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Home Health Care

Opening up a new home health care business can be a new and exciting process, but what about home health care accounting? Many home health care business owners struggle to properly take care of the accounting side of their business, which is where JS Morlu can help.

Our healthcare practice serves two sets of clients: Government and Private Sector. We support the work of healthcare practitioners to get them audit ready and ensure that their claim submissions are in compliance with Medicare and Medicaid Guidelines.

Why Do I Need Proper Home Health Care Accounting?

In 2005, Congress authorized the Recovery Audit Contractor (RAC) program to do a demonstration in California, New York, Florida and three other states. The purpose – to discover areas of fraud and waste and recover overpayments made by Medicare due to improper coding and compliance with Medicare guidelines. The result – over $900 million in overpayments recovered and returned to the Medicare Trust Fund.

Additionally, Section 302 of the Tax Relief and Health Care Act of 2006 made the Recovery Audit Program permanent. Congress authorized the RAC program to be rolled out to all 50 states and Puerto Rico in 2010. The Medicare audit of all beneficiaries of Medicare payments (i.e. – those who file claims with Medicare) is here to stay. If your practice is out of compliance, it could end up costing you thousands of dollars.

Anyone who files claims with Medicare is all affected. This includes the following: physicians, hospitals, home health agencies and durable medical equipment providers. If you fall into one of the above categories, expect a notice soon from the contractor in charge of the audit in your region. They will not tell you what they are looking for. That is left up to you.

What Happens if the Accounting for My Home Health Care Business is Wrong?

The RACs are compensated on a contingency basis based on the amount of overpayments that they find. They are going to be aggressive. Overpayments will have to be returned and Medicare isn’t going to send you an invoice and wait for the money. They will just take a portion of your current and future claims payments until the overpayment is paid in full. In extreme cases, Medicare may suspend your claim privileges all together. Protect yourself by following a few easy procedures:

  • Conduct an internal assessment of submitted claims to make sure they follow Medicare guidelines. You, your staff, or a third-party auditor can do this. However, a qualified third-party auditor, like JS Morlu, may be the best option as this allows for someone outside your practice to give you a second opinion. If you choose to do it yourself, look for claims that have been denied in the past and review the RAC’s website.
  • Let a certified coder review a sample of your files and help you identify any pattern of inconsistent or improper coding. Again, a third-party audit service is an excellent option. A qualified auditor should have certified coders on staff, preferably with government auditing experience as well.
  • Comply with Medicare’s request for medical records in a timely manner. Failure to do so may cost you the right to appeal any decisions by the RAC that you disagree with.
  • Implement corrective actions to ensure compliance with Medicare guidelines prior to the RAC visit to your office. The sooner you do this, the less money you will cost yourself when the RAC finally gets around to you.

If you choose to use a third-party auditor to assist you, they should provide you with a report on areas for improvement as well as consult with you on other areas of compliance as well.

How Can JS Morlu Help?

You don’t have to fear the RAC with the right preparation and implementation of processes. Some good may come out of your audit. During the same demonstration in California, New York, Florida and three other states, $38 million in underpayments to providers was made. You may find areas where you have been underpaid, so it isn’t all bad news. JS Morlu offers a wide variety of accounting for home health care business, leading to full compliance with regulatory agencies, including the following:

  • Internal Assessment of Submitted Claims
  • Compliance Reviews of Selected Files
  • Develop and Implement a Corrective Action Plan to Meet Medicare Guidelines
  • Audit Liaison for Recovery Audit Contractors
Who Does JS Morlu Serve?

JS Morlu’s healthcare accounting practice is not limited to any one sector. Instead, we help individuals across various healthcare sectors gain control of their accounting function. No business is too small as we have experience assisting small group home practices to large private practices. Common healthcare businesses that JS Morlu helps includes:

  • Home Health Care
  • Crisis Management
  • Group Home Care
  • Private Medical Practice
  • Government Health Care Provider

What if I Need an Audit?

