by Tim Rowan | Aug 9, 2023 | Editorial
analysis by Tim Rowan, Editor
It is good to occasionally remind ourselves that 2023 is the year enrollment in Medicare Advantage reached a full half of Medicare beneficiaries. Originally conceived as a plan to control spending, MA does seem to be achieving that goal.
At what cost, however?
The Medicare trust fund pays insurance companies participating in the MA program a per-patient-per-month fee based on the company’s own declaration of each customer’s health and likely future needs. With those monthly payments, MA companies provide care as needed. Or at least they are supposed to.
Frequently, since the program began, whistleblowers have told the government that employees are rewarded for increasing a patient’s risk-adjustment, the clinical assessment that is supposed to be scored by a physician but is often instead scored through data mining. That practice involves employees searching through patient records, looking for signs of health conditions that would raise their assessment, and thus their value to the insurer. In other words, a class of crime that would earn an HHA a hefty fine if they did it with their OASIS assessments.
Evidence has been mounting lately that these insurance companies not only fudge the numbers to gather more than they should from Medicare, but they also provide as little care as they can get away with. Our industry is familiar with the penny-pinching MA companies practice when authorizing in-home care. The problem is larger than that.
String of Recent Accusations
- The HHS Office of Inspector General issued a report revealing how Elevance, the company formerly known as Anthem, made $5.5 billion in profits in the first six months of this year, a 14.4% jump from the $4.8 billion in profits it made during the same period of 2022. The profits, OIG said, came mostly from denying care to Medicaid beneficiaries, care that their physicians had recommended.
- The largest insurer, with 27 percent of the market, UnitedHealth’s investors were distraught in June when it appeared the company was spending too much on patient care. Their fears were calmed, however, when United reported revenue of $56.3 billion for 2Q 2023, compared to $45.1 billion in the same quarter of 2022.
- Cigna is the target of a class action suit in California, in which it is accused of using an algorithm to deny care, overriding and sometimes ignoring physician recommendations.1
Last October, the New York Times summarized the problem with a list of recent government findings and accusations:
“Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found enough new diagnoses could earn bottles of champagne, or a bonus in their paycheck.
“Elevance Health paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.
“Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.”
Comparison to Home Health and Hospice
Naturally, these examples reach into the hundreds of billions because MA covers hospital and physician claims, but the comparison to our sector is nevertheless valid.
Since payments to HHAs were first attached to patient assessments a quarter century ago, clinicians have gotten better and better at the task. OASIS assessments are more accurate and thorough than they used to be. Professional coders are more adept at identifying and sequencing appropriate diagnosis codes. AI-assisted tools entering the fray promise an enhanced level of accuracy. (See our product review of the most promising of these tools.)
From the beginning, more accurate assessments have always meant a 10 to 15 percent increase in an agency’s episodic payment over less accurate OASIS scores. Wary of being accused of upcoding, nurses have always been unnecessarily cautious with their intake assessments.
Upcoding Accusations
CMS has always responded to increasing accuracy with accusations of upcoding, even though the Medicare trust fund more often benefits from the above described undercoding habit. Regulatory adaptations have enshrined the fear of upcoding into an assumption that it will happen, with payments slashed in advance just in case it does.
When errors in assessments and claims are discovered by CMS contractors through sampling, the overpayment amount found in the sample is extrapolated to an agency’s entire patient census. The result has at times crossed the line into seven figures, with a payback demand that occasionally cripples the HHA.
Compare this practice to the gift given to MA companies that we revealed in these pages last February: “Government Lets Health Plans That Ripped Off Medicare Keep the Money” In researching that story, we found that CMS typically postpones its duty to audit the risk adjustment figures that MA plans submit annually. After getting more than a decade behind, they decided to write off overpayments to MA plans prior to 2018 and start auditing from that year forward.
As an additional gift they said they would demand repayments only on the amounts turned up in their sample dataset, without extrapolating to each MA’s total patient population as they do with HHAs.
