Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

 

ABERRANT MEDICARE HOME HEALTH 

OUTLIER PAYMENT PATTERNS IN 

MIAMI-DADE COUNTY AND OTHER 

GEOGRAPHIC AREAS IN 2008 

 

Daniel R. Levinson 

Inspector General 

December 2009 

OEI-04-08-00570 
Office of Inspector General 

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of beneficiaries served by those 

programs. This statutory mission is carried out through a nationwide network of audits, 

investigations, and inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying 

out their respective responsibilities and are intended to provide independent assessments of 

HHS programs and operations. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and beneficiaries. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities. 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS i 

OBJECTIVE

To identify geographic areas that exhibited aberrant Medicare home 

health outlier payment patterns in 2008. 

BACKGROUND 

In December 2008, the Centers for Medicare & Medicaid Services (CMS) 

announced its continuing efforts to fight Medicare fraud, waste, and 

abuse by home health providers in the Miami-Dade County area by 

suspending provider payments and taking other payment and review 

actions. To date, CMS has placed 33 Miami-Dade home health agencies 

on payment suspension. In May 2009, the Department of Health and 

Human Services and the Department of Justice created an interagency 

Health Care Fraud Prevention and Enforcement Action Team (HEAT) 

to combat health care fraud nationwide. 

In 2008, Medicare paid approximately $15 billion for home health 

services. Home health care has grown in recent years for reasons 

including advances in medicine and technology as well as beneficiaries’ 

preference to receive treatment at home rather than in a hospital or 

nursing home. However, the recent growth in home health care services 

relative to the number of eligible beneficiaries indicates that it may be 

subject to fraud. 

In October 2000, CMS instituted a prospective payment system (PPS) 

that pays a predetermined rate for 60-day episodes of home health care. 

The payments are adjusted for beneficiaries’ health conditions and care 

needs, as well as geographical wage differences. There are no limits to 

the number of 60-day episodes eligible beneficiaries may receive. 

Medicare makes additional payments, known as outlier payments, to 

home health providers that supply services to beneficiaries who incur 

unusually large costs. Although CMS does not limit, or cap, outlier 

payments to individual providers, total outlier payments for home 

health services may not exceed 5 percent of annual projected total home 

health payments. In August 2009, CMS issued a home health PPS 

proposed rule for 2010. Among other things, the proposed rule would 

cap outlier payments to individual home health providers at 10 percent. 

CMS estimates that an individual provider cap will reduce national 

outlier payments to no more than 2.5 percent of total home health 

payments. 

 EXECUTIVE SUMMARY 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS ii 

EXECUTIVE SUMMARY 

We analyzed all Medicare home health claims that were submitted and 

fully paid in 2008 to identify geographic areas that exhibited aberrant 

Medicare home health outlier payment patterns. We define aberrant to 

be at least twice the national average for three or more of the five 

payment characteristics we reviewed. 

FINDINGS 

Miami-Dade County accounted for more home health outlier payments 

in 2008 than the rest of the Nation combined. In 2008, Miami-Dade 

County accounted for 52 percent of the approximately $1 billion Medicare 

paid nationally in home health outlier payments, while only 2 percent of 

all Medicare beneficiaries receiving home health services resided there. In 

addition, 86 percent (25 of 29) of home health providers that received 

outlier payments over $100,000 per beneficiary in 2008 were located in 

Miami-Dade County. Further, 67 percent (174 of 259) of home health 

providers that received total outlier payments over $1 million in 2008 were 

located in Miami-Dade County. 

In Miami-Dade County, Medicare outlier payments for home health 

claims with a primary diagnosis related to diabetes were eight times 

the national average. Medicare outlier payments for claims with a 

primary diagnosis related to diabetes accounted for 6 percent of all home 

health payments. In Miami-Dade County, Medicare outlier payments for 

home health visits with a primary diagnosis related to diabetes accounted 

for 50 percent—or eight times the national average—of total home health 

payments. Further, the percentage of outlier payments in Miami-Dade 

County exceeded that of other Florida counties with higher rates of 

diabetes. 

Twenty-three counties nationwide exhibited aberrant home health 

outlier payment patterns similar to that of Miami-Dade County but to 

a lesser extent. Medicare payments in Miami-Dade County were at 

least twice the national average for all five home health outlier payment 

characteristics we reviewed. An additional 23 counties nationwide had 

payments that were at least twice the national average for three or 

more of the five characteristics. In addition, 59 percent (850 of 1,432) of 

the total home health providers in Miami-Dade County and the 23 other 

counties with similar characteristics were paid at least twice the 

national average for three or more of the five outlier payment 

characteristics we reviewed. 
EXECUTIVE SUMMARY 

RECOMMENDATIONS 

Our findings demonstrate that home health services in Miami-Dade 

County, as well as 23 additional counties nationwide, warrant additional 

review as part of ongoing antifraud activities, such as HEAT, in the 

Medicare program. 

To address our findings, we recommend that CMS:

Continue with efforts to institute a cap on the total outlier payments 

an individual home health provider may receive annually.

