Monthly Archives: December 2016

New Year – New CMS Ruling for Prior Authorizations for Four States Starts March 20, 2017

CMS announced in the Federal Register on Dec. 21 the selection of two power mobility devices to be subject to required prior authorization beginning March 20, 2017:

  • K0856: Power wheelchair, Group 3 standard, single power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds
  • K0861: Power wheelchair, Group 3 standard, multiple power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds

Suppliers or beneficiaries submitting claims in one of the four states listed below must receive prior authorization before the item is furnished or a claim is submitted as a condition for payment:

  • Illinois
  • Missouri
  • New York
  • West Virginia

CMS also announced its intent to expand the prior authorization process for codes K0856 and K0861 nationwide in July 2017.

The intent behind this new ruling is the prior authorization process will require the same information necessary to support Medicare payment today, just earlier in the process. It will not create new clinical documentation requirements. The prior authorization process assures that all relevant coverage, coding and clinical documentation requirements are met before the item is furnished to the beneficiary and before the claim is submitted for payment.

A link to the complete article can be found by clicking here.

OIG Report Identifies Common Characteristics in OIG Home Health Fraud Cases

Home health has long been recognized as a program area vulnerable to fraud, waste, and abuse. In 2015, Medicare reimbursed more than 11,000 home health agencies (HHAs) for almost 7 million episodes of home health care, totaling approximately $18.4 billion. From 2011–2015, OIG home health investigations resulted in more than 350 criminal and civil actions and $975 million in receivables.

Taking those figures into consideration, the OIG examined Medicare claims data for calendar years 2014–2015 to identify HHAs, supervising physicians, and geographic areas whose Medicare claims have characteristics similar to those observed by OIG in cases of home health fraud. The results of this project were released in June 2016. The report points out that the characteristics identified are not necessarily indicative of fraudulent activity, but they can be useful in identifying providers and geographic areas that warrant greater scrutiny. Overall, home health fraud generally involves HHAs that bill for services that are not medically necessary and/or not provided. The identified characteristics are as follows:

  1. High percentage of episodes for which the beneficiary had no recent visits with the supervising physician: More specifically, the beneficiaries identified had no claims in history for E/M services from the supervising physician in the preceding six months. In the documentation for the home health episodes, the physicians did not appropriately evaluate the beneficiary’s medical condition.

Identified fraud example: HHAs pay recruiters to collect beneficiaries’ Medicare numbers for use in fraudulent billing. Colluding physicians conduct limited evaluations or in some cases, no evaluations are conducted before certifying the beneficiaries’ eligibility for home health care.

  1. High percentage of episodes that were not preceded by a hospital or nursing home stay: Fro those claims examined, the home health episode did not shortly follow a hospital inpatient discharge or skilled nursing facility discharge within the previous 30 days.

Identified fraud example: HHA recruiters solicit beneficiaries from within a community to receive home health care, regardless of whether care is medically necessary or not.

  1. High percentage of episodes with a primary diagnosis of diabetes or hypertension: Some beneficiaries may require home health care related to diagnoses of diabetes or hypertension, however, too often claims with these primary diagnosis codes reflect medically unnecessary services.

Identified fraud example: Disproportionate composition of these primary diagnoses and fraudulent billing.

  1. High percentage of beneficiaries with claims from multiple HHAs: The OIG identified a high percentage of beneficiaries who received home health care from 3 or more HHAs over the course of 2 years.

Identified fraud example: HHA recruiters moved beneficiaries between HHAs to avoid suspicion or to obtain more favorable financial arrangements.

  1. High percentage of beneficiaries with multiple home health readmissions in a short period of time: Beneficiaries reportedly had two or more home health readmissions shortly following a home health discharge over the course of two years.

Identified fraud example: HHAs, with physician supervision, provided unnecessary care over a long period of time and tried to conceal the duration by periodically discharging and re-enrolling the beneficiaries.


The report also identified 27 home health fraud “hot spots “within 12 States: Arizona, California, Florida, Illinois, Louisiana, Michigan, Nevada, New York, Oklahoma, Pennsylvania, Texas, and Utah. In 2015, Medicare reimbursed HHAs for nearly 2.4 million home health episodes, totaling $6.9 billion, in the 27 geographic hot spots. This represents approximately 35 percent of home health episodes and 37 percent of home health expenditures nationally. Many of the 27 geographic hot spots identified are areas that are generally recognized as having high rates of Medicare fraud, including home health fraud. Similarly, several of the areas that were identified as hot spots are also areas in which CMS has imposed a moratorium on new HHA enrollments.

What should you do with this information?

