On April 10, 2014, the Department of Health and Human Services Office of Inspector General (“OIG”) released a Report, titled “Limited Compliance With Medicare’s Home Health Face-to-Face Documentation Requirements,” finding that “for 32 percent of home health claims that required face-to-face encounters, the documentation did not meet Medicare requirements, resulting in $2 billion in payment that should not have been made.”

In the Report, OIG included comments and explanations of the four requirements under 42 C.F.R. §424.22 that Medicare beneficiaries must meet to qualify for home health services: 1) be homebound; 2) need intermittent skilled nursing care, physical therapy or speech therapy; 3) be under the care of a physician; and 4) be under a plan of care that has been established and periodically reviewed by a physician.  Moreover, the Report provides instructions on the proper documentation of the face-to-face encounter between a physician and a patient that is a condition of Medicare payment.  This encounter must be related to the primary reason the beneficiary needs home healthcare and must occur within 90 days prior to the start of care or within 30 days after the start of care.  Of note, OIG specified that “the existence of an evaluation and management (“E&M”) claim does not fulfill the face-to-face requirement.”

So far, the Centers for Medicare and Medicaid (“CMS”) oversight of the face-to-face encounters has been minimal.  In its Report, therefore, OIG recommended that CMS should: 1) consider requiring a standardized form that physicians include all elements required for the face-to-face documentation; 2) develop a specific strategy to communicate directly with physicians about the face-to-face requirement; and 3) develop other oversight mechanisms for the face-to face requirement.
A letter from CMS Administrator Marilyn Tavenner, included as Appendix C, provides that CMS agrees with OIG’s recommendations and the agency plans to issue additional educational materials to providers on the documentation requirement, as well as implement an oversight strategy through the Supplemental Medical Review Contractor (“SMRC”).  According to Tavenner’s letter, “The SMRC will perform approximately five document-only reviews for every HHA in the country to validate that the most recent/valid face-to-face encounter is in the medical record.”

Finally, in the section titled “Related Office of Inspector General Work,” the OIG added that in 2012 it found “HHAs submitted 22 percent of claims in error because services were not medically necessary or claims were coded inaccurately, resulting in $432 million in improper Medicare payments.”  As a result, OIG recommended further investigations beyond the medical record review.  Additionally, OIG proposed that CMS identify all HHAs that have failed to submit Outcome and Assessment Information Set (“OASIS”) data, which are the basis for home health payments, quality assessments, and information for consumers, and apply a two percent reduction to them.

Read the Report.