.\108\ With regard to current
employees or independent contractors, if resolution of the matter
results in conviction, debarment, or exclusion, the home health agency
should terminate its employment or other contract arrangement with the
individual or contractor.
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\104\ See note 80.
\105\ Slightly over a quarter of the States require, and several
home health agencies voluntarily conduct, criminal background checks
for prospective employees of home health agencies. Identification of
a criminal background of an applicant, who may have been recently
convicted of serious crimes that relate to the proposed employment
duties, could be grounds for denying employment. Further, criminal
background screening may deter those individuals with criminal
intent from entering the field of home health. See United States
General Accounting Office's September 27, 1996, Letter Report
entitled ``Long-Term Care: Some States Apply Criminal Background
Checks to Home Care Workers,'' GAO/PEMD-96-5.
\106\ Since providers of home health services have frequent,
relatively unsupervised access to potentially vulnerable people and
their property, a home health agency should also strictly scrutinize
whether it should employ individuals who have been convicted of
crimes of neglect, violence, or financial misconduct.
\107\ Likewise, home health agency compliance programs should
establish standards prohibiting the execution of contracts with
companies that have been recently convicted of a criminal offense
related to health care or that are listed by a Federal agency as
debarred, excluded, or otherwise ineligible for participation in
Federal health care programs. See note 80.
\108\ Prospective employees who have been officially reinstated
into the Medicare and Medicaid programs by the OIG may be considered
for employment upon proof of such reinstatement.
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F. Auditing and Monitoring
An ongoing evaluation process is critical to a successful
compliance program. The OIG believes that an effective program should
incorporate thorough monitoring of its implementation and regular
reporting to senior home health agency or corporate officers.\109\
Compliance reports created by this ongoing monitoring, including
reports of suspected noncompliance, should be maintained by the
compliance officer and shared with the home health agency's senior
management and the compliance committee. The extent and frequency of
the audit function may vary depending on factors such as the size and
available resources, prior history of noncompliance, and the risk
factors that a particular home health agency confronts.
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\109\ Even when a home health agency or group of home health
agencies is owned by a larger corporate entity, the regular auditing
and monitoring of the compliance activities of an individual home
health agency must be a key feature in any annual review.
Appropriate reports on audit findings should be periodically
provided and explained to a parent organization's senior staff and
officers.
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Although many monitoring techniques are available, one effective
tool to promote and ensure compliance is the performance of regular,
periodic compliance audits by internal or external auditors who have
expertise in Federal and State health care statutes, regulations, and
Federal health care program requirements. The audits should focus on
the home health agency's programs or divisions, including external
relationships with third-party contractors, specifically those with
substantive exposure to Government enforcement actions. At a minimum,
these audits should be designed to address the home health agency's
compliance with laws governing kickback arrangements, the physician
self-referral prohibition, claim development and submission,
reimbursement, cost reporting, and marketing. The audits and reviews
should inquire into the home health agency's compliance with the
Medicare conditions of participation and the specific rules and
policies that have been the focus of particular attention on the part
of the Medicare fiscal intermediaries or carriers, and law enforcement,
as evidenced by educational and other communications from OIG Special
Fraud Alerts, OIG audits and evaluations, and law enforcement's
initiatives.\110\ In addition, the home health agency should focus on
any areas of concern that are specific to the individual home health
agency and have been identified by any entity, whether Federal, State,
or internal.
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\110\ See also section II.A.2.
