Home Health Billing Fraud Study

Home Health Billing Fraud Study Sheds Light on Growing Problem

Providers who outsource home health billing see multiple benefits, but one of the most important is access to a tool in navigating home health billing fraud. 

Healthcare billing fraud is a pressing problem, and a recent study out of Dartmouth’s Geisel School of Medicine offers a deeper understanding of how home health billing fraud has spread in recent years [1]. 

Types of Billing Fraud
To best understand the results of the survey, it’s important to first understand the type of home health care billing fraud you might encounter [2]. 

Fraud in Billing for Non-Existent Services
This is one of the most common types of fraud to look out for. In this case, services are billed but never performed. It can involve extra services being added to a legitimate patient bill or a situation that is more extreme, where someone finds a patient’s name and insurance information and uses this to create a fraudulent bill with services that were never performed. 

Medical Necessity
Another common type of fraud involves a party billing for services that weren’t medically necessary. For example, a diagnosis code like hypertension or diabetes that might not justify home health care services. 

In home health billing, there are some services that are often performed together that should also be billed together. In some cases, charging for these services separately can result in higher rates of reimbursement. By breaking them up, a billing party can receive higher payments. 

Durable Medical Equipment
Durable medical equipment (DME) is also an area that’s at risk for billing fraud. This can include examples like orthotics, patient lifts, walkers, glucose meters, traction equipment, pressure mattresses, and crutches. 

Upcoding Billing Issues
This type of fraud is a misrepresentation of services where a provider falsifies a claim to get paid for services that reimburse at a higher rate. 

Home Health Care Billing Fraud Study Results
The Dartmouth study took on the work of examining the network structure of home health agencies (HHAs) to identify a set of characteristics that were shared across the regions where fraud was most common. These characteristics included: 

  • Sharing patients across multiple agencies
  • Higher rates of expenditures across hospital referral regions along with fast increases in rates
  • Significant growth in the number of HHAS
  • Whether or not a region attracted a Department of Justice anti-fraud office

There was also a peer effect between local agency billing, which suggested sharing fraudulent practices between these local agencies. 

Types of Fraudulent Behavior
The study documented the most common types of fraudulent behavior, including:

  • Owners of agencies billing for services that were unnecessary or nonexistent
  • Physician kickbacks
  • Recruiting for patients
  • Staffing groups that got patients referred to an agency
  • Cross-network sharing of patient IDs in HHAs owned by organized crime

Activity Has Been Increasing
The researchers found a notable increase in home health care activity over the period between 2002 and 2009 which corresponded with expenditures doubling from $14.9 billion to $33.7 billion. This increase was mostly concentrated in just a few hospital referral regions (HRRs) which supported their findings that the regions were also areas where the Department of Justice had set up local anti-fraud offices. 

As an example, the average home health care billing per enrollee (Medicare) in Miami, FL and McAllen, TX increased by $2,422 and $2,127 respectively. In other HRRs where the DOJ wasn’t targeting, the average increase was $289. Study Lead Author, James O’Malley explains the difference in expansion rates, “it more or less makes the argument that if the benefits exceed the risks in the eyes of the perpetrators, then it’s more likely that you’ll see this type of fraudulent behavior where people are willing to risk conviction, fines, and imprisonment to make larger profits.”

While the study stands on its own, one additional outcome has been the development of tools that could be useful in the future in identifying more issues of home health billing fraud. The index (BMIX) looks promising in predicting excessive billing behavior from HHAs in the future. This means that it could be valuable for approaches based on machine learning to address billing fraud. The study authors expressed excitement at the idea of the methods being used to create generalized and alternative versions for organizations responsible for policing billing in healthcare. They look forward to the chance that the tools might be used to prosecute more violators, earlier, before fraud escalates, potentially saving the healthcare system and tax payers money. 

