HCFA Administrator Nancy-Ann Min DeParle warned all Medicare-certified home-care agencies in a letter last week to continue caring for beneficiaries or else face a federal audit.
The government is concerned that a change in Medicare home health payments might spark providers to "dump" patients.
Meanwhile, two patient rights groups filed the first lawsuit over the alleged dumping of Medicare patients by a home health agency.
The groups charged that Fort Lauderdale, Fla.-based Interim Healthcare ended care for three patients after HCFA implemented new per-beneficiary Medicare cost limits.
The groups filed their class-action suit last Dec. 30 in Davidson County, Tenn.
The sides are scheduled to meet for a hearing Feb. 25, said Vicki Gottlich, an attorney with the Washington-based National Senior Citizens Law Center, which filed the suit with the Tennessee Justice Center.
Until last September, Interim Services owned Interim Healthcare when it was sold to Cornerstone Equity Investors, according to an Interim Healthcare spokeswoman.
"We are continuing to service two of (the patients in the lawsuit) and the other was transferred to another agency," the spokeswoman said. "No one went without care."
According to the DeParle letter, HCFA is concerned that some home health agencies have been "misinforming beneficiaries or inappropriately terminating care for Medicare enrollees."
DeParle said such actions would be "considered the basis for a complaint survey that could lead to termination . . . from Medicare."
In a congressional hearing late last month, Rep. Pete Stark (D-Calif.), the senior Democrat on the House Ways and Means health subcommittee, said the agencies were "scaring" seniors into calling or writing members of Congress to express opposition to the payment system.
The new payment system is an interim one in effect for agency fiscal years that began after Sept. 30, 1997. The interim system will end with implementation of a prospective payment system Oct. 1, 1999.
The interim payment system requires that Medicare pay home health agencies the lesser of their actual costs, a per-visit limit or an aggregate agency payment limit that is based on the average cost of treating each of their Medicare patients. HCFA is concerned the new law will give agencies an incentive to "dump" costlier patients.