How the OIG’s plan to evaluate ‘home health agency profitability’ could hurt YOUR bottom line.

By now, everyone’s had a chance to check out the home health items the HHS Office of Inspector General will tackle in its 2010 Work plan. So what now? Attorney Robert Markette has some self-audit action items for you in his Home Care Law Blog.

Here are 5 highlights …

Action #1 — Audit your cost reports. Alarmingly, the OIG says it will move out of its compliance focus to evaluate cost report data for ‘home health agency profitability.’ “OIG does not make clear what level of profitability it will find to be acceptable,” Markette notes.

“If OIG sees what it thinks are unacceptable profits, it will add its voice to MedPAC’s cry to reduce excessive profitability by reducing rates,” Markette predicts. ”It won’t matter if the assessment is based upon flawed cost report data” — and a large percent of cost report data is.

Experts recommend cost report best practices here.

Action #2 — Check to make sure your DSMT patients meet the conditions of coverage, including quality standards, Markette recommends. The OIG is concerned about high utilization of Diabetes Self-Management Training Services.

Action #3 — Audit for services that both Medicare and Medicaid paid for. The OIG says it’s looking to make sure states have controls that prevent both Medicare and Medicaid paying for the same service, but regulators could contact agencies as well, Markette predicts. “At a minimum, somebody owes the government a payback,” he says.

Action #4 — If you’re not yet auditing your HHRG coding, start now to make sure “the clinical record supports the codes you use,” Markette suggests. “Not only is upcoding a problem for individual agencies (fraud, false claims, etc.), but if OIG sees a ‘trend’, you can count on more reductions,” he explains.

Action #5 — Remember your self-audit best practices. Here’s where we remind you to correct any problems you find in your self-assessment, and document the steps you took.