What can one conclude from this comparison? Possibly that CMS is very good at policing millions of dollars but gets overwhelmed and gives up with amounts in the billions.
Tim Rowan is a 30-year home care technology consultant who co-founded and served as Editor and principal writer of this publication for 25 years. He continues to occasionally contribute news and analysis articles under The Rowan Report’s new ownership. He also continues to work part-time as a Home Care recruiting and retention consultant. More information: RowanResources.com
Tim@RowanResources.com
©2024 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in Healthcare at Home: The Rowan Report.homecaretechreport.com One copy may be printed for personal use: further reproduction by permission only. editor@homecaretechreport.com
1 https://sharylattkisson.com/2023/08/class-action-suit-filed-against-cigna-over-alleged-use-of-algorithm-to-review-reject-patient-claims/
by Elizabeth E. Hogue, Esq. | Jul 12, 2023 | CMS, Regulatory
by Elizabeth Hogue, Esq.
For providers to be liable under the federal False Claims Act, enforcers must prove that they knowingly submitted false claims. The U.S. Supreme Court recently issued an opinion in United States ex rel. Schutte v. SuperValu, Inc. [No. 21-1326 (U.S. June 1, 2023)], which defines what “knowingly” means. The Court decided that providers act knowingly depending on their “culpable state of mind” when they submitted alleged false claims; not what providers may have thought after submitting them. The requirement to prove knowledge, or “scienter,” said the Court, refers to providers’ knowledge and subjective beliefs; not to what objectively reasonable persons may have known or believed.
On June 30, 2023, the U.S. Supreme Court issued orders that revive two whistleblower lawsuits based on the opinion described above. Specifically citing the above decision, the Court granted whistleblower Troy Olbausen’s request to hear his case. The Court then vacated an Eleventh Circuit decision that dismissed Olhausen’s whistleblower lawsuit.
The Eleventh Circuit previously dismissed Olhausen’s suit against Arriva Medical because he could not prove that the defendants had knowledge of their submission of false claims in view of their objectively reasonable interpretation of the Medicare rules in question. The Supreme Court sent the case back to the Eleventh Circuit for further consideration based on its decision in Schuttte v. SuperValu, above [Olhausen v. Arriva Med., LLC, No. 22-374 (U.D. June 30, 2023)].
Likewise, on June 30, 2023, the Supreme Court sent a case back to the Fourth Circuit for further consideration in light of the Schutte case.
These actions make it clear that the new standard set by the Supreme Court in the Schutte case will make a difference in cases based on the federal False Claims Act. The Court said in the Schutte case:
“Both the text and the common law also point to what the defendant thought when submitting the false claim – not what the defendant may have thought after submitting it…As such, the focus is not, as respondents would have it, on post hoc interpretations that might have rendered their claims accurate. It is instead on what the defendant knew when presenting the claims…Culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.”
The Court also said:
“Under the FCA, petitioners may establish scienter by showing that respondents:
- actually knew that their reported prices were not their ‘usual and customary’ prices when they reported those prices;
- were aware of a substantial risk that their higher, retail prices were not their ‘usual and customary’ prices and intentionally avoided learning whether their reports were accurate, or
- were aware of such a substantial and unjustifiable risk but submitted the claims anyway…
If petitioners can make that showing, then it does not matter whether some other, objectively reasonable interpretation of ‘usual and customary’ would point to respondents’ higher prices. For scienter, it is enough if respondents believed that their claims were not accurate.”
Proving that providers submitted false claims just got tougher for enforcers.
See Ms. Hogue’s earlier report on this SCOTUS case in our June 7 edition: homecaretechreport.com/article/3587
©2023 Elizabeth E. Hogue, Esq. All rights reserved. No portion of this material may be reproduced in any form without the advance written permission of the author.
©2023 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Home Care Technology: The Rowan Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. editor@homecaretechreport.com
by Tim Rowan | May 17, 2023 | Admin, Regulatory
by Tim Rowan, Editor
T
he Department of Labor, Wage and Hour Division, has selected several southeastern states as targets for its investigation into a practice that appears to be quite common, underpaying in-home caregivers. It appears, based on early DoL reports, that some Home Care agency owners in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee either do not understand the law, or simply try to get away with it.