Our Audit and Assurance Practice provides specialized healthcare audits. Our team is comprised of nurse reviewers who are experienced in analysis of ICD-9 and CPT-4 coding as it impacts hospital billing audit. Our practice team also has more than 10 years of experience in healthcare management and billings.

We partner or subcontract with Recovery Audit Contractors and conduct audit work for direct state health agencies and the U.S. Department of Health and Social Services. JS Morlu proudly offers you the following audit services:

APC Validation Audits

Many factors can affect the correct assignment of APCs. APC audits include a thorough review and recoding of the medical records ensuring coding accuracy and the reasonableness of services rendered. There can be multiple APCs on a single claim and many factors could affect the correct assignment of APCs.

CCI violations, correct usage of modifiers and current knowledge and expertise with all of the rules pertaining to pass-through items can also be an assignment of the APCs. Furthermore, the service must be deemed appropriate for the treatment of the diagnosis, which is determined by Local Coverage Determinations (LCDs) and Local Medical Review Policies (LMRPs).

DRG Validation Audits

The audit process consists of a thorough review and recoding of the medical record in order to validate the procedures and diagnoses coded that resulted in the DRG billed by the provider and reimbursed by the payer. Subsequently, through the use of nationally accepted technology, we recode and reprice the claim based upon the audit results, thereby providing clients with accurate payment validation information for each claim.

Through the continuous tracking and trending of its state of the art database, we are able to optimize our audit process and results by focusing on historically abusive facilities or incorrectly coded/abused DRG codes.

RUG Validation Audits

The billing responsibility for the entire package of care that residents receive during a covered Part A SNF stay is conferred on the SNF per the consolidated billing requirement. Consolidated billing also provides coverage for the physical, occupational and speech therapy services received during a non-covered stay. A RUG (Resource Utilization Group) score is determined by the completion of the Minimum Data Set (MDS) which calculates the RUG score.

We conduct a comprehensive review of all claims where the costs are based on a RUG score. A detailed review of the complete medical record and associated MDS allows our team to determine if the billed RUG score is valid. In the event the review determines that an incorrect RUG score was billed, our team will report the valid score and report the reason the change was necessary.

Inappropriate Admission Review (IAR)

There are times when hospitals admit patients on an inpatient basis as opposed to providing an alternative and more appropriate level of care in observation or the outpatient department. This costs Medicare and commercial payers hundreds of millions of dollars. Our team identifies and reviews specific claims that have a high potential for overpayment based on the level of care, severity of illness, and intensity of service provided.

We present payers with an opportunity to identify savings for inappropriate admissions on inpatient claims, the ability to reconcile overpayments based on inappropriate level of care, a targeted review of admissions with high potential for inappropriate level of care, and effective post-payment cost control for inpatient large facility bills with minimum repercussions.

Medical Chart/Hospital Bill Audits

A medical chart audit validates proper payment of hospital bills for payers by conducting a line-by-line comparison of the itemized bill to the corresponding medical records to verify that all goods and services that were billed were both prescribed and administered in the specific levels and quantities specified.

The audits aimed at claims reaching certain charge or catastrophic thresholds. Payers also may identify hospitals that have shown an increase in charge base or when contractual changes have resulted in more carve-outs or pass-through charges.

Despite computer-assisted charting and charge functions, there still is great potential for identification of billing errors due to lack of appropriate crediting, missing physician orders and internal hospital protocols that are not documented or ordered by the physician. Our audit programs are specifically designed to closely scrutinize and assist in the control of these costly errors.

Next Steps

Home health care accounting is a critical part of running a business that many providers neglect. Luckily, JS Morlu can take this burden off your plate, giving you peace of mind that your accounting function is in compliance with regulatory agencies. Moreover, if your state requires an audit, this needs to be completed by an independent third party, like JS Morlu. Skip the hassle of searching around for a qualified accountant and let JS Morlu help you. Reach out today for a consultation to see how we can benefit you and your home health care business.