Miami Herald - October 8, 2008
Jay Weaver, jweaver@MiamiHerald.com

Suspecting widespread fraud, Medicare has suspended payments to Miami-Dade County's top 10 home healthcare agencies and ordered all local home healthcare providers to reapply to the federal insurance program.

After potentially losing hundreds of millions to fraud, Medicare officials launched the offensive this month, targeting suspicious claims -- mostly for treating diabetic patients at home.

Medicare's regulatory crackdown in Miami-Dade -- a first of its kind in the country -- follows a series of Miami Herald articles that exposed billions of dollars in similar Medicare fraud in South Florida. Miami-Dade is widely considered the Medicare fraud capital of the nation.

Since last year, Medicare officials have been acutely aware of billing irregularities in Miami-Dade's estimated $1.3 billion home healthcare industry. That total represents a 1,300 percent spike in billings over the last five years -- about 20 times higher than the national rate.

Medicare's suspension of payments to the 10 agencies, which received more than $100 million from the federal program last year, will immediately affect services such as skilled nursing visits for about 6,500 elderly and disabled patients. Some, however, are suspected of being illegitimate Medicare beneficiaries receiving kickbacks from the local agencies.

Some legitimate patients with medically necessary services will have to be transferred to other agencies, officials said.

The suspensions could last from six months to a year as Medicare's auditors review claims dating back to 2004. The list of agencies could also grow over the course of the audits. Medicare would not identify the targeted 10 healthcare agencies, citing privacy issues.

"We wanted to focus on these top 10 because this is where the greatest vulnerability in the program is," Kimberly Brandt, Medicare's director of program integrity, said Tuesday. "These are so outside the norm."

Medicare officials said that home healthcare agencies in other metropolitan areas, such as Dallas and Los Angeles, have generated their share of questionable claims -- but they don't come close to the depth of the problem in Miami-Dade.

NO OTHER COUNTY

No other county in Florida or the nation has experienced such a phenomenon, officials said. "I think it is clear that the situation in Miami-Dade is very different from our other 66 counties -- even when you compare it to Broward," said Jeff Gregg, a senior regulatory official at the Florida Agency for Health Care Administration, which issues licenses for Medicare and Medicaid home healthcare agencies.

"I would have to attribute a lot of this activity to fraud," he said, "to extract money from the system."

But it took months for Medicare to adopt an anti-fraud policy -- including audits of major home healthcare agencies and re-enrollment of all 334 certified agencies in Miami-Dade -- because officials said the program was hamstrung by a lack of resources.

Brandt said Medicare was too busy with two other major areas of fraud in Miami-Dade -- medical equipment suppliers and HIV therapy clinics -- to investigate the home healthcare field. The Miami Herald reported in a series of articles published since August that those two areas of Medicare fraud alone totaled at least $2.5 billion yearly in Miami-Dade. Home healthcare could account for hundreds of millions in additional fraudulent claims, Brandt said.

The Miami Herald has learned that among those on the list is Las Mercedes Home Care on Coral Way in Miami, which confirmed it received a payment suspension letter from Medicare on Tuesday. Administrator Francis J. Trullenque defended his company's medical and business standards, saying physicians are ultimately responsible for determining whether patients need referrals to Las Mercedes.

"I would say the vast majority of patients that we care for need that service," said Trullenque, who declined to comment about Medicare's letter.

SUSPENSIONS

Las Mercedes and the nine other home healthcare agencies were hit with suspensions because at least two-thirds of their Medicare payments stem from claims for treating patients at home for more than 60 days. These are called "outlier" patients, and most have been diagnosed with diabetes.

As part of a parallel investigation, Medicare inspectors have been visiting patients' homes in recent months to determine whether they truly require skilled agency nurses to inject their insulin or whether they can inject themselves. The inspectors are trying to determine whether the home healthcare services are justified.

Medicare, which has operated essentially on an honor system since it was adopted by Congress in 1965, has been frustrated by the soaring, long-term home healthcare costs in Miami-Dade. By law, Medicare can impose a cap on outlier claims only if the average of all home healthcare payments nationwide exceeds 5 percent. That has never happened.

Among Miami-Dade's 10 targeted home healthcare agencies, outlier claims account for 65 to 80 percent of their total Medicare reimbursements.

As part of Medicare's latest effort, officials will have more flexibility in reviewing and blocking payments to Miami-Dade agencies with a high percentage of long-term patients -- but they cannot impose the 5 percent cap on any one agency without approval from Congress or the Executive Office of Management and Budget, said Brandt, the program integrity director.

"That's still very much the case," she said.

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