OIG Audit Reveals $100K+ Overpayments to HRS Home Health in Medicare Claims
A recent audit by the Office of Inspector General (OIG) identified overpayments exceeding $100,000 to HRS Home Health, a Lombard, Illinois-based for-profit home health agency, for Medicare services in 2020 and 2021. The audit was part of a broader examination focused on home health agencies' adherence to Medicare requirements amid a reported 7.7% improper payment error rate in 2023, equating to approximately $1.2 billion in erroneous payments across the industry.
HRS Home Health received $35 million from the Medicare Administrative Contractor, Palmetto GBA, for 18,422 claims during the two-year span. OIG’s review encompassed a random sample of 100 claims, totaling $227,528, assessing compliance with billing, coverage, medical necessity, and coding standards through independent medical review.
The audit revealed that 20 out of the 100 sampled claims were incorrectly billed, failing to meet Medicare’s billing, coding, plan-of-care, or skilled need criteria. In contrast, the remaining 80 claims complied with these requirements. OIG recommended HRS Home Health return the overpaid amount of $100,696 and advised the agency to conduct internal audits to identify additional overpayments and enhance documentation reviews to improve compliance.
While HRS Home Health agreed to repay seven claims, it disputed the total repayment demand, challenging the OIG’s use of extrapolation to determine the overpayment amount and disputing the statistical validity of the findings. Despite this, OIG maintains its recommendations, highlighting ongoing regulatory scrutiny of billing practices in the home health sector.
This case underscores the ongoing challenges faced by home health agencies in maintaining regulatory compliance amid heightened CMS oversight. With Medicare payments to home health agencies reaching $16 billion for services provided to nearly 2.8 million beneficiaries in 2023, ensuring accurate billing and adherence to coverage requirements remains critical. The audit reflects broader industry efforts to reduce improper payments and strengthen payer/provider compliance frameworks within Medicare's home health benefit program.