PRESIDENT CLINTON UNVEILS NEW WEAPONS TO FIGHT FRAUD IN HOME HEALTH CARE

Today, President Clinton added three new weapons to the anti-fraud arsenal to combat fraud and abuse in the home health industry. The President announced: (1) an immediate moratorium on all new home health providers coming into the Medicare program; (2) a new renewal process for home health agencies currently in the program; and (3) a doubling of audits that will help weed out bad apple providers. These actions are consistent with recommendations by the Inspector General at the Department of Health and Human Services following a recent report on fraud in the home health care industry.

DECLARING A FIRST EVER MORATORIUM TO STOP HOME HEALTH PROVIDERS FROM ENTERING THE PROGRAM. The moratorium will give the Administration the opportunity to implement new regulations to provide better safeguards and protections to screen out problem home health providers. This action is consistent with strong evidence that the best way to stop fraud and abuse in our Medicare program is to prevent bad apple providers from ever entering the program. Home health care is the most rapidly expanding part of Medicare, with nearly 100 new home health providers entering Medicare each month. This moratorium -- which will authorize the Department to grant exceptions for areas of the country with no access to home health services -- will be in place about six months until a new regulation. It will enable HHS to implement regulations to prevent risky providers including:

- Posting surety bonds of at least $50,000: Home health agencies will be required to post surety bonds of at least $50,000 before they can enroll or re-enroll in Medicare. Surety bonds have proved to be an effective way to prevent bad apple providers from entering Florida's Medicaid program;

- Requiring a minimum number of patients prior to seeking Medicare enrollment: This will require home health agencies to establish an agency's experience in the industry before serving Medicare enrollees; and

- Targeting home health agencies more likely to abuse Medicare: This regulation will require home health agencies to submit detailed information about all of the businesses they own. This will ensure they do not use shaky financial transactions to exploit Medicare, such as preventing billing through companies that do not exist or are unauthorized to bill Medicare for services. This loophole allowed one home health agency in Georgia to defraud Medicare of $16.5 million before being found and convicted.

IMPOSING TOUGH NEW STANDARDS ON HOME HEALTH AGENCIES THROUGH A NEW REENROLLMENT PROCESS. Under this new rule, HCFA will re-enroll home health providers every three years. Home health agencies will be required to submit an independent audit of its records and practices at the time of re-enrollment. The new regulations HHS will implement during the moratorium will apply to all home health agencies -- making it easier to kick out fly-by-night operators who are more likely to cheat Medicare. Currently, HCFA can kick providers out of Medicare only of they have been convicted of fraud.

DOUBLING THE NUMBER OF AUDITS AND INCREASING CLAIMS REVIEWS TO WEED OUT BAD APPLE PROVIDERS. HCFA will nearly double the number of comprehensive home health agency audits it performs each year -- from approximately 900 to 1800. They will also increase the number of claims reviews by 25 percent from 200,000 to 250,000. This increased oversight will build on HHS efforts already underway to increase investigations, prosecutions, and audits under Operation Restore Trust, the Department's comprehensive initiative.