If you’re looking for ways to build an approach to home health billing that removes some of the internal and local risk of fraud, outsourcing should be on your short list of considerations. Outsourcing can be a path to end-to-end monitoring of your billing processes, increased efficiency, and easier response to a fast-changing regulatory environment. To learn more about how our services align with your needs, contact us today

[1] O’Malley, et al., “The diffusion of health care fraud: A bipartite network analysis,” Social Science & Medicine, 2023.
[2] Law Offices Of Robert David Malove, “Types of Healthcare Billing Fraud,” 2023. Available: https://www.robertmalovelaw.com/library/types-of-healthcare-billing-fraud-.cfm.

Hospital Billing Outsource Strategy

Changed Your Service Lines? It’s Time to Rethink Your Hospital Billing Outsource Strategy

In the wake of COVID, budget crunches, and labor shortages, many hospitals and health systems have been making the smart decision to rethink their service lines. But what many haven’t had the space to consider is the impact on hospital billing, hospital coding, and how their decisions should impact outsourcing strategy. 

If you are a billing or coding leader in a hospital, it’s time to review your approach to outsourcing to determine whether you have an opportunity to make changes that will positively impact your profitability as well as patient and employee experiences. 

Why Service Lines Are Volatile Today
Hospitals have lost billions in recent years, resulting in threats of service line closures and even systemic collapse without support. 

One hospital, Main Line Health, saw its expense per admission jump by 26% – significantly more than their revenue per admission, which was only increasing by 14% per admission. While they had budgeted for a $6 million loss, they actually lost $20 million. Hospitals that have seen issues like these have been closing services like obstetrics, leaving mothers who were ready to deliver facing a three-hour drive to find a hospital [1]. In 2022, hospitals cut services including obstetrics, converted pediatric units to ICU, closed emergency departments, inpatient care at a Children’s hospital, behavioral health services, at least one even temporarily closed an ICU [2].

Why Evaluating Service Lines is Important to Hospital Billing
Service lines are groups or populations of patients with similar traits based on encounter attributes. This includes DRGs, ICD groups, HCPCS codes, inpatient or outpatient status, and MDCs. Planning service lines is a way of evaluating the performance of a hospital or health system, where patients are engaging with multiple departments during a visit. By focusing on service lines, hospital leaders can gain deeper insights into the contribution that each line is making to the organization’s financial health as well as community well-being. 

Consider that, in cases where a hospital is only providing services that are highly profitable, they might not be best serving their community. And if they’re only providing the services that the community prefers, they might not be meeting the long-term health needs or supporting the health of the organization. This type of question has caused hospital leadership to change their approach to service lines in recent years. But the questions can’t stop there. 

When service lines shift, finances and revenue cycle are impacted. Every change to a service line can impact stakeholder groups including patients, providers, and other administrative departments, but especially hospital coding and billing. Hospital billing leaders must also ask whether they’re receiving appropriate and market-comparable reimbursement from all payer types, including employers, managed care, and government. 

How to Offer or Cut New Service Lines
When an organization is considering changing service lines, they have to go through a few considerations [3].

What Do We Need?
Hospitals and health systems are rethinking the revenue potential of many service lines after experiencing constraints due to COVID-19. Some add lines to gain market share, increase patient volume, or even generate new revenue. When this happens, the impact on hospital billing should always be considered.

What Are Our Operational Concerns?
Any shift in service lines will impact your labor force, the physical space different departments use, and the need for medical staff specialties. Beyond this, leadership should also consider the impact on hospital billing and hospital coding. This is because new service lines could mean different coding processes, shifts to relationships with payors, and new approaches to follow up. 

What Will the Financial Impact Be?
Adding or subtracting service lines will have a direct impact on the finances of a facility. It will be crucial to plan ahead for this. This includes understanding your starting point and ensuring you have the right metrics to properly evaluate the financial impact on your organization. These measurements also apply directly to your revenue cycle processes, where you’ll need to ensure you have efficient hospital coding and billing workflows that are ready to adapt to change. 

How Service Line Changes Impact Outsourcing Hospital Billing 
Outsourcing hospital billing in particular can be a smart option for managing this type of volatility. The Healthcare Financial Management Association (HFMA) found that over one out of every five revenue cycle leaders manage their inpatient revenue cycle, but have shifted to outsourcing for ancillary and outpatient services. Meaning that if you are considering service line adjustments in these areas, outsourcing could be a smart decision [4]. 

