On June 22nd, 2016, the Justice Department announced the largest Medicare fraud takedown to date. 301 people were charged for over $900 million in false claims submissions. Home healthcare was one of the most prevalent sources of fraud allegations in the takedown.
Home healthcare is an important component of America’s medical system. Physicians at hospitals or Skilled Nursing Facilities (SNFs) can refer patients for supervised at-home treatment. This treatment is eligible for federal reimbursement in some cases, but it is subject to a variety of regulations and requirements.
The benefit of home healthcare is that it can offer greater comfort and autonomy to patients than a hospital might. It can also help the government and taxpayers save on the cost of medical facilities.
This healthcare model is at significant risk for fraud, however, because it takes place in private residences. Federal and physician oversight is therefore infrequent when compared to the oversight in SNFs or hospitals.
Home healthcare as a target for fraud
Limited oversight is a key reason for the pervasiveness of home healthcare fraud, but the growth of the industry itself could also be a significant factor.
Agencies that specialize in home healthcare are projected to grow 48% by 2022. It’s a complex industry, because it relies on the integrity not only of the in-home providers, but also that of the referring healthcare centers and supervising physicians.
If anyone in that process decides to disregard federal healthcare regulations, patients can be put at risk, and taxpayer dollars can be easily misused.
Although registered nurses often administer home healthcare services, some state programs enable family members to receive reimbursement for administering care to a loved one.
Regardless of who administers the healthcare services, there are many types of fraud that can arise. When providers request reimbursement for services not provided, or lie about the extent or nature of the services provided, they can be accused of false claims submissions.
A common scheme is the submission of false background checks for healthcare providers. This practice may appear in conjunction with the recruitment of non-eligible patients as part of a larger kickback scheme.
The department of Health and Human Services Officer of the Inspector General (OIG) released a report highlighting key data about home healthcare agencies (HHAs), as well as physicians who supervise this type of medical care.
The report used five common red flags for potential fraud to indicate which providers may need more careful scrutiny. The analysis identified physicians and HHAs that consistently fall outside of standard claim submissions patterns.
According to the analysis, 562, or approximately 5% of HHAs nationwide, and 4502, or approximately 1% of physicians that supervise home healthcare, raised two or more red flags between 2014 and 2015.
A key finding from the report was that physicians are often central to home healthcare fraud schemes, because it is their responsibility to approve treatments for beneficiaries. This also means, however, that physicians could be essential in stopping fraud schemes by staying alert to red flags spotted during required checkups or when recommending home healthcare in the first place.
The OIG analysis also highlighted geographic regions around the country that may be particularly vulnerable to home healthcare fraud schemes. The 27 hotspots identified include Chicago, South Florida, Las Vegas, Houston and San Diego.
Home healthcare fraud in the news
Home healthcare fraud can be committed by individuals, agencies or, in some cases, a large network of physicians, nurses and patients.
One of the most egregious instances of fraud committed by an individual occurred in 2015. Linda Maureen Raye was sentenced to 11 years in prison for elder abuse after subjecting her mother to a fatal fraud scheme.
Raye coerced her mother, who had limited mobility, into leaving a nursing home and registering for home treatment under California’s low-income healthcare program. The program allows friends and family members to receive Medicare reimbursement for eligible care.
Instead of following the state’s requirements, which included adhering to a nurse’s care instructions and taking her mother to regular doctor appointments, Raye used the Medicare reimbursements to finance a one bedroom apartment and neglected her mother. Raye’s mother eventually died of an illness related to severe bedsores.
The report found that physicians are often central to home healthcare fraud schemes.
In June 2016, a Maryland couple was issued a prison sentence for defrauding Medicaid of over $80 million over the course of six years.
The couple ran a home healthcare agency, and had enlisted family members to participate in a kickback scheme. The scheme was designed to recruit ineligible patients and generate millions in federal reimbursements.
The couple was eventually charged with fraud, conspiracy, and money laundering, and was forced to forfeit millions of dollars in cash and assets.
One of the most elaborate home healthcare schemes to date involved a Dallas physician, Jacques Roy, and his three co-conspirators, who owned agencies.
The team targeted a Dallas homeless shelter, offering payment to homeless people who would pose as Medicare patients with false conditions. Recruiters—in this case, nurses who worked for the three agencies–were paid $50 per individual they could convince to join the scheme.
The HHA nurses then passed the false medical documents to Roy, who certified that they were legitimate so that he could receive federal reimbursement.
By the time the scheme was detected, the four fraudsters had defrauded $375 million from Medicare and Medicaid. Over 11,000 beneficiaries were used throughout the scheme. All four individuals were found guilty; their sentencing will take place in Fall 2016.
How can providers detect home healthcare fraud?
Although it can take time for the government to detect home healthcare fraud, doctors, nurses and pharmacists can be instrumental in raising the alarm when red flags appear.
Since most of these patients start out in hospitals and SNFs, the employees at those facilities serve an important role in fraud prevention. Having a thorough understanding of Medicaid and Medicare regulations for home-based care is an essential step towards ensuring that all employees and prospective providers are following the rules.
Much of home healthcare fraud involves intentional billing errors, so the physicians certifying federal healthcare claims can report repeated or suspicious inconsistencies.
Medicare data can also be instrumental in combating fraud. Analyses like the HHS report leverage nationwide billing data to spot red flags so that suspicious activity can be tracked early on. Efforts like these could help deter providers who may be tempted to abuse the system.
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