Review home health providers that exhibit aberrant outlier payment 

patterns and respond appropriately based on the findings. 

Continue with efforts to strengthen enrollment standards for home 

health providers to prevent illegitimate home health agencies from 

obtaining billing privileges. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

CMS concurred with all three recommendations. At the time of its 

comments, CMS was analyzing public comments on the home health 

PPS proposed rule which would, among other things, cap outlier 

payments at 10 percent per agency. The final rule was published in the 

Federal Register on November 10, 2009, and is effective January 1, 

2010. CMS has also taken steps to address widespread abuse of 

Medicare outlier payments to home health agencies in Miami-Dade 

County. 

We support CMS’s efforts to address these issues and encourage it to 

continue making progress in these areas. We made technical changes to 

the report based on CMS’s comments. 

 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS iii 
 TABLE OF CONTENTS 

EXECUTIVE SUMMARY .....................................i

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

 Miami-Dade County accounted for more home health outlier 

 payments in 2008 than the rest of the Nation combined. . . . . . . . . 8 

 In Miami-Dade County, Medicare outlier payments for 

 home health claims with a primary diagnosis related to 

 diabetes were eight times the national average . . . . . . . . . . . . . . 10 

 Twenty-three counties nationwide exhibited aberrant home 

 health outlier payment patterns similar to that of Miami-Dade 

 County but to a lesser extent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Agency Comments and Office of Inspector General Response . . . 14 

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

 A: Counties in Which Medicare Home Health Payments 

 Were At Least Twice the National Average for Three 

 or More of the Five Characteristics We Reviewed . . . . . . . . . . 16 

 B: Home Health Providers in the Miami-Dade County and 

 the 23 Counties That Were Paid At Least Twice the 

 National Average for Three or More of the Five Payment 

 Characteristics We Reviewed . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

 C: Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 1 

OBJECTIVE 

To identify geographic areas that exhibited aberrant Medicare home 

health outlier payment patterns in 2008. 

BACKGROUND 

In December 2008, the Centers for Medicare & Medicaid Services 

(CMS) announced its continuing efforts to fight Medicare fraud, 

waste, and abuse by home health providers in the Miami-Dade 

County area by suspending provider payments and taking other 

payment and review actions.1 To date, CMS has placed 33 MiamiDade home health agencies on payment suspension. 

In addition to suspending payments, CMS has visited Medicare 

beneficiaries to investigate the medical necessity of home health 

services they received.2 These visits indicated, among other things, 

that services related to diabetes may represent a payment 

vulnerability in the Medicare program. For example, some home 

health providers received Medicare payments for reportedly providing 

insulin injections to beneficiaries who did not qualify for home health 

services because they were not confined to their home. 

Medicare Home Health Services 

In 2008, Medicare paid approximately $15 billion for home health 

services.3 Home health care has grown in recent years for reasons 

including medical and technological advances. Growth in home health 

care can also be attributed to beneficiaries’ preference to stay at home 

rather than seek treatment in a hospital or nursing home. However, 

the recent growth in home health care services relative to the number of 

eligible beneficiaries indicates that these services may be subject to 

increased fraud. 

1 CMS, “CMS Strengthens Efforts to Fight Medicare Waste, Fraud and Abuse.” Press 

Release, December 29, 2008. Available online at 

http://www.cms.hhs.gov/apps/media/press_releases.asp. Accessed on June 22, 2009. 

2 USA Today, “Sleuths go door to door to sniff out Medicare fraud.” Available online at 

http://www.usatoday.com/news/health/2008-10-05-fraud-inside_N.htm. Accessed on 

May 14, 2009. 

3 Office of Inspector General (OIG) analysis of 2008 Medicare home health claims. This 

figure reflects all claims that were submitted and fully paid in 2008. We consider a claim to 

be fully paid if both the initial partial payment of the estimated rate for a full 60-day 

episode of care and remaining payment, including any outlier payments, at the end of the 

60-day episode have been made on the claim. 

 INTRODUCTION 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 2 

INTRODUCTION 

To qualify for home health services, Medicare beneficiaries must 

(1) be confined to the home; (2) need intermittent skilled nursing 

services, physical or speech therapy, or continuing occupational therapy; 

(3) be under the care of a physician; and (4) be under a plan of care 

prescribed and periodically reviewed by a physician.4 

Medicare Home Health Billing Requirements 

To obtain Medicare billing privileges, home health providers must 

submit a completed application and supporting documentation to CMS.5 

The application requires information such as personal details about the 

provider (e.g., adverse legal actions and convictions); the provider’s 

practice location; and the names of individuals having ownership or 

managing control of the provider’s business. By signing and submitting 

the application, the provider agrees to follow all Medicare laws, 

regulations, and program instructions. Further, providers are required 

to provide documentation demonstrating that they have sufficient 

reserve funds to operate for their first 3 months as Medicare providers. 

Once approved, home health providers may bill for all home health 

services excluding durable medical equipment.6 7 Providers must 

include beneficiaries’ diagnosis codes on all claims. The primary 

diagnosis is based on a beneficiary’s condition most related to the 

current plan of care.8 This code must relate to home health services 

rendered by the provider. For example, if a provider assists a 

beneficiary with administering insulin only, a diabetes-related diagnosis 

code should be listed as the primary diagnosis code on the claim. 

Medicare Payment System for Home Health Services 

In October 2000, CMS instituted a prospective payment system (PPS) 

that pays a predetermined rate for 60-day episodes of home health 

4 42 CFR § 409.42. 

5 CMS, “Medicare Enrollment Application: Institutional Providers.” Available online at 

http://www.cms.hhs.gov/cmsforms/downloads/cms855a.pdf. Accessed on June 16, 2009. 

6 CMS, “Home Health PPS: Overview.” Available online at 

http://www.cms.hhs.gov/HomeHealthPPS/. Accessed on June 16, 2009. 

7 Some home health providers may also be certified to bill Medicare for durable medical 

equipment. Durable medical equipment includes items such as canes, knee braces, and 

wheelchairs. 

8 CMS, “Medicare Home Health Diagnosis Coding.” Available online at 

http://www.cms.hhs.gov/HomeHealthPPS/Downloads/v_code_rev_stmt2.pdf. Accessed on 

June 16, 2009. 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 3 

INTRODUCTION 

care.9 The payments are adjusted for beneficiaries’ health conditions 

and care needs, as well as geographical wage differences. 

There are no limits to the number of 60-day episodes eligible 

beneficiaries may receive.10 

Home health providers receive an initial partial payment of the 

estimated rate for a full 60-day episode of care when the CMS 

contractor servicing their area receives their claims.11 12 Providers 

receive the remaining payment at the end of the 60-day episode. The 

total payment is the sum of the initial and remaining payments, unless 

there is an applicable adjustment.13 14 Beneficiaries do not make 

copayments for home health services. 

Medicare makes additional payments, known as outlier payments, to 

home health providers that supply services to beneficiaries who incur 

unusually high costs.15 There is currently no limit, or cap, on outlier 

payments an individual home health provider may receive. However, 

total outlier payments for home health services may not exceed 

5 percent of annual projected total home health payments.16 17 

In August 2009, CMS issued a home health PPS proposed rule for 2010. 

Among other things, the proposed rule would cap outlier payments to 

individual home health providers at 10 percent.18 CMS estimates that 

an individual provider cap will reduce national outlier payments to no 

more than 2.5 percent of total home health payments. 

9 CMS, “Home Health PPS: Overview.” Available online at 

http://www.cms.hhs.gov/HomeHealthPPS/. Accessed on June 16, 2009. 

10 Ibid. 

11 Ibid. 

12 CMS contracts with regional home health intermediaries to pay claims submitted by 

home health providers. 

13 CMS, “Home Health PPS: Overview.” Available online at 

http://www.cms.hhs.gov/HomeHealthPPS/. Accessed on June 16, 2009. 

14 An example of a payment adjustment is a partial episode payment adjustment that 

occurs when a beneficiary transfers to another home health provider during a 60-day 

episode. 

15 CMS, “Home Health PPS: Overview.” Available online at 

http://www.cms.hhs.gov/HomeHealthPPS/. Accessed on June 16, 2009. 

16 The Balanced Budget Act of 1997, P.L. No. 105-33, 42 U.S.C. 1395fff(b)(5). 

17 If total outlier payments exceed 5 percent in a given year, CMS may adjust its costpayment variables (e.g., fixed-dollar loss ratio) to meet the 5-percent requirement for the 

subsequent year. 

18 74 Fed. Reg. 40947 (Aug. 13, 2009). 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 4 

INTRODUCTION 

Health Care Fraud Prevention and Enforcement Action Team 

In 2007, the Department of Health and Human Services (HHS) and 

the Department of Justice (DOJ) established joint Medicare Fraud 

Strike Force teams in South Florida and Los Angeles to combat 

Medicare fraud.19 As of May 2009, the team operating in South 

Florida has convicted 146 people and secured $186 million in criminal 

fines and civil recoveries.20 The Medicare Fraud Strike Force was 

designed to combat fraud through the use of Medicare data analysis 

and an increased focus on community policing.21 HHS and DOJ 

recently announced the establishment of an interagency Health Care 

Fraud Prevention and Enforcement Action Team (HEAT) to combat 

health care fraud nationwide.22 

The HEAT team is focusing on fraud prevention and building on prior 

OIG and CMS reviews of durable medical equipment providers.23 The 

HEAT team will also undertake initiatives including increased 

training for providers on Medicare compliance, improving data 

sharing between CMS and law enforcement, and strengthening 

program integrity monitoring. In June 2009, HHS announced that as 

part of the HEAT initiative, 53 people in Miami, Detroit, and Denver 

were indicted for schemes to submit more than $50 million in false 

Medicare claims.24 

Related Work 

OIG has issued several reports related to home health care. These 

reports have addressed various topics, including variation in Medicare 

19 HHS, “Attorney General Holder and HHS Secretary Sebelius Announce New 

Interagency Health Care Fraud Prevention and Enforcement Action Team.” News Release, 

May 20, 2009. Available online at 

http://www.hhs.gov/news/press/2009pres/05/20090520a.html. Accessed on June 19, 2009. 

20 Ibid. 

21 HHS, “Medicare Fraud Strike Force Operations Lead to Charges Against 53 Doctors, 

Health Care Executives and Beneficiaries for More than $50 Million in Alleged False Billing 

in Detroit.” News Release, June 24, 2009. Available online at 

http://www.hhs.gov/news/press/2009pres/06/20090624a.html. Accessed on June 25, 2009. 

22 HHS, “Attorney General Holder and HHS Secretary Sebelius Announce New 

Interagency Health Care Fraud Prevention and Enforcement Action Team.” News Release, 

May 20, 2009. Available online at 

http://www.hhs.gov/news/press/2009pres/05/20090520a.html. Accessed on June 19, 2009. 

23 Ibid. 

24 HHS, “Medicare Fraud Strike Force Operations Lead to Charges Against 53 Doctors, 

Health Care Executives and Beneficiaries for More than $50 Million in Alleged False Billing 

in Detroit.” News Release, June 24, 2009. Available online at 

http://www.hhs.gov/news/press/2009pres/06/20090624a.html. Accessed on June 25, 2009. 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 5 

INTRODUCTION 

payments for home health services,25 problem providers and their 

impact on Medicare,26 and geographical variation in the average 

number of visits provided by home health agencies.27 In addition, other 

OIG work has uncovered potential health care fraud in South Florida, 

specifically in Miami-Dade County.28 29 30

In February 2009, the Government Accountability Office (GAO) issued a 

report on improvements needed to address improper payments in home 

health.31 GAO determined that compared to the rest of the country, a 

large percentage of home health cases in Miami-Dade County involved 

diabetic beneficiaries. Specifically, 50 percent of all Medicare 

beneficiaries in Miami-Dade County who received home health services 

had a diagnosis of diabetes compared to an average of 16 percent for all 

other counties included in the analysis. 

METHODOLOGY 

Scope 

We reviewed all Medicare home health claims that were submitted and 

fully paid in 2008.32 

Data Source, Collection, and Analysis 

We obtained the National Claims History file containing the home 

health claims included in this study from CMS. We used the home 

health provider identification numbers on the claims and information in 

CMS’s Online Survey, Certification, and Reporting database to 

determine the providers’ ZIP Codes. Next, we matched the providers’ 

25 OEI-04-93-00260, “Variation Among Home Health Agencies in Medicare Payments for 

Home Health Services,” July 1995. 

26 OEI-09-96-00110, “Home Health: Problem Providers and Their Impact on Medicare,” 

July 1997. 

27 OEI-04-93-00262, “Geographical Variation in Visits Provided by Home Health 

Agencies,” September 1995. 

28 OEI-01-08-00100, “Medicare Part B Billing for Ultrasound,” July 2009. 

29 OEI-09-07-00030, “Aberrant Billing in South Florida for Beneficiaries with 

HIV/AIDS,” September 2007. 

30 OEI-03-07-00150, “South Florida Suppliers’ Compliance With Medicare Standards: 

Results From Unannounced Visits,” March 2007. 

31 GAO-09-185, “Medicare: Improvements Needed to Address Improper Payments in 

Home Health.” 

32 We consider a claim to be fully paid if both the initial partial payment of the estimated 

rate for a full 60-day episode of care and remaining payment, including any outlier 

payments, at the end of the 60-day episode have been made on the claim. 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 6 

INTRODUCTION 

ZIP Codes to the corresponding counties using SAS computer software 

and determined the total number of home health providers in each 

county.33 Similarly, we repeated the matching process using 

beneficiaries’ ZIP Codes listed on the claims to determine the total 

number of beneficiaries who received home health services in each 

county.34 We also determined the total number of claims submitted 

from each county where home health providers were located. 

For each county, we calculated the total amount Medicare paid for the 

home health claims and determined the outlier paid amounts included 

in those payments. For each provider, we also calculated the total 

outlier amount Medicare paid per beneficiary. In addition, we 

calculated the total outlier amount Medicare paid in each county for 

claims with a primary diagnosis related to diabetes.35 Using this 

information, we calculated the following five payment characteristics 

nationally, as well as for each county and home health provider listed on 

the claims:36 

1. average outlier payment per provider;37

2. average outlier payment per beneficiary;38

3. average outlier payment per claim; 

4. outlier payment rates (i.e., outlier payments as a percentage of total 

home health payments); and 

5. outlier payment rates for claims with a primary diagnosis related to 

diabetes (i.e., outlier payments for claims with a primary diagnosis 

related to diabetes as a percentage of total home health payments). 

33 SAS uses a ZIP Code’s geographic center to match the ZIP Code to its corresponding 

county. 

34 We counted each beneficiary only once. 

35 We considered all services with a Common Procedure Terminology (CPT) code with a 

prefix of 250 to be diabetes related. CPT codes are used to categorize medical procedures 

and services. 

36 According to the U.S. Census Bureau, there were 3,141 counties or county equivalents 

in the United States in 2007. There were 2,158 counties or county equivalents listed on the 

claims we reviewed. 