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Monitoring techniques may include sampling protocols that permit
the compliance officer to identify and review variations from an
established baseline.\111\ Significant variations from the baseline
should trigger a reasonable inquiry to determine the cause of the
deviation. If the inquiry determines that the deviation occurred for
legitimate, explainable reasons, the compliance officer and home health
agency management may want to limit any corrective action or take no
action. If it is determined that the deviation was caused by improper
procedures, misunderstanding of rules, including fraud and systemic
problems, the home health agency should take prompt steps to correct
the problem. Any overpayments discovered as a result of such deviations
should be returned promptly to the affected payor, with appropriate
documentation and a sufficiently detailed explanation of the reason for
the refund.\112\
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\111\ The OIG recommends that when a compliance program is
established in a home health agency, the compliance officer, with
the assistance of department managers, should take a ``snapshot'' of
their operations from a compliance perspective. This assessment can
be undertaken by outside consultants, law or accounting firms, or
internal staff, with authoritative knowledge of health care
compliance requirements. This ``snapshot,'' often used as part of
benchmarking analyses, becomes a baseline for the compliance officer
and other managers to judge the home health agency's progress in
reducing or eliminating potential areas of vulnerability.
\112\ In addition, when appropriate, as referenced in section
G.2, below, reports of fraud or systemic problems should also be
made to the appropriate governmental authority.
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Monitoring techniques may also include a review of any reserves the
home health agency has established for payments that it may owe to
Medicare, Medicaid, or other Federal health care programs. Any reserves
discovered that include funds that should have been paid to such
programs, or funds set aside for potential reimbursement of a known
overpayment to the home health agency, should be paid promptly,
regardless of whether demand has been made for such payment.
An effective compliance program should also incorporate periodic
(at least annual) reviews of whether the program's compliance elements
have been satisfied, e.g., whether there has been appropriate
dissemination of the program's standards, training, ongoing educational
programs, and disciplinary actions, among other elements.\113\ This
process will verify actual conformance by all departments with the
compliance program and may identify the necessity for improvements to
be made to the compliance program, as well as the home health agency's
operations. Such reviews could support a determination that appropriate
records have been created and maintained to document the implementation
of an effective program.\114\ However, when monitoring discloses that
deviations were not detected in a timely manner due to program
deficiencies, proper modifications must be implemented. Such
evaluations, when developed with the support of management, can help
ensure compliance with the home health agency's policies and
procedures.
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\113\ One way to assess the knowledge, awareness, and
perceptions of the home health agency's employees is through the use
of a validated survey instrument (e.g., employee questionnaires,
interviews, or focus groups).
\114\ Such records should include, but not be limited to, logs
of hotline calls, logs of training attendees, training agenda
materials, and summaries of corrective action taken and improvements
made to home health agency policies as a result of compliance
activities.
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As part of the review process, the compliance officer or reviewers
should consider techniques such as:
Visits and interviews of patients at their homes;
Analysis of utilization patterns;
Testing clinical and billing staff on their knowledge of
reimbursement coverage criteria and official coding guidelines (e.g.,
present hypothetical scenarios of situations experienced in daily
practice and assess responses);
Assessment of existing relationships with physicians,
hospitals, and other potential referral sources;
Unannounced mock surveys, audits, and investigations;
Reevaluation of deficiencies cited in past surveys for
Medicare conditions of participation;
[[Page 42424]]
Examination of home health agency complaint logs;
Checking personnel records to determine whether any
individuals who have been reprimanded for compliance issues in the past
are among those currently engaged in improper conduct;
Interviews with personnel involved in management,
operations, claim development and submission, patient care, and other
related activities;
Questionnaires developed to solicit impressions of a broad
cross-section of the home health agency's employees and staff;
Interviews with physicians who order services provided by
the home health agency;
Reviews of clinical documentation (e.g., plan of care,
nursing notes, etc.), financial records, and other source documents
that support claims for reimbursement and Medicare cost reports;
Validation of qualifications of physicians who order
services provided by the home health agency;
Evaluation of written materials and documentation
outlining the home health agency's policies and procedures; and
Trend analyses, or longitudinal studies, that uncover
deviations, positive or negative, in specific areas over a given
period.
The reviewers should:
Have the qualifications and experience necessary to
adequately identify potential issues with the subject matter that is
reviewed;
Be objective and independent of line management to the
extent reasonably possible; \115\
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\115\ The OIG recognizes that home health agencies that are
small in size and have limited resources may not be able to use
internal reviewers who are not part of line management or hire
outsider reviewers.
