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Discharge planners beware: According to a draft report recently obtained by Hospital Case Management from the Department of Health and Human Services’ Office of the Inspector General (OIG), federal investigators will begin carefully scrutinizing patient referrals to hospital-owned home health agencies.
The report, sent on June 30 to Bruce Vladeck, director of the Baltimore-based Health Care Financing Administration (HCFA), alleges that some case managers abuse their discharge planning powers over patients, denying Medicare beneficiaries the freedom to choose a home health agency other than the one the hospital owns.
The report comes at a time when federal investigators have been cracking down sharply on home health agencies in light of alleged fraud and abuse on the part of the Nashville, TN-based Columbia/HCA hospital chain. OIG and the Department of Justice currently are investigating whether home health providers owned by Columbia were encouraged to maximize utilization of their services to increase the amount of allocations to their parent hospitals.
Many have inferred from the investigation that Columbia hospitals that owned home care units were pressured to make referrals exclusively to agencies they owned, thereby violating federal antitrust laws. If OIG investigators determine that wrongdoing has occurred, it could mean fines of $25,000 per case and even possible jail time for you. (See related story on federal regulations, p. 196.)
Now, OIG seems poised to extend its inquiries beyond Columbia to all hospitals that own home health agencies. It’s a trend that worries many, especially considering where the allegations are coming from, says Cathy Frasca, RN, BSN, FACHCA, vice president of home health services at South Hills Health System in Homestead, PA.
"There have been a few people from freestanding agencies that have made big noises about this [issue] because, with managed care, they’re being dealt out of the picture," Frasca says. "They don’t have a contract with the managed care companies, and they’re crying foul at the hospital-based agencies. And this is ridiculous."
She adds that, as managed care penetration increases and hospitals evolve into integrated delivery systems, managed care contracts will become the key to home health referrals. "The fact is that any home health agency that expects to survive in the future must become part of the health care continuum. They must have an arrangement with area hospitals. It just doesn’t make any sense to go it alone in these days and times."
OIG’s draft report focuses largely on the results of an agency-conducted survey of 1,000 discharge planners across the country. According to the study, "62% of patients discharged from hospitals that owned a home health agency were referred to an agency owned by the hospital."
The report may however, be more significant for what it leaves out, experts say. For example, a total of 4,820 claims were extracted and divided into two strata: the five states already targeted in the OIG’s sweeping Operation Restore Trust (ORT) fraud initiative (California, Florida, Illinois, New York, and Texas), and all other states. The random selection of beneficiaries broke out as "750 from the ORT strata and 250 from all others."
In other words, the survey, which draws conclusions about the state of home health referrals across the country, focuses on states already under intense scrutiny for fraudulent health care practices.
The OIG report found that 38% of beneficiaries who went to hospital-owned home health agencies reported that "the hospital just sent home care people" to them. In contrast, the report says, "only 24% of the recipients of home health services, which were independent of their discharge planning, reported this." And "recipients of hospital-owned services were less likely to indicate that they had some form of input into the choice of a home care agency."
But the report goes on to say, "Because of the relatively small sample size, we cannot demonstrate that the differences discussed above are statistically significant. However, the trend they point to is consistent with a number of other related survey respondent trends."
Even so, out of 630 questionnaires received, only four attached written orders that "contained language which strongly encouraged the promotion of hospital-owned HHAs in the discharge process. One of these even included a hospital policy that reads, "Referrals leaving the [hospital-owned] system = $$$ leaving the system."
Again, that’s one out of 630 questionnaires received from discharge planners.
The report also found that "discharge planners report giving adequate choice"; "beneficiaries who go to hospital-owned nursing homes and home health agencies report better continuity of care"; "beneficiaries who went to hospital-owned home health agencies are more likely to report having been discharged at the right time"; and, "beneficiaries who went to hospital-owned home health agencies are more likely to report that the connection between their care providers was very good."
Frasca contends that a 62% rate of referral to hospital-owned home health agencies does not necessarily indicate any impropriety. Indeed, of hospitals that maintain a lower percentage, she says, "shame on [them] that patients don’t want to use their home health agency just as they would use their hospital-based skilled nursing facility, their hospital-based ambulatory care center, or the hospital-based surgi-center."
Janice Zimmer, RN, manager of care coordination at the Children’s Hospital of Pittsburgh, adds that patient choice itself is often complicated, and limited, by managed care. "The first thing we do is check the third-party payer," she says, "because some of them have preferred agencies, and some of those are exclusive. So even though people are given the indication that they have choice, sometimes they really don’t, if there’s going to be any coverage. If you’re going to have no coverage if you choose this [home health agency] over here, but your coverage is going to cover another one completely, what are you going to pick?"
Frasca notes that physicians, who often have their own managed care contracts, also play a role in determining where patients are referred for home care. "It is the physician and the payer who primarily control where the patient is going to be served and reimbursed for their services," she says. "And under managed care, patient choice is limited to what payer they choose and, in many instances, where the physician refers them." (See related story on patient choice, p. 195.)
Barbara Bernardi, RN, BSN, MBA, an administrator at Jameson Visiting Nurses Association of Lawrence County, PA, sees the report as further evidence of "an effort to limit utilization, an effort to drive hospitals out of the home care market by insinuating there’s some kind of fraud. I know there are some hospitals that abuse that [provider choice], but sometimes it’s an [attitude] of should we take care of the patient when we know we’re the better provider? Yes, we want to offer provider choice, but we know we’re the best, so why would we refer to another?’"
The report’s recommendations are telling. It recommends only that HCFA ensure that hospitals provide patients with a list of other home health providers in the area; provide a list of home health agencies they own; and disclose the information to HCFA.
"Any hospital that does not at least share information with the patient that there are other home health agencies in the area is remiss," Frasca says. "And I would say that most credible hospitals do this. The irony of it, though, is that hospitals do not have to share information regarding where the other ambulatory care centers are. There’s a whole list of other services that are utilized within a hospital system."
[For more information, contact:
Barbara Bernardi, RN, BSN, MBA, administrator, Jameson Visiting Nurses Association, 1211 Wilmington Ave., Newcastle, PA 16105. Telephone: (412) 656-4249.
Cathy Frasca, RN, BSN, FACHCA, vice president, home health services, South Hills Health System, Homestead, PA.
Janice Zimmer, RN, manager of care coordination at the Children’s Hospital of Pittsburgh, 3705 Fifth Ave., Pittsburgh, PA 15213. Telephone: (412) 692-6021.]