May 13,2010

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Scott Mulhauser/Erin Shields (Baucus)
Jill Gerber (Grassley)
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Baucus, Grassley Question For-Profit Home Health Agencies on Relationship Between Operating Procedures and Reimbursements

Finance leaders begin investigation after data suggests agencies intentionally increased the frequency of home health visits to trigger higher reimbursement rates

Washington, DCSenate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) today sent a letter to the four largest for-profit home health care agencies, asking questions about the relationship between the number of home health therapy visits they provided and the Medicare reimbursement rate for those visits.  The Senators’ letters come after a recent Wall Street Journal analysis, which found that as the Medicare reimbursement rate for home health care changed, companies changed their business practices to achieve higher reimbursements.  

Baucus and Grassley also questioned the companies regarding their promotional material, after the Committee obtained a patient questionnaire that appeared to be designed to help the company target Medicare patients for which it could be reimbursed.     

“Too many Americans count on Medicare to provide quality health care to allow the program to be manipulated for somebody else’s profit,” Baucus said.  “If for-profit companies want to work with the Medicare program, we have to hold them to a very high standard.  Companies that work with Medicare should not be allowed to target seniors just because they have Medicare or adjust the way they care for patients simply to increase profits.  I intend to closely review the practices of these and all companies working with the Medicare program to stop fraud, waste and abuse and ensure every dollar is used appropriately.”

“Every dollar wasted is taken away from Medicare beneficiaries,” Grassley said.  “We need to make sure care is provided based on patients’ best interests, not profit margins.  So far, it appears that either the home health care reimbursement policy is flawed, some companies are gaming the system, or both.   As the Senate committee of jurisdiction, we’re working to figure out what’s going on.”

The Senators asked Amedisys, Almost Family, Inc., Gentiva Health Services, Inc., and the LHC Group, Inc. to answer questions related to their internal policies and guidelines regarding the number of visits provided to each patient, after data indicated a connection between the number of visits and the rate of reimbursement.  According to the Journal’s analysis, after Medicare rates increased for patients receiving more than nine visits, the number of Amedisys patients who received 10 visits was three times the number of patients who received nine visits.  Baucus and Grassley also asked the companies about changes to their policies following changes to Medicare reimbursement rates in 2008, changes that were described by both the Journal’s data and a March 2010 analysis by the Medicare Payment Advisory Commission (MedPAC).  When the basis for Medicare payments shifted to 6, 14 or 20 visits, Amedisys patients getting 10 visits dropped by 50 percent, patients getting 14 visits rose 33 percent, and patients getting 20 visits increased 41 percent. 

The Senators also asked the companies to provide marketing materials and guidelines for patients and physicians as well as the clinical criteria used in developing those materials.  The Senators expressed concern that these companies were using marketing tactics to target seniors 65 years old and older so the companies could take advantage of Medicare payments to improve profits.  

The full text of the Senators’ letters to the agencies is available in the printer-friendly version of this release and the related files section of this page.