Home health agencies routinely face scrutiny from federal auditors. Home health agencies that contract with Medicare to provide services to Medicare beneficiaries must ensure that operations are compliant with all federal healthcare laws. If CMS suspects something is amiss in your home health agency, whether it be your billing practices or provision of medical services, your agency is at risk for an audit.
What Triggers an Audit?
As a home health agency, like all other entities that provide services to Medicare beneficiaries, you must adhere to all applicable Medicare guidelines and regulations. Below are common reasons home health agencies have been audited:
- Failure to appropriately document medical services being provided
- Not having a face to face encounter as required
- Billing for medically unnecessary services
- Improperly certifying patients to receive home health services
- Billing for medical services not provided
- Double billing
- Upcoding and/or bundling services
- Utilizing the incorrect billing codes
- Using unlicensed providers at your home health agency
- Submitting claims not eligible for reimbursement
There are numerous reasons your home health agency could be selected for an audit. If your home health agency receives an audit, it is important not to panic. Just because you receive a request for an audit not mean CMS has already found you guilty of wrongdoing. If you receive an audit, it simply means CMS has questions and needs further information about practices occurring at your home health agency.
Your home health agency, if selected for an audit, will receive a letter request from CMS. This letter will state that your home health agency is being audited and you will be required to produce certain documents in response to the audit. Depending on what you are being audited for will dictate what records CMS requests. If your home health agency is being audited due to suspected lack of medical necessity for services provided, you likely will be asked to produce patient records.
It is critical not to ignore an audit. Upon receipt of the audit letter or notice, you have a specified number of days in which to respond to the audit. If you do not respond, CMS will make negative inferences from this lack of response and the outcome will not be good for your home health agency. When you receive notice of an audit, your first step should be to hire an experienced healthcare attorney. Although providing the requested records to the auditor is simple enough, an attorney will be able to find out what triggered the audit and guide your home health agency through the audit process.
If an audit is not handled properly, it can escalate and potentially spiral into something more serious. While a request for an audit often is normal for providers in the healthcare space, findings from an audit can subject your home health agency to civil or criminal liability. If after reviewing the records you submit to the auditor without any explanation on your behalf from an attorney, the auditor can refer his or her findings to federal authorities if warranted. The federal authorities, like the US Attorneys Office, can review the auditor’s report and findings and bring additional civil or criminal charges if necessary.
Even if an audit does not end up in the hands of the federal authorities, audit findings can have significant impact on the bottom line of your home health agency. If an auditor finds that your home health agency was billing improperly for either medical necessity or any other reason, the auditor can send a demand for overpayment to your home health agency. An overpayment demand will itemize all claims and amounts that were previously paid to your home health agency that now need to be refunded to the government. Overpayments can be substantial and should never be accepted as fact.
If your home health agency receives a demand for an overpayment as a result of an audit, you have the right to appeal the overpayment decision. The appeals process is a one-shot attempt to either lower the overpayment or negate it altogether. Healthcare counsel needs to be engaged to ensure the appeal is handled properly so you home health agency is best positioned to fight the audit. Your appeal needs to include a detailed explanation of why the audit findings are incorrect. Your appeal should be supported by relevant documentation that substantiates the arguments laid out in the explanation letter.
Audits can be a tedious process to work through. As a home health agency, there are several things you can do proactively to help you better respond to an audit and be better positioned for any audits that occur in the future.
- Be apprised of all federal rules and regulations surrounding the operation and billing of home health services. The CMS manual has specific rules directed at home health agencies. These rules entail what documentation must be kept, how patients can be certified for home health services, and proper reimbursement requirements for billing home health services. If you operate a home health agency, you must keep up to date with all applicable rules and regulations.
- Document everything. Good documentation can be the difference in succeeding in an audit. If your home health agency does not keep accurate and complete records, the likelihood of substantiating your provided services to an auditor are slim. Make sure your home health agency has a good system for organized record keeping.
- Have a compliance program. As a home health agency serving Medicare patients, you are expected to be fully complaint with all applicable federal rules and regulations. Establishing a compliance program can not only ensure your home health agency is compliant but can also proactively catch potential non-compliant activities. Catching these non-complaint activities before they materialize can stave off future audits or investigations.