While 22% of survey respondents who managed RCM internally reported outsourcing some RCM services, 12% of leaders were interested in taking this step in the future. And a notable number want to go even further – 10% said they want to outsource all of their ancillary or outpatient services. The most common services outsourced were:

Survey respondents were most likely to consider outsourcing services for:

The best news is that most organizations that outsourced their RCM services were satisfied with the outcomes, and that leaders who outsourced more than one function were more highly likely to outsource more. 

The main takeaway is that, if you’ve had any service line changes, outsourcing hospital billing should be on the table for your organization. If you’d like to discuss which service lines could be a good starting point for you, or what changes you should consider after dropping service lines, contact us and we can help.

[1] D. Muoio, “‘Unsustainable’ losses are forcing hospitals to make ‘heart-wrenching’ cuts and closures, leaders warn,” Fierce Healthcare, 16 September 2022. Available: https://www.fiercehealthcare.com/providers/unsustainable-losses-are-forcing-hospitals-make-heart-wrenching-cuts-and-closures-leaders.
[2] A. Ellison, “13 hospitals cutting services,” Beckers Hospital Review, 14 July 2022. Available: https://www.beckershospitalreview.com/care-coordination/10-hospitals-cutting-services-712.html.
[3] Center for Optimizing Rural Health, “Implementing New Service Lines: Strategies and Tips You Should Know,” 8 December 2020. Available: https://optimizingruralhealth.org/implementing-new-service-lines-strategies-and-tips-you-should-know-2/.
[4] V. Bailey, “22% of Revenue Cycle Leaders Outsource Outpatient RCM Services,” RevCycleIntelligence, 13 July 2022. Available: https://revcycleintelligence.com/news/22-of-revenue-cycle-leaders-outsource-outpatient-rcm-services.

Physician Medical Billing Is Critical to Practice Health

Why A New Look at Physician Medical Billing Is Critical to Practice Health

Challenges in physician medical billing have changed. 

From the impact of a pandemic, to shifts in government, to changes in patient demographics, practices have seen the factors that shape their physician billing services turn upside down in recent years. This means that many practices are in a position of playing “catch up” in their physician billing services. But while the path forward might be unclear, there are ways that practice revenue cycle leaders can make changes to remain healthy and align their physician billing strategy with modern challenges. Here is a look at the issues you face as well as how to get past them. 

Modern Challenges Complicating Physician Billing Services
Post public health emergency, many practices are faced with an opportunity to assess the environment they’re functioning in for better understanding of how to move forward. Here are some key challenges to look out for at your practice [1]. 

Manual Processes Are Slowing You Down
Are you still relying on paper as the backbone of your physician billing services? Many practices are sending paper bills to their patients, despite the fact that under 10% of patients want to pay a bill using a paper check. 

Beyond this, paper statements are often confusing for patients and don’t clearly communicate how much they’re owed. Manual processes slow down patient payments, with 70% saying it can take more than 30 days after a patient visit to collect. But paper isn’t only a problem with patients. Managing appeals via manual processes can slow down your cash flows from insurance companies as well. 

You Aren’t Thinking Digital
Before the COVID-19 pandemic, technology for collection was a “nice to have”, but today, it’s a necessity. Surveys have found that as many as three out of four providers still use paper despite consumers wanting online payment at about the same rate. Unfortunately, 40% of providers believe that billing and collection practices have no impact on the patient experience. 

If you aren’t open to using digital in both patient and payer collection in physician medical billing, you’re falling behind the curve and are missing out on revenue from patients and insurance companies. 

You Don’t Understand Patient Payment Trends
High deductible health plans might have dropped in use between 2020 and 2021, but the deductibles themselves have increased. The same issues apply to traditional insurance where copays and deductibles are growing. Medical practices should be paying attention to hospital trends, where balances are getting higher, and patients are demonstrating increasing difficulty in meeting their financial obligations. 

This is a challenge to physician medical billing, especially if you aren’t tracking trends and haven’t adjusted for changes to your approach to collections since before the pandemic. 

How to Adjust Your Physician Billing Services
Now is an excellent time to look at your approach to physician medical billing and make changes that will sustain you even through future upheaval. Here are some places to start. 