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Have access to existing audit and health care resources,
relevant personnel, and all relevant areas of operation;
Present written evaluative reports on compliance
activities to the CEO, governing body, and members of the compliance
committee on a regular basis, but no less often than annually; and
Specifically identify areas where corrective actions are
needed.
With these reports, home health agency management can take whatever
steps are necessary to correct past problems and prevent them from
recurring. In certain cases, subsequent reviews or studies would be
advisable to ensure that the recommended corrective actions have been
implemented successfully.
The home health agency should document its efforts to comply with
applicable statutes, regulations, and Federal health care program
requirements. For example, where a home health agency, in its efforts
to comply with a particular statute, regulation or program requirement,
requests advice from a Government agency (including a Medicare fiscal
intermediary or carrier) charged with administering a Federal health
care program, the home health agency should document and retain a
record of the request and any written or oral response. This step is
extremely important if the home health agency intends to rely on that
response to guide it in future decisions, actions, or claim
reimbursement requests or appeals. A log of oral inquiries between the
home health agency and third parties will help the organization
document its attempts at compliance. In addition, the home health
agency should maintain records relevant to the issue of whether its
reliance was ``reasonable'' and whether it exercised due diligence in
developing procedures and practices to implement the advice.
G. Responding to Detected Offenses and Developing Corrective Action
Initiatives
1. Violations and Investigations
Violations of a home health agency's compliance program, failures
to comply with applicable Federal or State law, and other types of
misconduct threaten a home health agency's status as a reliable, honest
and trustworthy provider capable of participating in Federal health
care programs. Detected but uncorrected misconduct can seriously
endanger the mission, reputation, and legal status of the home health
agency. Consequently, upon reports or reasonable indications of
suspected noncompliance, it is important that the compliance officer or
other management officials immediately investigate the conduct in
question to determine whether a material violation of applicable law or
the requirements of the compliance program has occurred, and if so,
take decisive steps to correct the problem.\116\ As appropriate, such
steps may include an immediate referral to criminal and/or civil law
enforcement authorities, a corrective action plan,\117\ a report to the
Government,\118\ and the return of any overpayments, if applicable.
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\116\ Instances of noncompliance must be determined on a case-
by-case basis. The existence, or amount, of a monetary loss to a
health care program is not solely determinative of whether or not
the conduct should be investigated and reported to governmental
authorities. In fact, there may be instances where there is no
readily identifiable monetary loss at all, but corrective action and
reporting are still necessary to protect the integrity of the
applicable program and its beneficiaries, (e.g., where services
required by a plan of care were not provided.
\117\ Advice from the home health agency's in-house counsel or
an outside law firm may be sought to determine the extent of the
home health agency's liability and to plan the appropriate course of
action.
\118\ The OIG currently maintains a voluntary disclosure program
that encourages providers to report suspected fraud. The concept of
voluntary self-disclosure is premised on a recognition that the
Government alone cannot protect the integrity of the Medicare and
other Federal health care programs. Health care providers must be
willing to police themselves, correct underlying problems, and work
with the Government to resolve these matters. The OIG's voluntary
self-disclosure program has four prerequisites: (1) The disclosure
must be on behalf of an entity and not an individual; (2) the
disclosure must be truly voluntary (i.e., no pending proceeding or
investigation); (3) the entity must disclose the nature of the
wrongdoing and the harm to the Federal health care programs; and (4)
the entity must not be the subject of a bankruptcy proceeding before
or after the self-disclosure.
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Where potential fraud or False Claims Act liability is not
involved, the OIG recommends that normal repayment channels should be
used for returning overpayments to the Government as they are
discovered. However, even if the overpayment detection and return
process is working and is being monitored by the home health agency's
audit or billing divisions, the OIG still believes that the compliance
officer needs to be made aware of these overpayments, violations, or
deviations that may reveal trends or patterns indicative of a systemic
problem.
