Supplemental Medical Review Contractor's Plan to Audit All Home Health Health Agencies

The Affordable Care Act (ACA) requires that physicians (and their counterparts) who certify Medicare beneficiaries as eligible for home health services document their face-to-face encounters. In order for payments to be rendered, physicians must prove that these face-to-face encounters actually occurred. In order to validate compliance with this condition, the Office of Inspector General (OIG) conducted a study in 2014 and recently released its findings. The study found limited compliance with Medicare’s Home Health face-to-face requirement. Additionally, the study found that for 32% of Home Health Agency (HHA) claims that required face-to-face encounters, documentation failed to meet Medicare documentation requirements. The 32% of claims that failed Medicare’s requirements resulted in an estimated $2 billion in payments that should have not been made to HHAs. Because of the significant findings of this study, the OIG recommended to the Centers for Medicare & Medicaid Services (CMS) that: 1) they consider requiring a standardized form to ensure that physicians include all elements required for face-to-face documentation; 2) they develop a specific strategy to communicate directly with physicians requiring the face-to-face requirement; and 3) they develop other oversight mechanisms for this specific requirement. CMS concurred with all three of these recommendations and, furthermore, implemented an oversight plan of HHAs that included a new contractor to ensure program integrity called Supplemental Medical Review Contractor (SMRC). 

In 2013 CMS contracted with Strategic Health Solutions, a SMRC, to conduct a nationwide medical review with respect to Medicare Part A, Part B, and Durable Medical Equipment (DME) providers and suppliers. The SMRC was created to perform medical reviews and lower the improper payment rates. The OIG identified that since 2010 there have been almost $1 billion in improper and fraudulent Medicare payments to HHAs. CMS’ response to this was to designate all HHAs formed since 2010 as high risk providers, ultimately targeting them for investigation of fraud, waste, and abuse by all auditors, including the SMRC. Strategic Health Solutions completed its first phase of auditing having reviewed 41,513 HHA claims, and plans to audit every HHA in the country within the next year. Additionally, Strategic Health Solutions is also working on other projects including conducting post payment medical reviews of outpatient rehabilitation therapy services, as well as some DME equipment, including oxygen equipment.

To effectively prepare for an audit, all HHAs should be taking a proactive approach to implement and manage compliance within their organizations. Elements of implementing and managing compliance should include: maintaining an effective compliance program, implementing measures to educate staff as well as physicians on proper documentation and documentation requirements, and ensuring meaningful and consistent monthly meetings to review all of the organizations Medicare claims before the claims are submitted to Medicare.



Strategic Health Solutions