Hollywood, Florida HomeCare Provider Agrees, "Elderly patients in the Medicare system should not be used as pawns to increase a company's profits" U.S. Senate Finance Committee finds home healthcare companies Amedisys, Gentiva Health and LHC Group at fault for Phony Medicare Billing
By Kavyanjali Kaushik
Reuters
October 3, 2011
(Reuters) - The Senate Finance Committee said Amedisys, Gentiva Health and LHC Group, three of the biggest players in the home healthcare industry, altered the course of patient care treatment to receive more reimbursements.
However, analysts suggested the conclusion of the investigation should help the Centers for Medicare & Medicaid Services (CMS) better frame the final structure of reimbursement for home healthcare providers, which provide home-based nursing for the elderly with chronic diseases.
Last year, the Securities and Exchange Commission, the Justice Department, and the Senate committee launched investigations into home healthcare billing practices, prompted by a media report that suggested providers intentionally increased therapy visits to trigger higher reimbursements.
"Therapy visit records for each company showed concentrated numbers of therapy visits at or just above the point at which a "bonus" payment was triggered in the prospective payment system," the committee said in its report.
The committee said it found internal documents and emails from the companies' management urging their therapists to increase patient visits to raise Medicare reimbursements after the proposed 2008 cut in payments.
"We took a financial hit for any therapy provided below 10 visits in the past," LHC Group chief executive Keith Myers wrote to a company manager in one of the emails, according to the report.
"Once you get to 6 visits, the more therapy visits provided the better, up to 20 visits," the report quoted from the email.
The report also quoted emails from the managements of Amedisys and Gentiva that exerted similar pressure on their employees to raise the number of therapy visits.
However, the committee noted that Almost Family Inc , another big industry player under scrutiny, did not push its therapists to raise the visit threshold, though it appeared to push for an increase in the number of patients receiving higher level of treatments.
Shares of Almost Family were down 7 percent at $15.51 on Nasdaq on Monday.
"We are disappointed with the committee's conclusions, and we stand by our company's integrity, ethics, and patient care practices," Amedisys said in a statement issued in response to the committee's report.
In a statement, Senate Finance Committee Chairman Max Baucus said "the gaming of Medicare represents serious abuse of the home health program. Elderly patients in the Medicare system should not be used as pawns to increase a company's profits."
Stephens Inc analyst Ellen Spivey said none of this means the companies have committed fraud.
"This report does not accuse the companies of fraud but rather it is interesting to see that two leaders of the committee specifically termed it "gaming the system," which is often code for we don't like what you did but technically it isn't illegal," Spivey said.
CLEARER PATH FORWARD
Spivey added that since this was the first update on the investigations that were launched a year and half ago, it could give some clarity to the investors who have been worried with all the uncertainties.
Shares of these top home health providers have dropped by 20-30 percent in the last six months, dragged down by the increased scrutiny and uncertainty about the reimbursement cuts.
"From an investor standpoint, it is the uncertainties that are really killing them right now," RBC Capital Markets analyst Frank Morgan said.
"I think getting these investigations out of the way or getting their conclusions out on the table can expedite the process of accessing all the changes that need to be made."
"What needs to happen now is that when CMS creates a perfect reimbursements system, these providers should operate in it," Morgan said.
CMS has proposed a 3.35 percent cut in its 2012 reimbursement rate to home health companies.
Online: http://www.chicagotribune.com/health/sns-rt-us-home-healthcaretre792682-20111003,0,2937525.story
http://www.chicagotribune.com/health/sns-rt-us-home-healthcaretre792682-20111003,0,2937525.story
Below: Read the U.S. Senate Finance Committee testimony in the September 21, 2011 hearing, entitled "Dually-Eligible Beneficiaries: Improving Care While Lowering Costs." (with video)
Witness Testimony
Ms. Melanie Bella, Director, Medicare-Medicaid Coordination Office, United States Department of Health and Human Services, Washington, DC
The Senate news release is reprinted below:
Baucus, Grassley Uncover Gaming of the Medicare System by For-Profit Home Health Companies
Finance Senators Release Report Showing Companies Intentionally Increased Frequency of Home Health Visits to Manipulate Reimbursement Rates
Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and senior Finance Committee Member Chuck Grassley (R-Iowa) today released a Finance Committee staff report showing tactics used by major for-profit home health companies to game Medicare. The result has been waste of taxpayer dollars and the delivery of what could be medically-unnecessary patient care to increase the companies’ profits. Baucus and Grassley initiated the investigation into the improper practices as part of the Committee’s oversight role of the Medicare and Medicaid programs and the Senators’ ongoing commitment to protect patients and taxpayer dollars from waste, fraud and abuse.
“The gaming of Medicare represents serious abuse of the home health program,” said Baucus. “Elderly patients in the Medicare system should not be used as pawns to increase a company’s profits. Especially in these tough economic times, taxpayers simply cannot afford for their dollars to be wasted on unnecessary care. We are going to continue to crack down on these companies to ensure taxpayer dollars are used efficiently and Medicare patients are protected.”
“The reimbursement policy encourages gaming, and gaming is what’s occurred. Companies are doing everything they can to make as much money as possible, whether the patients need the care or not. The federal government needs to fix the policy that lets Medicare money flow down the drain. This can’t wait until tomorrow. It should have been done yesterday. The longer this kind of policy continues, the more Medicare’s budget balloons, and the bigger the burden on taxpayers,” Grassley said.
In May 2010, Baucus and Grassley began their investigation into home health therapy practices at Amedisys, LHC Group, Gentiva, and Almost Family in response to a media report that these home health companies took advantage of the Medicare therapy payment system by providing medically-unnecessary patient care.
The Committee staff report released today examines documents provided by the companies which show how therapists were encouraged to target the most profitable number of therapy visits, even when patient need may not have required such visits. In addition, therapy visit records for each company showed concentrated numbers of therapy visits at or just above the point at which a “bonus” payment was triggered by the Medicare program.
Internal documents from three of the four companies, Amedisys, LHC Group and Gentiva, provided evidence of top-down strategies to game Medicare. Highlights from the report include:
Managers encouraged therapists to meet a 10-visit target that would have increased their payments from Medicare.
The Senators also spearheaded a two-year inquiry which revealed undisclosed side effects of the diabetes drug Avandia. This resulted in the FDA restricting use of the drug, ensuring that patients and doctors have the information they need to make safe, informed decisions about their medication.
The Committee’s full report is available by clicking here.
For more information about a Miami-Dade, Broward and Palm Beach County home health care and homecare agency for seniors, Alzheimer's patients, sufferers of dementia and other family members needing home health care services or in-home health aides, contact Brian Gauthier at A Family Member HomeCare (954) 986-5090 or visit www.afamilymemberhomecare.com.
- An “A-Team” tasked with developing programs to target the most profitable Medicare therapy treatment patterns.
- Therapists and regional managers that were pressured to follow new clinical guidelines developed to maximize Medicare reimbursements.
- Top managers instructed employees to increase the number of therapy visits provided in order to increase case mix and revenue.
- A competitive ranking system for management aimed at driving therapy visit patterns toward profitable levels.
- Evidence that management discussed increasing therapy visits and expanding specialty programs to increase revenue.
The Medicare Part A program pays out an estimated $19 billion yearly for home health care. Fraud, waste and abuse in the health care system cost Americans an estimated $60 billion a year, approximately three percent of total health care spending.
Baucus and Grassley have led numerous major investigations of the health care industry to protect consumers and taxpayer dollars. Earlier this year, when their
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