Depending upon the nature of the alleged violations, an internal
investigation will probably include interviews and a review of relevant
documents. Some home health agencies should consider engaging outside
counsel, auditors, or health care experts to assist in an
investigation.
Records of the investigation should contain documentation of the
alleged violation, a description of the investigative process
(including the objectivity of the investigators and methodologies
utilized), copies of interview notes and key documents, a log of the
witnesses interviewed and the documents reviewed, the results of the
investigation, e.g., any disciplinary action taken, and the corrective
action implemented. While any action taken as the result of an
investigation will necessarily vary depending upon the home health
agency and the situation, home health agencies should strive for some
consistency by utilizing sound practices and disciplinary
protocols.\119\
[[Page 42425]]
Further, after a reasonable period, the compliance officer should
review the circumstances that formed the basis for the investigation to
determine whether similar problems have been uncovered or modifications
of the compliance program are necessary to prevent and detect other
inappropriate conduct or violations.
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\119\ The parameters of a claim review subject to an internal
investigation will depend on the circumstances surrounding the
issue(s) identified. By limiting the scope of an internal audit to
current billing, a home health agency may fail to discover major
problems and deficiencies in operations, as well as be subject to
certain liability.
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If an investigation of an alleged violation is undertaken and the
compliance officer believes the integrity of the investigation may be
at stake because of the presence of employees under investigation,
those subjects should be removed from their current work activity until
the investigation is completed (unless an internal or Government-led
undercover operation known to the home health agency is in effect). In
addition, the compliance officer should take appropriate steps to
secure or prevent the destruction of documents or other evidence
relevant to the investigation. If the home health agency determines
that disciplinary action is warranted, it should be prompt and imposed
in accordance with the home health agency's written standards of
disciplinary action.
2. Reporting
If the compliance officer, compliance committee, or management
official discovers credible evidence of misconduct from any source and,
after a reasonable inquiry, has reason to believe that the misconduct
may violate criminal, civil, or administrative law, then the home
health agency should promptly report the existence of misconduct to the
appropriate Federal and State authorities \120\ within a reasonable
period, but not more than sixty (60) days \121\ after determining that
there is credible evidence of a violation.\122\ Prompt reporting will
demonstrate the home health agency's good faith and willingness to work
with governmental authorities to correct and remedy the problem. In
addition, reporting such conduct will be considered a mitigating factor
by the OIG in determining administrative sanctions (e.g., penalties,
assessments, and exclusion), if the reporting provider becomes the
target of an OIG investigation.\123\
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\120\ Appropriate Federal and State authorities include the
Office of Inspector General of the Department of Health and Human
Services, the Criminal and Civil Divisions of the Department of
Justice, the U.S. Attorney in relevant districts, and the other
investigative arms for the agencies administering the affected
Federal or State health care programs, such as the State Medicaid
Fraud Control Unit, the Defense Criminal Investigative Service, and,
the Department of Veterans Affairs and the Office of Personnel
Management (which administers the Federal Employee Health Benefits
Program).
\121\ In contrast, to qualify for the ``not less than double
damages'' provision of the False Claims Act, the report must be
provided to the government within thirty (30) days after the date
when the home health agency first obtained the information. 31
U.S.C. 3729(a).
\122\ The OIG believes that some violations may be so serious
that they warrant immediate notification to governmental
authorities, prior to, or simultaneous with, commencing an internal
investigation, e.g., if the conduct: (1) Is a clear violation of
criminal law; (2) has a significant adverse effect on the quality of
care provided to program beneficiaries (in addition to any other
legal obligations regarding quality of care); or (3) indicates
evidence of a systemic failure to comply with applicable laws or an
existing corporate integrity agreement, regardless of the financial
impact on Federal health care programs.
\123\ The OIG has published criteria setting forth those factors
that the OIG takes into consideration in determining whether it is
appropriate to exclude a health care provider from program
participation pursuant to 42 U.S.C. 1320a-7(b)(7) for violations of
various fraud and abuse laws. See 62 FR 67392 (1997).
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When reporting misconduct to the Government, a home health agency
should provide all evidence relevant to the alleged violation of
applicable Federal or State law(s) and potential cost impact. The
compliance officer, under advice of counsel, and with guidance from the
governmental authorities, could be requested to continue to investigate
the reported violation. Once the investigation is completed, the
compliance officer should be required to notify the appropriate
governmental authority of the outcome of the investigation, including a
description of the impact of the alleged violation on the operation of
the applicable health care programs or their beneficiaries. If the
investigation ultimately reveals that criminal, civil, or
administrative violations have occurred, the appropriate Federal and
State authorities \124\ should be notified immediately.
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\124\ See note 120.
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As previously stated, the home health agency should take
appropriate corrective action, including prompt identification of any
overpayment to the affected payor and the imposition of proper
disciplinary action. If potential fraud or violations of the False
Claims Act are involved, any repayment of the overpayment should be
made as part of the discussion with the Government following a report
of the matter to law enforcement authorities. Otherwise, normal
repayment channels should be used for repaying identified
overpayments.\125\ Failure to disclose overpayments within a reasonable
period of time could be interpreted as an intentional attempt to
conceal the overpayment from the Government, thereby establishing an
independent basis for a criminal violation with respect to the home
health agency, as well as any individuals who may have been
involved.\126\ For this reason, home health agency compliance programs
should emphasize that overpayments obtained from Medicare and other
Federal health care programs should be promptly disclosed and returned
to the payor that made the erroneous payment.
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\125\ A home health agency should consult with its Medicare
fiscal intermediary or HCFA for any further guidance regarding
normal repayment channels. The home health agency's Medicare fiscal
intermediary or HCFA may require certain information (e.g., alleged
violation or issue causing overpayment, description of the internal
investigative process with methodologies used to determine any
overpayments, disciplinary actions taken, and corrective actions
taken, etc.) To be submitted with return of any overpayments, and
that such repayment information be submitted to a specific
department or individual. Interest will be assessed, when
appropriate. See 42 CFR 405.376.
\126\ See U.S.C. 130a-7b(a)(3).
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III. Conclusion
Through this document, the OIG has attempted to provide a
foundation to the process necessary to develop an effective and cost-
efficient home health agency compliance program. As previously stated,
however, each program must be tailored to fit the needs and resources
of an individual home health agency, depending upon its particular
corporate structure, mission, and employee composition. The statutes,
regulations, and guidelines of the Federal and State health insurance
programs, as well as the policies and procedures of the private health
plans, should be integrated into every home health agency's compliance
program.
The OIG recognizes that the health care industry in this country,
which reaches millions of beneficiaries and expends about a trillion
dollars annually, is constantly evolving. In particular, the home
health industry is currently responding to recent legislative changes
that have created additional program participation requirements and is
gearing up for the changes underway in the areas of home health
reimbursement and payment methodologies. However, the time is right for
home health agencies to implement a strong voluntary compliance program
concept in health care. As stated throughout this guidance, compliance
is a dynamic process that helps to ensure that home health agencies and
other health care providers are better able to fulfill their commitment
to ethical behavior, as well as meet the changes and challenges
[[Page 42426]]
being imposed upon them by Congress and private insurers. Ultimately,
it is OIG's hope that a voluntarily created compliance program will
enable home health agencies to meet their goals, improve the quality of
patient care, and substantially reduce fraud, waste, and abuse, as well
as the cost of health care to Federal, State, and private health
insurers.
Dated: July 31, 1998.
June Gibbs Brown,
Inspector General.
[FR Doc. 98-20966 Filed 8-6-98; 8:45 am]
BILLING CODE 4150-04-P