If you provide home health services in any of the 27 fraud hot spots, be prepared for additional scrutiny of your home health claims by CMS and its contractors. Perform a self-audit of your claims to see how they compare to the identified characteristics. Although the report did indicate that these characteristics are not indicative of fraudulent activity, it did specify that they could be useful in identifying providers and geographic areas that warrant greater scrutiny. Medicare claims processing systems can easily edit claims for Physician NPIs, Diagnosis codes, Inpatient stays, and CPT codes – all data elements within the five identified characteristics.

If self-auditing isn’t something your agency has the time or manpower to allocate, we can help. For the past ten years, The van Halem Group has been a trusted resource for suppliers and providers need audit assistance. Our staff has a combined experience of more than 128 years employed with Medicare and other CMS contractors and have saved our clients over $30 million in overpayments. Let us put our knowledge and expertise to work for you! Contact us today to learn more about our proactive services, including claims audits and education.


2017 OIG Work Plan for Home Health Agencies

The OIG has published their Work Plan for 2017, which summarizes new and ongoing projects the OIG plans to pursue with respect to HHS programs and operations. Why is that important to you? Because once the OIG identifies their areas of focus, audit contractors such as the Home Health and Hospice Medicare Administrative Contractors (HHH MACs), Supplemental Medical Review Contractor (SMRC), Comprehensive Error Rate Testing contractor (CERT), Recovery Audit Contractor (RAC), and the Zone/Unified Program Integrity Contractors (ZPICs/UPICs) typically follow suit and focus on similar topics or issues.

By having this knowledge, you can make a determination on the vulnerability of your business practices and then take the appropriate steps to identify your risk areas. Once you’ve identified areas of risk you will be better suited to implement the appropriate controls or corrective action plans needed to minimize the possibility of an extensive prepayment review (which ties up your cash flow) or a postpayment review (which could result in an extrapolated overpayment).  Below, are the specific areas that the OIG will be reviewing for 2017, as it relates to Home Health Agencies.

Comparing HHA Survey Documents to Medicare Claims Data:

Home Health Agencies supply patient information (i.e. rosters and schedules) to State agencies during the recertification survey process, but State agencies do not have access to Medicare claims data to verify this information. Therefore, fraudulent HHAs might intentionally omit certain patients from information supplied to avoid scrutiny. Previous OIG work has shown that the home health program is prone to fraud, waste, and abuse. For 2017, the OIG plans to focus on whether the HHAs are accurately proving patient information to State agencies for recertification surveys.

Home Health Compliance with Medicare Requirements:

The Medicare home health benefit covers intermittent skilled nursing care, physical therapy, speech-language pathology services, continued occupational services, medical social worker services, and home health aide services. For CY2014, Medicare paid home health agencies (HHAs) about $18 billion for home health services. CMS’s Comprehensive Error Rate Testing (CERT) program determined that the 2014 improper payment error rate for home health claims was 51.4%, or about $9.4 billion. Recent OIG reports have similarly disclosed high error rates at individual HHAs. Improper payment rates identified in these OIG reports consisted primarily of beneficiaries who were not homebound or who did not require skilled services. The OIG will review compliance with various aspects of the home health prospective payment system and include medical review of the documentation required in support of the claims paid by Medicare with a goal of determining whether home health claims were paid in accordance with Federal requirements.


As always, being compliant in your billing practices to include having the appropriate documentation as to prove medical necessity can result in lesser scrutiny to your business, particularly in an audit. Being proactive in your processes, not only by ensuring your documentation meets policy requirements, but also through awareness of the services being reviewed by the OIG and other audit bodies allows you to prepare your files, as well as your office staff. The van Halem Group offers a wide array of audit services, including proactive, or prescreen claim reviews. If you want to be more prepared as we enter 2017 contact us. Since 2006 we have saved our clients over $30 million in claims denials and overpayments. Let us help you!

Audit Alerts – Jurisdiction D (Noridian)

Noridian Jurisdiction D recently announced the results of service specific prepayment reviews. Please see the list below to determine if the services you provide to beneficiaries’ in Jurisdiction D could be at risk for an audit.

Codes that will remain on prepayment review due to recently published improper payment rates:
• Therapeutic Shoes (A5500)
• Oxygen (HCPCS E0439, E0434, E1390, E0431)
• Hospital Beds (HCPCS E0260)
• Ankle-Foot/Knee-Ankle-Foot Orthosis (HCPCS L1960, L1970, L4360, L4361)
• Spinal Orthoses (HCPCS L0648, L0650, L0631, L0637)
• Knee Orthoses (HCPCS L1832, L1833, L1843)
• Urological Supplies (HCPCS A4351, A4353, A4358)
• CPAP (E0601 – KH and KJ)
• External Infusion Pumps (J1817)
• Support Surfaces (Group I – E0181, E0185)
• TENS (E0730)

For complete details on these reviews, refer to the Noridian DME MAC Region D website here: