Home Health Care of East Tennessee: The Audit That Brought Physician Payments to Light

In the Home Health Care of East Tennessee settlement, six companies agreed to pay $1.8 million to resolve allegations that they billed Medicare for services involving improper physician financial arrangements and false or invalid certifications. The allegations covered home health and, in some cases, hospice services. If you know how an agency paid its referring physicians or obtained the certifications behind its claims, you may recognize the connection that made this a False Claims Act case.

The U.S. Attorney’s Office for the Eastern District of Tennessee announced the settlement on September 5, 2017. The alleged conduct ranged from as early as 2002 through 2013. An internal audit prompted the companies to disclose potential violations, then supplement those disclosures as their investigation continued.

Physician Financial Relationships Behind Medicare Claims

The government alleged that compensation or other financial arrangements with certain referring physicians made some services ineligible for Medicare payment. It separately alleged that other billed services lacked valid certifications.

The Justice Department described the physician arrangements under the Ethics in Patient Referrals Act, commonly called the Stark law. Its announcement explained the purpose in practical terms: referral decisions should serve patients’ best interests, free from undue influence by payments or financial benefits from healthcare providers competing for those referrals.

That is where the business arrangement reaches the patient. A physician can direct care toward an agency while also receiving money from it. We look at what the payment bought, what work supported it, and how it connected to the patients sent to the agency.

A separate case involving Recovery Home Care shows why the work behind physician compensation matters. In its 2015 corporate settlement, the government alleged that excessive compensation for medical-director or chart-review work induced home health referrals. The alleged problem sat inside an arrangement described as professional work. For someone familiar with the contracts, the comparison is between the duties, the work performed, the compensation and the referrals.

Home Health Care of East Tennessee’s settlement put financial arrangements with referring physicians at the center of its own payment allegations. Who approved the arrangement, how the payment was calculated and what services it purchased are questions we examine with the person who knows the business.

What the Physician Certification Was Supposed to Establish

The settlement announcement explains that Medicare required written physician certifications at the start of home health or hospice care and periodically during care, before the provider billed. The purpose was to help establish that the care was medically necessary. The government alleged that false or invalid certifications made certain billed services ineligible for payment.

In the home health certification chain, the referral, clinical assessment, certification and claim serve different purposes. An insider may know one part of this sequence in detail while another office holds the rest.

The clinical record addresses whether home health care is needed. The financial records address the relationship between the physician and the agency.

The Companies in the Settlement

The settlement named Home Health Care of East Tennessee, Inc.; Home Health Care of West Tennessee, Inc.; Home Health Care Services, Inc.; Home Health Care Services II, Inc.; Health Care Staffing of Tennessee, Inc.; and Home Health Care Support Services, Inc. Each was based in Chattanooga, Tennessee.

The company name on a contract, certification packet or claim matters when we connect the records. Home health businesses can operate through corporate parents, separately certified agencies, branches and service locations. An insider’s knowledge of which entity made a payment or submitted a claim helps connect the transaction to the care.

The Internal Audit Led to Voluntary Disclosure

The companies began voluntarily disclosing potential Stark-law violations to the U.S. Attorney’s Office in November 2010 after finding them during an ongoing internal audit. They continued investigating and sent supplements reporting additional violations. The Justice Department said the settlement resulted from those voluntary disclosures.

The companies’ own review brought the physician arrangements to the government’s attention, and the account developed as the review continued. For someone who works in compliance, accounting or physician contracting, that is a recognizable position: knowing what the organization discovered about its own payments and referrals.

We want to understand what an internal review found, which arrangements it addressed and how its findings connected to billing. The underlying financial and clinical records give that account its substance. If you know what an audit uncovered, you can speak with us about that knowledge and the decisions surrounding it.

What Evidence Is Needed to Prove Fraud?

For physician-arrangement and certification allegations, the evidence connects the financial relationship, the clinical support, the certification and the Medicare claim. We work with insiders to trace what was ordered, documented, submitted and paid, and who controlled the decisions along that path.

The agency’s assessment, plan and visit records explain the clinical account that reached billing. OASIS assessment information contributes to payment grouping and quality measurement, while the certification addresses eligibility and the claim requests payment. The Medicare claims workflow connects the services and submitted information to the payment record. Records held by the physician and the agency need to tell a consistent story about the care.

The work described in a physician contract, the compensation paid and the associated referrals have to be connected to the claims under examination. We build that connection with you, whether your view comes from patient care, physician contracting, billing or an internal review. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Original Certification Can Tell a Different Story

A separate government complaint concerning Great Lakes Home Healthcare Specialists alleged that management directed an employee to change physician signature dates using white out. The complaint then described what happened to the original record:

We see the absurdity in that allegation: the real date became the problem to erase. A certification could look complete in the patient file while concealing when the physician actually signed it. That separate case shows why someone who saw the original record or the instruction to change it can explain something the final billing packet hides.

You Know the Arrangement Behind the Claim

If you saw how physician payments, certifications or audit findings connected to Medicare billing, speak with our whistleblower experts about what happened inside the agency. We work with you to build your strongest home health whistleblower case and bring in home health fraud whistleblower lawyers who understand physician relationships and certification. We remain your partners throughout the case.