37 This value is the equivalent of total outlier payments for an individual home health 

provider. 

38 Some beneficiaries received services from more than one home health provider. These 

beneficiaries were counted more than once when calculating the average outlier payment 

per beneficiary for each home health provider. 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 7 

INTRODUCTION 

We define payments as aberrant if they are at least twice the national 

average for three or more of the above five payment characteristics. 

Limitations 

Some ZIP Codes span multiple counties. However, in this study, 

ZIP Codes were matched to only one corresponding county. Therefore, 

some providers, beneficiaries, and claims associated with a particular 

county in our analysis may have actually been associated with a 

neighboring county. 

Standards 

This study was conducted in accordance with the “Quality Standards for 

Inspections” approved by the Council of the Inspectors General on 

Integrity and Efficiency.
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 8 

 FINDINGS 

Miami-Dade County accounted for more home 

health outlier payments in 2008 than the rest of 

the Nation combined 

In 2008, Miami-Dade County 

accounted for 52 percent of the 

approximately $1 billion Medicare 

paid nationally in home health 

outlier payments, while only 2 percent of all Medicare beneficiaries 

receiving home health services resided there. In addition, outlier 

payments constituted 59 percent of total home health payments in 

Miami-Dade County, but constituted only 7 percent of total home health 

payments, on average, nationally. 

As shown in Table 1, the average outlier payment per beneficiary for 

home health providers located in Miami-Dade County was 32 times the 

corresponding 2008 national average. The average outlier payment per 

claim in Miami-Dade County was 22 times the national average. 

Further, the average payment per provider in Miami-Dade County was 

14 times the national average. 

Table 1: Summary of 2008 Medicare Home Health Outlier Payments 

Home Health Outlier Payments 

National 

Average 

Miami-Dade 

County Average 

Ratio of Miami-Dade 

County Average to 

National Average* 

Payment per beneficiary $378 $11,928 32:1 

Payment per claim $190 $4,100 22:1 

Payment per provider $110,785 $1,581,608 14:1 

Outlier payment rate** 7% 59% 8:1 

* Rounded to the closest whole number. 

** Based on total 2008 Medicare home health payments. 

Source: OIG analysis of 2008 Medicare home health claims.

Over 85 percent of home health providers that received outlier payments 

over $100,000 per beneficiary in 2008 were located in Miami-Dade County 

In 2008, Medicare paid over $100,000 each for home health services 

provided to 33 beneficiaries nationally. The total payment for these 

services exceeded $3 million. Services for the 33 beneficiaries were 

provided by 29 home health providers. Of these providers, 86 percent 

(25 of 29) were located in Miami-Dade County. 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 9 

FINDINGS 

Home health providers in Miami-Dade County also represented the 

majority of providers that received Medicare payments per beneficiary at 

amounts over $75,000. Providers in Miami-Dade County accounted for 

70 percent (111 of 158) of home health providers nationwide that received 

Medicare payments from $75,001 to $100,000 per beneficiary. 

Table 2 shows total outlier payments per beneficiary, the number of 

home health providers receiving those payments in the entire Nation 

and Miami-Dade County, and the percentage of providers in 

Miami-Dade County receiving those payments. 

Table 2: Home Health Outlier Payments Per Beneficiary in 2008 

Total Outlier Payment Amount 

Per Beneficiary 

Number of Providers in 

All Counties (including 

Miami-Dade County)* 

Number of Providers in 

Miami-Dade County* 

Miami-Dade Providers as a 

Percentage of Providers in 

All Counties** 

Up to $25,000 5,782 327 6% 

$25,001 to $50,000 1,400 280 20% 

$50,001 to $75,000 468 232 50% 

$75,001 to $100,000 158 111 70% 

Over $100,000 29 25 86% 

Total 7,837 975 12% 

* Some providers may be included in more than one category. 

** Rounded to the closest whole number. 

Source: OIG analysis of 2008 Medicare home health claims.

Sixty-seven percent of home health providers that received total outlier 

payments over $1 million in 2008 were located in Miami-Dade County 

In 2008, a total of 829 providers nationwide received Medicare home 

health outlier payments. Of the providers that received outlier 

payments over $1 million, 67 percent (174 of 259) were located in 

Miami-Dade County. Twenty-two providers nationwide received outlier 

payments over $5 million in 2008. Of these providers, 91 percent 

(20 of 22) were located in Miami-Dade County. 

 
F N D N G S 

Table 3 shows the number of home health providers receiving total 

outlier payments over $1 million in the entire Nation and Miami-Dade 

County and the percentage of providers in Miami-Dade County 

receiving those payments in 2008. 

Table 3: Total Home Health Outlier Payments Over $1 Million in 2008 

Miami-Dade Providers 

Number of Providers in as a Percentage of 

All Counties (including Number of Providers in Providers in All 

Total Outlier Payment Amount Miami-Dade County) Miami-Dade County Counties' 

Over $1 million to $5 million 237 154 65% 

Over $5 million to $10 million 21 19 90% 

Over $10 million 1 1 100% 

Total 259 174 67% 

• Rounded to the closest whole number. 