Ensuring Funds Are Available For Growth
As you move forward, you will have multiple decisions to make in terms of where to invest for growth and sustainability – and many of these will require financial investment. This means that your first step will be making room in your budget for potential future opportunities. 

For example, this could include things like new practice management software, training for staff on how best to collect from commercial insurance, and bonuses to retain personnel who are the most effective and who will best support your practice as new challenges arise. Keep in mind that this is a long-term need. Modern challenges in physician medical billing will continue to evolve and to stay healthy, your practice will need to keep up on an ongoing basis. 

Investing in People
There is an ever-increasing amount of technology available to help you get past manual processes and keep up with patient payment trends. But this doesn’t mean you can skip investing in people. 

Your staff will need ongoing training on things like medical billing and coding, new technologies, process improvement, and maintaining a positive patient experience as you work to keep your practice healthy. This level of focus has to happen at the strategy level, with commitment from your practice to prioritize people from now on. 

This is more than just an internal question. Many practices see benefits from expanding their access to trained staff who understand the specialized needs of their practice by partnering with external experts. Know that, as challenges become more complex, the less an individual practice will be able to handle physician billing services alone and the more they will need to consider solutions like outsourcing to access knowledge and flexible talent. 

Attracting top leadership who are up to the task
Physician owners are often in a difficult position and sometimes, they aren’t really running their practices with a business mindset. This isn’t always a choice. They could very well be open to ideas to improve practice health, but don’t have the people underneath them that they need. 

This is where strong leaders on the administrative side come in. As practice management becomes increasingly complex, practices will need leaders who are up to the task of today’s challenges, and not just those who have demonstrated past successes. 

In today’s fast-changing environment, every practice needs access to a partner who understands physician billing services and can help them adapt multiple aspects of their business to meet the issues of the future. To learn how we can be that partnership for you, contact us today.

[1] B. Crotty, “4 Key payment trends impacting physician practices,” MJH Life Sciences, 23 November 2022. Available: https://www.physicianspractice.com/view/4-key-payment-trends-impacting-physician-practices.

If You Haven’t Done a Post-PHE AR Reset, It’s Time

If You Haven’t Done a Post-PHE AR Reset, It’s Time

Think back to what your AR processes looked like before the COVID-19 pandemic – how much do they have in common with the way your medical billing accounts receivable processes look today?

If they’re too similar, I’m sorry to say that your organization is likely falling behind the challenges facing medical providers today. And that’s because things have changed for providers – both internally and externally. Medicaid disenrollment is ramping up, junk health plans are on the chopping block, and CMS is adjusting to a new world. Internally, you’re probably coming off of years of adjustments to shifting patient volumes, changes to your staffing and technology, and keeping up with the ebb and flow of government programs. Everything has changed – and your approach to medical billing accounts receivable processes should have too. If not, your revenue cycle health is at risk.

It’s time for an AR reset, and there are a few things revenue cycle leaders can do today to make sure you’re on top of the changes you face.

  • Determine the last time you evaluated AR processes: If you’ve been keeping up with your approach to AR, congratulations, you’re ahead of the game. But if you haven’t had a refresh since 2021 or earlier, it’s time to reassess.
  • Assess the level of sophistication of your AR: There’s no reason to get stuck in the past. Take some time to evaluate where your AR processes stand today so that you have a strong awareness of your starting point.
  • Check the last time your KPIs were refreshed: You can’t manage what you don’t measure. If there’s any initiative or concern that your organization is prioritizing but you don’t have associated KPIs, it’s time for a refresh.
  • Review ownership and responsibility: Who owns your AR? Who’s responsible for making the most important decisions? Are they supported in navigating the coming challenges? If this isn’t something you’ve looked at since the height of the COVID-19 pandemic, you’re overdue for a refresh.

It’s most important though that you view this as an opportunity – a chance to bring your AR processes up to date so your organization can take advantage of fast-coming changes in healthcare. If you want to learn more about the possibilities that lie in front of you, feel free to contact me.

Hemant Apte, Chief Executive Officer in

Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.

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