Eligibility Criteria Permit Easy Access to the Home Health Benefit

Since Medicare’s inception, the home health benefit has undergone several changes in which coverage criteria and their enforcement have alternately tightened and relaxed. Diminished Oversight Ripened Opportunity for Exploitation

The relationship between the funding levels for payment safeguard activities and the proportion of claims reviewed helps explain the weak oversight of Medicare’s home health benefit in the 1990s. As a result of decreased review, agencies were less likely to be caught if they abused the home health benefit. Cost-report audits help identify providers’ attempts to shift inappropriate or unnecessary costs to the program. Certification Process Ineffective in Excluding Problem Providers

In our December 1997 report on the home health survey and certification process, we noted that becoming a Medicare-certified home health agency has been too easy, particularly in light of the number of problem agencies identified in various studies in recent years. Once certified, it was unlikely that home health agencies would be terminated from the program or otherwise penalized, even when they had been repeatedly cited for not meeting Medicare’s conditions of participation or for providing substandard care. Recent Legislation Fosters Greater Oversight, Introduces Payment Reforms

With the passage of HIPAA and BBA, the Congress recently provided important new resources and tools to fight fraud and abuse in general and home health care offenses in particular. In addition to earmarking funds for anti-fraud-and-abuse activities, the legislation offers specific civil and criminal penalties against health care fraud as well as opportunities to improve detection capabilities. For example, in an egregious case of home health fraud that our Office of Special Investigations reported on in 1995, the HHS Inspector General charged ABC Home Health Care with billing Medicare for items that were solely for the owner’s or his family’s personal use, including condominium utility expenses, maid services, and automobile lease payments. Medicare Fraud and Abuse: Summary and Analysis of Reforms in the Health Insurance Portability and Accountability Act of 1996 and the Balanced Budget Act of 1997 (GAO/HEHS-98-18R, Oct. 9, 1997). 5, 1997).
Why GAO Did This Study

GAO discussed Medicare benefit fraud and abuse in the home health industry, focusing on: (1) the general nature of beneficiary eligibility criteria; (2) the diminished Medicare contractor review and audit effort; (3) weaknesses in Medicare's home health provider certification processes; and (4) new tools Congress provided to strengthen oversight of the home health benefit.

What GAO Found

GAO noted that: (1) several historical factors have produced an environment that, until recently, has enabled improper billing and cost-reporting practices to grow unchecked; (2) legislation and coverage policy changes in response to court decisions in the 1980's made it easier for beneficiaries to obtain home health coverage and harder for Medicare claims reviewers to deny questionable claims; (3) from 1989 until recently, the volume of claims reviews and cost-report audits plummeted, reducing the likelihood that improprieties would be detected; (4) because of the laxity of Medicare's survey and certification process, agencies with no experience or proof of capability were certified as providers; (5) moreover, home health agencies were unlikely to be terminated or penalized even when they were cited repeatedly for providing substandard care or otherwise failed to comply with conditions of participation; (6) recent legislation has enhanced the Health Care Financing Administration's ability to improve its oversight of the home health benefit; (7) in 1995, a multiagency government effort known as Operation Restore Trust launched a new anti-fraud-and-abuse campaign, targeting home health services, among others, for investigation; (8) the following year, the Health Insurance Portability and Accountability Act of 1996 provided dedicated funding to finance, in part, the investigative efforts of the Department of Health and Human Services' Office of the Inspector General and other federal agencies; and (9) a year later, the Balanced Budget Act of 1997 mandated reforming Medicare's method of paying for home health services and contained additional provisions designed to tighten the use and oversight of the home health benefit.