Source: OIG analysis of 2008 Medicare home health claims. 


In Miami-Dade County, Medicare outlier 

payments for home health claims with a primary 

diagnosis related to diabetes were eight times 

the national average 

The primary diagnosis associated

with almost one-quarter of all 

home health visits nationally in 

2008 was related to diabetes.39 

Medicare outlier payments for 

these visits accounted for 6 percent of all home health payments. In 

Miami-Dade County, Medicare outlier payments for home health visits 

with a primary diagnosis related to diabetes accounted for 50 percentor eight times the national average-oftotal home health payments. 

Further, the percentage of outlier payments in Miami-Dade County 

exceeded that of other Florida counties with higher rates of diabetes. 4o 41 

39 The beneficiaries may have also received other services for conditions unrelated to 

diabetes during these visits. 

40 We obtained diabetes rates among Florida adults over the age of 20 years from the 

Centers for Disease Control and Prevention. These rates were for 2005, the most recent 

year available at the time of our review. Available online at 

http://apps.nccd.cdc.govillDT STRS2/CountyPrevalenceData.aspx?Stateld=12. Accessed on 

June 16, 2009. 

41 We ranked Florida counties according to the number of adults with diabetes and 

selected the four counties with the largest populations of adults with diabetes as well as a 

diabetes rate exceeding that in Miami-Dade County. 

OEI·04·08·00570 ABERRANT HOME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI-DADE COUNTY AND OTHER AREAS 10 
F N D N G S 

Table 4 shows a comparison of the most recently available rates of 

diabetes among adults over age 20 in Miami-Dade County and four 

other Florida counties and the corresponding outlier payment rates for 

home health claims with a primary diagnosis related to diabetes in each 

county in 2008. 

Table 4: Comparison of Adult Diabetes Rates and Medicare Outlier 

Payments for Home Health Claims With a Primary Diagnosis Related to 

Diabetes in Five Florida Counties 

Medicare Outlier Payment 

Rate for Claims With a 

Number of Adults Adult Diabetes Primary Diagnosis 

County With Diabetes* Rate* t Related to Diabetes" 

Miami-Dade 129,100 7.5% 50% 

Hillsborough 73,810 9.1% 4% 

Duval 50,260 8.6% 1% 

Pinellas 66,280 9.1% 1% 

Palm Beach 84,500 8.8% 1% 

• Source: The Centers for Disease Control and Prevention. The data were for 2005. the most recent year 


available at the time of our review. 


tin 2005, the rate of diabetes in Florida was 17.1 percent in adults aged 65-74 years and 15.7 percent in 


adults aged 75 or older. Rates were based on the total population of adults aged 18 years or older. 


•• Source: OIG analysis of 2008 Medicare home health claims. 


Twenty-three counties nationwide exhibited 

aberrant home health outlier payment patterns 

similar to that of Miami-Dade County but to a 

lesser extent 

Medicare payments in 

Miami-Dade County were at least 

twice the national average for all 

five home health outlier payment 

characteristics we reviewed. An 

additional 23 counties nationwide had payments that were at least 

twice the national average for three or more of the five characteristics.42 

See Appendix A for a summary of the Medicare home health outlier 

payments for each of the five payment characteristics we reviewed in 

Miami-Dade County and the other 23 counties. 

42 We do not identify the 23 counties because they may be subject to future OIG and 

HEAT reviews. 

OEI·04-08-00570 ABERRANT HOME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI-DADE COUNTY AND OTHER AREAS 11 
FINDINGS 

Of the total home health providers in Miami-Dade County and the other 

23 counties, 59 percent (850 of 1,432) were paid at least twice the 

national average for three or more of the five payment characteristics 

we reviewed. See Appendix B for additional details on the number of 

providers that were paid at least twice the national average for three or 

more payment characteristics, as well as the total number of providers 

in each county. 

OEI-04·08·00570 ABERRANT HOME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI-DADE COUNTY AND OTHER AREAS 12 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 13 

South Florida has been the focus of efforts to combat Medicare fraud, 

waste, and abuse in recent years. In addition, in May 2009, HHS and 

DOJ established an interagency HEAT team to combat health care 

fraud nationwide. Our findings demonstrate that home health services 

in Miami-Dade County, as well as in 23 additional counties nationwide, 

warrant additional review as a part of ongoing antifraud activities in 

the Medicare program. 

We found that Miami-Dade County accounted for more home health 

outlier payments in 2008 than the rest of the Nation combined. Over 

85 percent of home health providers that received outlier payments over 

$100,000 per beneficiary were located in Miami-Dade County. In 

addition, 67 percent of home health providers that received total outlier 

payments over $1 million were located in Miami-Dade County. We also 

found that in Miami-Dade County, Medicare outlier payments for home 

health claims with a primary diagnosis related to diabetes were eight 

times the national average. 

In addition, we found that 23 other counties exhibited aberrant home 

health payment patterns similar to that of Miami-Dade County but to a 

lesser extent. Over half of the total home health providers in MiamiDade County and the 23 other counties we identified were paid at least 

twice the national average for three or more of the five payment 

characteristics we reviewed. 

