Inspectors find Texas Medicare billing has biggest potential for fraud

The nation's top health care inspector is calling for a Medicare moratorium on new home health care agencies in Texas, where the largest number of companies are filing dubious claims, according to a report obtained by the Houston Chronicle.

Nearly 40 percent of all home health care agencies or HHAs with suspicious billings came from Texas, according to the latest findings from the U.S. Health and Human Services Office of Inspector General.

The review represents more woes for a state heavily dependent on Medicare dollars and already mired in some of the most exhaustive health care criminal investigations and indictments in its history.

Florida ranked second with 25 percent of its home health care agencies filing questionable claims, prompting the HHS Inspector General, Daniel R. Levinson, to call on the Centers for Medicare and Medicaid Services (CMS) to consider capping the number of agencies allowed to bill Medicare.

"Florida and Texas each had a high number of (agencies) with questionable billings in 2010," states the report, scheduled to be released Thursday. "CMS should consider imposing a temporary enrollment moratorium on HHAs in these states."

For 2011, Medicare paid Texas home health care agencies $3.1 billion, according to Medicare payment data obtained by the Chronicle. Of that, $377 million went to 370 Houston companies.

Acting Medicare Administrator Marilyn Tavenner, in a response to Levinson, agreed with the call for a limit on the number of agencies permitted to bill the nation's largest insurer for the elderly and indicated it was in the process of putting such a measure in place.

"CMS ... is also carefully assessing the geographic area to which moratoria will apply," Tavenner said in her reply.

More Information Other findings from the report 1Medicare overpaid $4.8 million in 2010 for home health care because dates for the claims overlapped claims for stays in hospitals or nursing homes. 1More than 1,000 claims showed home health service occurred after the Medicare beneficiary's death, resulting in $208,311 in overpayments.

The HHS OIG report cited a Houston case last year as evidence of the potential for fraud.

In a September 2011 indictment, Jodi Latson, operator of Health Pro Resources, was charged with others in a $62 million billing scheme. She is accused of selling Medicare beneficiary information to 100 different Houston-area home health care agencies in exchange for illegal payments.

The home health agencies involved then used the beneficiary information to bill Medicare for services that were unnecessary or never provided.

OIG zeroed in on 6.8 million Medicare claims filed in 2010 by 10,031 home health agencies across the country. They found 80 percent of those with questionable billings were located in four states - Michigan, Florida, California and Texas.

The claims stood out because they included too many visits by health care workers, or they included patients already getting Medicare health care coverage from another company, or the company was trying to bill many more therapy visits than allowed.

None of those four states require home health care agencies to prove there is a need for their services, before setting up operations - something other states use to establish whether the companies provide legitimate services.

While it is not known if any or all of the home health care companies in Texas filing "questionable" claims are engaged in fraud, HHS OIG investigators typically believe "questionable" means potential fraud exists.

The Texas Association for Home Care & Hospice's executive director, Rachel Hammon said her members are committed to preventing health care fraud in Texas.

"TAHC&H promotes adherence to ethical practices, regulations and comprehensive integrity programs that contribute to quality and affordable home health services for patients and taxpayers," she said, in response to the report.

Hammon also said that if Medicare officials follow through with a moratorium, it should be a temporary one.

"Any potential moratorium should be temporary and last only until regulators fully implement the already available tools to combat fraud that do not disrupt patient service," she said.

terri.langford@chron.com twitter.com/tlangford