According to a mid-February, 2023 report:
“From 2020 to 2022, Wage and Hour Division investigators identified violations in nearly 89 percent of more than 1,200 home care and nursing care investigations. These reviews led the agency to recover more than $16.2 million in back wages and liquidated damages for more than 13,000 workers.
The department produced an instructional webinar on federal wage and hour regulations for home care, residential care and nursing care industry employers, workers and other stakeholders in the Southeast. “Caring For Those Who Care: Fair Labor Standards Act Requirements in the Care Industry,” is part of the DoL’s ongoing education and enforcement initiative to improve compliance in those states.
On October 13, 2022, the DoL published a Notice of Proposed Rulemaking to revise the Department’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act. The NPRM proposes to rescind the rule, Independent Contractor Status Under the Fair Labor Standards Act (2021 IC Rule), that was published in the closing days of the previous administration, January 7, 2021, and replace it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent. The Department believes that its proposed rule would reduce the risk that employees are misclassified as independent contractors, while providing added certainty for businesses that engage (or wish to engage) with individuals who are in business for themselves.
A DoL publication explained this targeted effort aligns with the agency’s initiative to protect essential workers in the Southeast. See an April 28 update on progress of the proposed rule here.
Writing for a Polsinelli Law firm bulletin, home care attorney Angelo Spinola stated, along with the caveat that this is not to be construed as legal advice, “The DOL is not required to give employers prior notice of an audit. In fact, WHD investigators often initiate unannounced investigations to observe normal business operations. As such, the best way to prepare for a DOL audit is to conduct regular and periodic internal audits of employment records and policies to ensure compliance with the FLSA. Internal audits typically include a review of exempt employee classifications, independent contractor classifications, payroll and time records, and FMLA and other leave law compliance. It is advisable to work with knowledgeable employment attorneys who can counsel employers on current wage and hour laws and best practices.”
Abuse Found to be Widespread
From 2020 to 2022, Wage and Hour Division investigators identified violations in nearly 89 percent of more than 1,200 home care and nursing care investigations. These reviews led the agency to recover more than $16.2 million in back wages and liquidated damages for more than 13,000 workers. In addition, the division assessed employers a total of $156,404 in civil money penalties. The February DoL report cited two recent North Carolina cases as examples of the practices it uncovered throughout the South:
Gentle Shepherd Care – which provides home healthcare services in the Charlotte area – failed to combine hours when employees worked at more than one of its locations during the same workweek. By doing so, the employer did not pay the affected workers their additional half-time premium rate for overtime for hours over 40 in a workweek. The Fair Labor Standards Act requires all hours worked in a workweek be combined when calculating wages, regardless of where employees performed the work. Back wages and liquidated damages recovered: $193,768 for 98 workers.
A separate investigation found Greenville”s At Home Personal Care paid employees straight-time rates for all hours worked, including hours over 40 in a workweek. By doing so, the employer did not pay the additional half-time premium rate for overtime as the FLSA requires. In addition, the employer failed to pay for travel time between the clients’ homes when the employees visited multiple clients during the same day. The agency also did not keep accurate records as required. Back wages and liquidated damages recovered: $187,148 for 28 workers.
North Carolina Wage and Hour Division District Director Richard Blaylock stated, “Workers who provide home healthcare services deserve to be paid every penny of their hard-earned wages as they care for our loved ones. When employers choose to ignore the law, they deny workers the wages they earned and need to support their families. Employers must use this investigation’s outcome as a reminder to review their pay practices to ensure they comply with the law.”
Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. The division also offers online resources for employers, such as a fact sheet on Fair Labor Standards Act wage laws overtime requirements. Workers who feel they may not be getting the wages they earned may contact a Wage and Hour Division representative in their state through a list and interactive online map on the agency’s website. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free. Learn more about Wage and Hour Division.