To address our findings, we recommend that CMS: 

Continue With Efforts To Institute a Cap on the Total Outlier Payments an 

Individual Home Health Provider May Receive Annually

In August 2009, CMS issued a home health PPS proposed rule for 2010 

to cap outlier payments to individual home health providers at 10 

percent, thus reducing national outlier payments to an estimated 2.5 

percent of total home health payments. Capping outlier payments to 

individual home health providers may make the area of home health 

services less prone to fraudulent activity by mitigating potential 

inappropriate billing vulnerabilities. Currently, CMS imposes a cap on 

the payments a hospice agency may receive based on the number of 

Medicare beneficiaries the agency serves. 

 RECOMMENDATIONS 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 14 

RECOMMENDATIONS 

Review Home Health Providers That Exhibit Aberrant Outlier Payment 

Patterns and Respond Appropriately Based on the Findings 

For example, CMS could develop a method of determining thresholds for 

a number of characteristics that would trigger an immediate, 

prepayment review. These characteristics may include the factor by 

which a provider’s average outlier payment exceeds the national 

average. 

To assist CMS, we provided information under separate cover on the 

specific providers in this report that were paid at least twice the 

national average for three or more of the five payment characteristics 

we reviewed. 

Continue With Efforts To Strengthen Enrollment Standards for Home 

Health Providers To Prevent Illegitimate Home Health Agencies From 

Obtaining Billing Privileges 

In its August 2009 home health PPS proposed rule, CMS described 

methods for limiting enrollment of home health agencies having 

characteristics associated with fraudulent activity (e.g., sharing the 

same practice location, selling or transferring ownership of the agency 

within 3 years of enrollment). We encourage CMS to continue to pursue 

these methods for limiting the enrollment of home health providers. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

CMS concurred with all three recommendations. At the time of its 

comments, CMS was analyzing public comments on the home health 

PPS proposed rule which would, among other things, cap outlier 

payments at 10 percent per agency. The final rule was published in the 

Federal Register on November 10, 2009, and is effective January 1, 

2010. CMS has also taken steps to address widespread abuse of 

Medicare outlier payments to home health agencies in Miami-Dade 

County. Specifically, CMS is (1) suspending home health agencies with 

high amounts of outlier payments, (2) enhancing visits to beneficiaries 

in their homes to verify that they qualify for home health services, and 

(3) utilizing auto-denial edits for beneficiaries who do not qualify for 

home health services. 

Further, CMS initiated a new process in January 2009 to deny the 

enrollment of a home health agency if the owner has an existing 

overpayment that has not been fully repaid or has been placed under 

Medicare payment suspension. As of January 2009, CMS contractors 
RECOMMENDATIONS 

are required to perform additional verification of home health agencies 

having certain characteristics (i.e., agencies that change their practice 

locations, banking information, special payment addresses, or reactivate 

their Medicare billing privileges). In the home health PPS final rule, 

effective January 1, 2010, CMS also established methods for limiting 

enrollment of home health agencies based on certain characteristics. 

We support CMS’s efforts to address these issues and encourage it to 

continue making progress in these areas. We made technical changes to 

the report based on CMS’s comments. For the full text of CMS’s 

comments, see Appendix C. 

 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 15 
O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 

 APPENDIX A

Counties in Which Medicare Home Health Payments Were At Least Twice the National Average for Three or More of the Fiv

County 

Average Outlier 

Payment Per 

Provider 

Average Outlier Payment 

Per Beneficiary 

Average Outlier Payment 

Per Claims Outlier Payment Rates * 

Outlier Payment 

Claims With 

Diagnosis Related to D

All counties (National Average) $110,785 $378 $190 7% Miami-Dade $1,581,608 $11,928 $4,100 59% 1 $295,223 $1,617 $807 22% 2 $355,417 $1,379 $682 19% 3 $267,941 $1,396 $575 26% 4 $233,407 $1,496 $538 17% 5 $541,411 $785 $490 15% 6 $628,018 $10,129 $2,166 53% 7 $245,482 $1,504 $644 18% 8 $416,053 $2,057 $1,117 25% 9 $143,841 $812 $453 14% 10 $307,569 $1,728 $559 14% 11 $945,903 $736 $709 20% 12 $176,877 $1,961 $605 19% 13 $334,637 $1,949 $348 16% 14 $415,415 $751 $463 17% 15 $359,730 $590 $440 18% 16 $200,225 $1,267 $448 17% 17 $258,952 $494 $646 18% 18 $201,032 $1,369 $420 13% 19 $24,416 $1,436 $740 29% 20 $26,399 $89 $471 14% 21 $199,801 $776 $487 21% 22 $196,123 $805 $372 14% 23 $98,316 $603 $557 16% 

* Rates are based on total 2008 Medicare home health payments. ** Characters in bold indicate payment characteristics at least twice the national average. Source: Office of Inspector General analysis of 2008 Medicare home health claims. 
 APPENDIX B 

