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GOV’T AUDIT INSIDER: Inappropriate home health therapy billing in LA

Healthcare Auditing Weekly, August 16, 2005

Red Oak Home Health Services in Los Angeles received appropriately $187,627 in Medicare overpayments for home health therapy services because the claims failed to meet federal criteria, according to an OIG audit report. Of 74 selected paid claims, 65 did not meet the federal requirements and were not appropriately paid.

The OIG recommends that Red Oak refund Medicare and identify and submit adjusted home health claims for Medicare overpayments received subsequent to the audit period. The OIG also recommends that Red Oak establish quality assurance procedures, including periodic independent review, to confirm that patient needs during the home health episode of care are properly reassessed and the level of care is adjusted accordingly to meet the requirement for medical necessity and is properly authorized by a physician.

During the audit, the OIG did the following:

• Reviewed applicable federal criteria and state laws and regulations

• Identified Red Oak's home health prospective payment system paid claims from October 1, 2002, through September 30, 2003, that included at least one therapy session

• Selected for review paid claims submitted by Red Oak

• Obtained Red Oak's medical records for each selected claim and medical review data

• Reviewed Red Oak's policies and procedures for providing therapy and billing Medicare

• Interviewed Red Oak's physical therapist and reviewed documentation

• Determined what the appropriate billing code and amount would have been for claims with unallowable services

• Quantified the Medicare overpayment for unidentified unallowable services billed by Red Oak

Click here to read the audit report, "Review of Selected Paid Claims with Therapy Services Submitted to Medicare by Red Oak Home Health Services for the Period October 1, 2002 Through September 30, 2003," (A-09-04-00050) issued July 8.

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