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The government is monitoring your claims data. Are you?

Posted by Margaret Scavotto, JD, CHC on 1/9/18 7:05 AM

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Chemed Corporation, Vitas Hospice Services LLC, and Vitas Healthcare Corporation entered a $75 million settlement with the government to resolve false claims allegations. Vitas, the biggest for-profit provider of hospice services in the nation, allegedly “knowingly submitted or caused to be submitted false claims to Medicare for services to hospice patients who were not terminally ill” between 2002 and 2013. The DOJ also accused Vitas of awarding bonuses to employees based on the number of patients on hospice, regardless of need.

In addition, Vitas was accused of billing Medicare for continuous home care services that were not necessary, not provided, or did not meet Medicare requirements. Like with hospice services, Vitas allegedly set corporate goals for billing continuous home care services, regardless of patient need.

According to the Complaint, “Vitas regularly ignored concerns expressed by its own physicians and nurses regarding whether its hospice patients were receiving appropriate care.” Complaint, page 3. The Complaint also says the company’s own auditors knew of the problem – but changes were not made.

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Let’s look at the data

  • Between 2004 and 2011, between 4.42% and 5.25% of days of service were for crisis care. The national average was between 0.4% and 1.2%. Complaint page 17.
  • Between 2004 and 2011, Vitas’s net crisis care revenue was between 15.3% and 17.2% of total revenue. Nationwide, this number was between 1.6% and 1.8%. Complaint page 17.
  • Vitas’s crisis care billings were approximately six times the national average. Complaint page 17.

What did the government find when it looked beyond this suspicious data with a medical records review? Here are some of the cases cited in the Complaint:

  • Medicare was billed for crisis care for a patient who was not in crisis. In fact, she was playing bingo. Complaint page 21.
  • Crisis care was billed when only routine home care was provided. Complaint page 18-19.

Use your data

Data is an essential part of the government’s claims audit process. Data is how the government often finds potential false claims. Data can help YOU identify and prioritize risk areas that may be potential false claims. Data outliers do not equate false claims, but reveal high risk areas that should be reviewed.

Whether you have sophisticated EHR and a budget for big data crunching, or you use paper records and are on a shoestring budget, use the data you have. What are your industry’s biggest risks? What types of false claims has the government found in other providers? What or where is the government enforcement focus? What are your organization’s weak points? If you need help getting started, look at your PEPPER report.

PEPPER can help

Providers seeking to audit their own data for potentially troubling trends can find a friend in PEPPER: the Program for Evaluating Payment Patterns Electronic Report.  Available at, the PEPPER report provides comparative data in certain high-risk metrics for many providers, including hospices, critical access hospitals, and SNFs. PEPPER is a Medicare Part A claims data report that compares your facility to state, national and MAC or FI jurisdiction data. PEPPER includes this comparative data for multiple Target Areas. For example, the SNF PEPPER addresses five Target Areas:

  • Therapy RUGs with High ADL
  • Nontherapy RUGs with High ADL
  • Change of Therapy Assessment
  • Ultrahigh Therapy RUGs
  • 90+ Day Episodes of Care

To download your PEPPER, the Compliance Officer, CEO, President or Administrator needs to visit the PEPPER Resources Portal. If you need help, review the Secure PEPPER Access Guide.

Why PEPPER matters

Your PEPPER report can help you compare your facility to other providers, and determine whether you have been identified as an outlier at risk for improper payments. PEPPER considers a provider to be an outlier if its Target Areas are at or above the 80th percentile, or at or below the 20th percentile, depending on the area. If your PEPPER shows you are an outlier, an internal audit should be conducted to identify any improper payments or non-compliant practices. CMS is quick to point out that variances from the national data do not necessarily mean billing irregularities have occurred. However, it would be wise to know whether there is a reason why the government has identified you as an outlier.

In other words, the government is mining your data and evaluating your claims—and so should you. By incorporating PEPPER data into your compliance auditing strategy, you can identify potential areas of non-compliance that could make you a government target. And of course, a "good" PEPPER should not give you false confidence about your claims - it is a good practice to conduct documentation reviews to ensure claims are appropriate, even if you aren't an outlier.

How to use your data

Once you identify your high risk areas and data sources, it’s time to map out a compliance auditing and monitoring plan:

  1. Decide who will track the data.
  2. Track data monthly or quarterly.
  3. Identify any trends or variances from established norms.
  4. Trends/variances should trigger a medical record review.
  5. Even if your data is in line with norms, perform a sample medical record review for high risk areas (like those in the PEPPER report).
  6. Report findings to the Compliance Committee and Board.
  7. Keep auditing.

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Are you an outlier? Download  MPA's Guide to  PEPPER Reports  to find out


Topics: Penalties and Enforcement, PEPPER, Auditing and Monitoring, Billing and Claims Submission

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