Home Health Providers in the Miami-Dade County and the 23 Counties That Were Paid At Least Twice 

the National Average for Three or More of the Five Payment Characteristics We Reviewed 

Number of Providers With Three or More Payment 

Characteristics At Least Twice the National Average 

County 

Three 

Characteristics 

Four 

Characteristics 

Five 

Characteristics 

Total Number of Providers 

With Three or More 

Payment Characteristics At 

Least Twice the National 

Average 

Total Number of 

Providers 

Miami-Dade 4 56 248 308 335

1 12 60 164 236 399

2 7 13 18 38 87

3 0 0 1 1 1

4 2 7 22 31 98

5 0 0 1 1 2

6 0 0 1 1 1

7 1 2 5 8 36

8 1 0 5 6 11

9 1 6 10 17 46

10 1 0 0 1 1

11 0 1 6 7 14

12 10 74 81 165 328

13 0 0 1 1 3

14 0 0 1 1 3

15 0 0 1 1 3

16 1 1 1 3 6

17 0 0 1 1 6

18 0 0 1 1 5

19 1 0 0 1 1

20 1 0 0 1 1

21 0 0 1 1 3

22 1 8 9 18 39

23 0 0 1 1 3

Total 

(24 Counties) 43 228 579 850 1,432

Source: Office of Inspector General analysis of 2008 Medicare home health claims.

O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 17 
.. A P PEN 0 x .. C 

~~',R\'ICes,~ 

(L DElAJT OF HEALTH & UllAN SERVICES
 

Centers for Medicare & Medicaid Seivices 

Administrator 

Washington, DC 20201 

OCT 2 7 2009
 DATE: 

TO:	 Daniel R. Levinson
 

Inspector General
 

FROM:	 Charlene Frizzera 

AcUng Administrator 

SUBJECT:	 Officeof Inspector General Draft Report: "Aberrant Medicate Home Health 

Outlier. Payment Patterns in Miami-Dade County and Other Geographic Areas in 

2008," (OEI-04-08-00570) 

Thank you for the opportunity to review and coml1ent on the above referenced Ofñce of 

InspectorGeiieral (OlG) draft report. The Centers forMedicare & Medicaid Services (CMS) 

appreciates the 	 effort and resources the OlG has invested to research and report on Medicare's 

home health benefit. CMS has been closely monitoring this issue. 

The eMS has taken steps to address widespread abuse of outlier payments to Medicare certified 

home health agencies (HHAs) in Miami-Dade Cowity, Florida. CMS allows outlier payments 

for situations thatoeciir infi'eqliently within a normal case-mix. However, there are more than 

300 HHAs in South Florida that haVe come to rely upoiioiitlier payments as a predominant part 

of their overall reimbursement. 'I'he outlier payments in Miami are approximately 58 percent 

(2007 data) of the HHAs overall reimbursement, the highest percentage of outlier payments in 

the country, compared to a national outlier payment of6 percent. 

The outlier payment was never intended. to be such a large.partofHHA reÌJl1butsenient. To 

address this problem,CMShas taken a number of steps:. (1) Suspending FIHAs with high 

amounts of outlier payments; (2) E,nhancjng vis.is tobenef;cia1'es in their homes to verify that 

the beneficiaries aûalify forthe benef1;.and (3) Utílzing auto"deniaI edits for beneficiaries who 

do not qualify for the hOl1e health benefit. 
 eMS will c.ontinue tøperfòrl1 ongoing beneficiary 

and physician interviews, as weLl as onsÌte visIts to HEAs in Miami-Dade, which 	 can re.$ultin 

edits, revocation, deaotivation, and other actions. 

Additionally, in 2007, CMS developed an enrollment demonstration pro.jeet for HIIAs in other 

geographically.high-risk areas of the country (California and Texas) to address high-risk services 

and providers. This demonstration involved strengthenÍ1lg initial provider and supplier 

ehrollmentand revalidation of enrollm~nt to prevent potentially fraudulent providers from 

entering the Medicare program. The demonstration also incorporated criminal background 

checks of owners and managing employees into the providerenrollmetlt process, Although 

criminal background checks have not yet produced substantial results, mandatory reenroLlment 

OEI.04.08.00570 ABERRANT HOME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI.DADE COUNTY AND OTHER AREAS 18 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 19 

APPENDIX~C 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 20 

APPENDIX~C 
APPENDIX~C 

 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 21 
 O E I - 0 4 - 0 8 - 0 0 5 7 0 ABERRANT H OME HEALTH OUTLIER PAYMENT PATTERNS IN MIAMI - DADE C OUNTY AND OTHER AREAS 22 

 ACKNOWLEDGMENTS 

This report was prepared under the direction of Dwayne F. Grant, 

Regional Inspector General for Evaluation and Inspections in the 

Atlanta regional office. 

Mary-Elizabeth Harmon served as the team leader for this study, and 

Gerius Patterson served as the Lead Analyst. Other principal Office of 

Evaluation and Inspections staff from the Atlanta regional office who 

contributed to the report include Jaime Durley. Central office staff who 

contributed include Rita Wurm; Robert A. Vito from the Philadelphia 

regional office also contributed.