Home Health Audits: Your Comprehensive Guide for 2024

Preparing for Home Health Audits in 2024

In the past few years, there has been a heightened focus from the Centers for Medicare and Medicaid Services (CMS) on curbing inefficiencies and misconduct in the home health sector. The National Health Care Anti-Fraud Association (NHCAA) estimates Medicare and Medicaid fraud costs taxpayers over $300 billion annually, prompting increased audit activities by federal entities such as the Office of Inspector General (OIG).

Significant industry changes, especially in quality emphasis, have been driven by the Patient-Driven Groupings Model (PDGM). Now, the OIG, CMS, and government contractors are rigorously examining home health billing. Industry experts predict an expected rise in audit frequency in 2024, with non-compliance leading to serious repercussions such as service disruptions, penalties, and business loss.

Strategies for ensuring home health compliance

Navigating the dynamic landscape of the home-based care sector requires a thorough understanding of the various types of audits and their specific requirements. This guide, created specifically for home health professionals, zeroes in on the critical areas scrutinized by home health auditors. Utilizing our audit-ready compliance checklist, home health agencies can significantly enhance their compliance strategies and risk management practices, thereby avoiding hefty penalties imposed by the CMS. 

Understanding home health audits 

The most common type of home health audit is a claims review, in which auditors focus on two primary aspects: ensuring compliance with regulatory requirements, such as medical necessity and homebound status, and verifying the accuracy and appropriateness of the billing for the services provided. 

  1. Medical Necessity and Homebound Status:

    Robust documentation is crucial to validate the medical necessity of the services provided and to confirm the patient's homebound status, ensuring compliance. Documentation is key!

  2. Auditors will also scrutinize other critical areas, such as:

  1. Billing: Focus on ensuring accuracy and proper support for primary diagnosis codes from the patient's medical record. Aim to ensure accurate billing for services and identify any duplicate billing issues.
  2. Incentives to Referral Sources: Investigate any incentives given to referral sources. Confirm adherence to ethical standards and legal regulations.
  3. Billing for Non-homebound Patients: Verify that billed services are for patients who genuinely meet the homebound criteria. Ensure strict adherence to homebound status requirements.
  4. Improper Patient Solicitation: Examine the methods used for patient solicitation. Ensure ethical and compliant patient engagement practices.
  5. Primary Diagnosis Codes: Conduct detailed checking of diagnosis codes against the patient’s medical records. Confirm accuracy and proper documentation.
  6. M Items on the OASIS: Examine key M items on the OASIS. Assess the impact of coding adjustments on the patient’s case mix weight. 

    Proactive strategies for audit preparation 

Establishing an internal compliance team or hiring an outsourced consultant offers a proactive approach to preparing for audits. This practice ensures that an organization is reactive and preemptive in maintaining compliance standards. Key responsibilities and activities of this team include: 

  1. Regularly Reviewing and Updating Compliance Policies and Procedures: Staying current with changes in legislation and industry best practices is crucial. The team should consistently assess and revise the organization's compliance policies to align with these changes.

  2. Thoroughly Examining Documentation and Practices: Conduct a comprehensive review of all documentation, billing practices, and adherence to privacy policies. This ensures that documentation is complete, accurate, and compliant with regulatory requirements, including the correct application of billing codes and safeguarding patient privacy as per HIPAA and other relevant laws.

  3. Conducting Pre-billing Chart Reviews: Perform checks on patient records for completeness and accuracy, ensuring that the services billed correspond correctly to the services documented. This step is vital in preventing billing errors and potential fraud, which can lead to penalties or legal consequences.

  4. Creating a Culture of Compliance: Go beyond procedural checks to instill a culture of compliance throughout the organization. This involves providing ongoing education and training to the revenue cycle management (RCM) team and fostering an environment where adherence to standards is integral to daily operations, thus empowering staff to maintain compliance confidently.

Types of audits

Each type of home health audit has its specific focus and methodology. Agencies should familiarize themselves with the details of these audits and prepare accordingly. Here are some common audits that home health agencies might encounter:

  1. Targeted Probe & Educate (TPE) Program Audits: These audits involve reviewing a sample of claims, followed by one-on-one education to address any findings. The goal is to reduce claim denials and appeals through proactive education.

  2. Unified Program Integrity Contractor (UPIC) Audits: UPIC audits are comprehensive, involving a deep dive into billing practices to identify patterns that may indicate fraudulent activities. These audits can be particularly intensive, potentially including interviews and on-site visits.

  3. Recovery Audit Contractors (RAC) Audits: RACs review post-payment claims to detect and recover overpayments and underpayments. These audits are contingency-based, meaning RACs receive a percentage of the corrections they identify, incentivizing thorough and aggressive auditing.

  4. Comprehensive Error Rate Testing (CERT) Audits: The CERT program measures the accuracy of Medicare Fee-for-Service (FFS) payments. It involves randomly selecting a statistically valid sample of claims and reviewing them to ensure they were paid properly under Medicare coverage, coding, and billing rules. The results contribute to calculating the Medicare FFS improper payment rate.

Preparing for in-person audits

Navigating through in-person audits requires a strategic approach. Understanding the following key aspects can significantly aid in this process, leading to smoother audit processes and potentially better outcomes:

  1. Understanding the Audit Scope: Being clear about what the audit entails allows you to target your preparations specifically. Gather relevant documentation and information in advance. Carefully review the audit notification details and list out the specific areas that will be audited.

  2. Know Your Auditor: Understanding your auditor's background and the types of audits they commonly conduct can provide insights into their approach. This knowledge can help you tailor your preparations to meet their specific scrutiny.

  3. Review Previous Audits: Conducting a thorough review of past audit reports is essential in identifying recurring issues and areas needing improvement. Ensure that all recommended changes from previous audits have been effectively implemented.

How Prochant can help

Managing Revenue Cycle Management (RCM) in the home health sector often involves navigating a complex web of compliance, legislative updates, and workforce challenges, especially when contending with staff turnover and the need for specialized expertise.

Prochant steps in to address these challenges head-on. Partnering with us for your RCM needs not only streamlines your operations but also grants access to our depth of expertise in the home health field. Our team remains at the forefront of legislative and compliance standards, ensuring that your RCM processes are not just efficient but fully compliant with current regulations.

Our services extend beyond simple outsourcing; we serve as an integral extension of your team. Prochant's strategy combines the strength of a US-led global workforce with the agility of bench staff ready to quickly intervene as needed. This blend of resources, augmented by AI-driven analytics and tools, is tailored to ensure smooth operations, minimizing the disruptions often brought on by staffing challenges and manual workflows.

For a live demo or to learn more about Prochant's comprehensive RCM services, please contact our experts today.

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Prochant is the only AI-driven reimbursement service provider in the home-based care industry. We deliver focused revenue cycle management (RCM) solutions to healthcare providers with 7 wholly-owned global delivery centers. Our expertise lies in providing end-to-end RCM for home-based care, infusion, and specialty pharmacies, consistently delivering exceptional results to some of the leading healthcare providers in the country. We harness specialized automation technology and deep industry knowledge to streamline the time-consuming and expensive reimbursement process. As a result, we help healthcare providers accelerate their collections, increase revenue, and reduce operational costs while managing risk. Prochant is HITRUST certified, the gold standard for HIPAA security. For more information, please visit prochant.com.