Home-care providers are up in arms about two government reports issued last week that cast the home health industry in an unfavorable light. The reports came just as Congress considers legislation to ease restrictions on Medicare home health payments and just days after HCFA proposed a new prospective payment system for the industry.
According to the first report from HHS' inspector general's office, 19% of 1998 home health Medicare payments in four states were billed improperly.
"The timing (of the report) is very interesting given the fact that they are talking about having the improper payment rate included in the PPS," said Connie Little, senior vice president of the California Association for Health Services at Home, a home health trade group.
The study was a repeat of a 1997 survey of home health agencies in California, Illinois, New York and Texas, which found 40% of Medicare payments made to agencies were improper.
That figure, hotly contested by the home health industry, played a key role in policymakers' decision to slash home health payments in the Balanced Budget Act of 1997.
An interim payment system implemented in October 1997 cut Medicare payments to home health agencies by about 38% to $10.4 billion in 1998, according to the latest HCFA figures.
Lawmakers in both houses are considering delaying or phasing in a 15% cut in payment rates slated to go into effect before October 2000.
The 19% improper-billing rate detected in last week's HHS report, although it is about half of 1997's error rate, is still "far too high," according to the report.
The drop tracks a similar decline in overall Medicare error rates in bills submitted by providers. HHS' inspector general's office estimated an overall improper payment rate of about 14% for 1996. That number had dropped by half to 7.1% in 1998.
In comments to the agency, HCFA pointed out that about one third of the 19% error rate in 1998 was attributable to missing information from agencies that had closed or been acquired by other companies. Had those records been found, HCFA wrote, "it is possible that the (inspector general's) error rate estimate would have been lower."
The home health industry does not often find itself on the same side of the fence as HCFA.
HCFA's recently proposed PPS for home health agencies prompted industry predictions of financial difficulties.
But HCFA disagreed with the report's recommendation that it factor in the 19% error rate to the PPS by lowering rates, saying that the rates it had set did not reflect inflated excess costs.
Meanwhile, a second report, also released last week by the inspector general, purported to show that patient access to home health has not been impeded by the October 1997 cuts as the home health industry has repeatedly warned would happen.
In interviews with 181 discharge planners, the agency found that 85% of them could find home healthcare for patients when they needed it. Of the 15% of discharge planners who said they were not always able to find agencies that would accept patients, nearly half attributed their difficulties to lower Medicare payments to home health agencies.
Little noted that since hospital discharges account for less than half of all home health patients, the report does not accurately capture the true level of beneficiary access to home health.