Three major for-profit home health companies have been accused of “gaming” the federal Medicare program, resulting in Medicare waste and potentially unnecessary care in an attempt to increase the companies’ profits.
The allegations come after the publication of a Senate Finance Committee investigation on Oct. 3. The committee, headed by Chairman Max Baucus, D-Mont., and senior Finance Committee member Chuck Grassley, R-Iowa, examined the home health therapy practices at four major U.S. home health companies – Amedisys, LHC Group, Gentiva and Almost Family. Part of the committee’s role is to oversee the Medicare and Medicaid programs.
The committee’s investigation, launched in May, was in response to a Wall Street Journal analysis that showed patterns that these home health companies took advantage of the Medicare therapy payment system by providing “medically unnecessary” patient care.
Since 2000, the Medicare payment model has tied the amount of payment to the level of utilization of therapy. The original 2000 payment model provided a higher payment rate to providers once the patient received 10 therapy visits during a 60-day time period, known as an episode of care.
In 2008, Medicare revised that model, setting increased payment thresholds at six, 14 and 20 visits. The change was made because of concerns from Medicare and the home health community that the single 10-visit threshold encouraged underutilization as well as overutilization of therapy.
The Senate Finance Committee report concluded that three of the investigated companies – Amedisys, LHC Group and Gentiva – intentionally increased their number of home health visits to boost their profits. The review found that these companies encouraged employees to target the most profitable number of home health visits, even when patients may not have needed them. Records at each company also showed concentrated numbers of home health visits at or just above the point at which a “bonus” payment was triggered by the Medicare program.
For example, at Amedisys, a review of internal documents and communications provided to the committee shows that the company’s executives directed employees to adjust the number of home health therapy visits to maximize Medicare payout to the company after 2008 changes to the Medicare payment system.
Gentiva and LHC Group had similar practices, although the report notes that while patient visit patterns at Almost Family were comparable to those of the other investigated home health companies, none of the documentation provided by Almost Family showed that the company’s management had policies in place to increase visits in an effort to maximize profit.
“The gaming of Medicare represents serious abuse of the home health program,” Baucus said in a statement. “Elderly patients in the Medicare system should not be used as pawns to increase a company’s profits. Especially in these tough economic times, taxpayers simply cannot afford for their dollars to be wasted on unnecessary care.”
Baucus said that the government is going to crack down on companies with unlawful and unethical practices to make sure Medicare dollars are used efficiently and patients are protected.
“The reimbursement policy encourages gaming, and gaming is what’s occurred,” Grassley said in a statement. “Companies are doing everything they can to make as much money as possible, whether the patients need the care or not.”
Grassley said the government needs to fix the Medicare reimbursement process to Medicare to discourage home health companies from engaging in these types of practices.
The National Association for Home Care and Hospice responded to the Senate Finance Committee report, saying that there have been systemic Medicare payment problems since its inception in 2000.
“Home health care has recommended that Medicare set payment rates based on the nature of the patient rather than the volume of services rendered, therapy or otherwise,” the organization’s president Val J. Halamandaris said in a statement.
The report follows on the heels of a proposed rule by the Centers for Medicare and Medicaid Services that would modify but not remove the impact of therapy visit volume.
Halamandaris said the proposed Medicare rule is a step in the right direction but it has recommended a series of legislative proposals that would further reform the home health payment system. These proposals will remove the level and amount of therapy as a determent in payment.
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