Over the past several years, CMS audits of home health agencies have become more prevalent. Allegations regarding fraud occurring within home health agencies has been a major factor in the increasing volume of audits. If you are the owner or operator of a home health agency, receiving an audit request is not something you look forward to, you have a business to run and patients to care for. However, not handling an audit properly can lead to more severe consequences than just having to devote time to respond to the request.
If you receive an audit request, do not immediately panic. Your home health agency may be getting audited for one of many reasons. Just because you receive an audit request does not mean that CMS has already found you guilty of wrongdoing. Home health agencies receive audit requests because CMS believes there is some sort of issue that requires further investigation. Reasons your home health agency can receive an audit request can include the following:
- Documentation does not support services billed
- Medical necessity is being questioned with regard to services provided
- Improper billing codes are being used
- Billing is occurring for services not being provided
- Patients do not meet the CMS criteria for home health services
- Improper licensing of the home health agency’s medical providers
- Incident-to billing is being submitted improperly
- Face-to-face encounters are not documented or occurring
- Plan of care is not accurate or being documented
The above is not a complete list of reasons for receiving an audit but represents some of the most common reasons home health agencies receive audit requests. Home health agencies need to ensure that they are following all CMS related guidelines. CMS has outlined specific criteria of eligibility for home health services. Specifically, all home health agencies must ensure that all patients must be under the care of a physician, have a face-to-face encounter with that physician and have an established plan of care. Home health agencies need to be diligent in keeping accurate records for each patient in case of an audit. CMS regulations need to be constantly monitored to ensure compliance within your home health agency.
Once you receive an audit request, you have a specified number of days to respond. At this stage, it is important to engage experienced healthcare counsel to help you respond to the audit. The audit response should not just be a gathering of records and then waiting for a response from CMS detailing its findings. An attorney will be able to contact the auditor to find out specifics of why your home health agency is being audited and what the underlying issues are. Identifying what the underlying issues are is critical to forming an appropriate response. Although past issues with regard to patient care, medical necessity or billing cannot be undone, they can be fixed going forward with a corrective action plan. A corrective action plan can potentially stop an audit from being referred for further investigation and review from additional government authorities.
Operators of home health agencies often do not realize that auditors have authority to refer their findings to the US Attorney’s office if they feel fraud has occurred. This is not an automatic process with all audits, but receipt of an audit request does potentially expose your home health agency to further criminal and civil action. If an auditor uncovers potential fraud during the course of his or her review of the records you submitted, the auditor can approach the federal authorities with their findings. The federal authorities will review the auditor’s findings and decide whether or not to take further action. If further action is taken, your home health agency could face criminal charges.
As stated above, the best way to mitigate potential damaging effects from an audit it to be proactive. Have your attorney find out why you are being audited. Often, audits can arise out of a simple misunderstanding relating to a billing mistake or otherwise. For example, your home health agency may use an independent billing company to submit your claims and the billing company may be misusing a billing code, unbeknownst to you. Proper early identification of this billing issue can be explained to the auditor and your home health agency can take appropriate corrective action to ensure your billing company is apprised of the correct billing codes to us. You do not want the auditor to think this misuse of a billing code was intentional, thus fraudulent.
Rest assured, not all audits result in a referral to the US attorney’s office or other government authorities. A common outcome of an audit is a potential overpayment. An overpayment is when the auditor determines that your home health agency was paid for claims it should not have been paid for. If an overpayment is determined as a result of the audit, a final review letter will be sent to your home health agency detailing as such. You do have the ability to appeal this overpayment determination, should there be on. If the overpayment amount is based on lack of medical necessity, you will have the opportunity to show that there was medical necessity to substantiate the services billed. An effective appeal to an overpayment is usually done by way of a detailed written response as to why the overpayment is not justified along with supporting documentation that corroborates your assertions.
As a home health agency operator, your primary focus is to provide the best possible care to your patients, patients that are often some of the most vulnerable in society. Although an audit can be viewed as a routine “cost of doing business” in the medical field, audits should not be handled without the proper care. Taking a proactive approach to an audit can potentially save your home health agency significant money and also avoid the audit escalating to a full government investigation.