ILLINOIS DEPARTMENTS OF PUBLIC AID, PUBLIC HEALTH, AND HUMAN SERVICES

Program and Management
Audit of

Released: July 1999

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

To obtain a copy of the report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 East Ash Street
Springfield, IL 62703
(217) 782-6046 or
TDD: (217) 524-4646

In Fiscal Year 1998, the Department of Public Aid spent almost $52 million for home health care services for 21,095 clients in the Medicaid program. The Department of Human Services spent an additional $5 million for home health care for 998 clients in its Medicaid waiver program for people with disabilities.

There are three functional areas in Illinois’ Medicaid programs which provide home health care to four groups of clients. They are:

• General Medicaid which includes two types of clients, children who are clients of the Department of Children and Family Services ($14 million) and other Medicaid clients ($15 million) that usually receive home health care services to help them in rehabilitating from a more serious illness.
• The Katie Beckett waiver program managed by the Division of Specialized Care for Children at the University of Illinois ($22 million). Some of its clients receive intensive medical care in the home to avoid ongoing care in a specialized hospital setting.
• The Home Services Program at the Department of Human Services ($5 million). This program’s clients are people with disabilities who receive basic medical care in their homes to allow them to stay in their homes and avoid nursing home care.

In our review of the general Medicaid home health area, we found that the Department of Public Aid had not established adequate management controls to assure that home health services billed for Medicaid clients by providers are properly authorized, approved, allowable, and provided. Weaknesses include lacking computer edits and lacking management analysis and oversight. For example:

• Most home health services paid by Public Aid do not require that the care be approved prior to being provided. Sixty-four percent of home health services ($33.2 million) were billed with codes that do not require prior approval.
• For most of the care that is supposed to be prior approved, Public Aid had no computer bill processing edits in place to assure that care was approved before it was provided. Because of this, although there are Public Aid staff who review and approve patients’ care plans, approval or rejection of care plans was not considered before the bill was paid. Public Aid was in the process of implementing edits before our audit work began.
• Public Aid had no computer bill processing edits to assure that care provided without prior approval was provided within the time limits that are prescribed. For example, care can be provided within 60 days of a hospital stay without prior approval, but no edits or systems have been put in place to assure that care does not exceed 60 days or that care follows a hospital stay.
• Public Aid has done very few home health agency audits and does little analysis of paid home health claims. From July 1993 through August 1998, only 16 audits were done of home health agencies with five completed in Fiscal Year 1998. In all of the home health audits they have performed, recoveries have been made. In addition, in the home health agency reviews that we performed, we identified potential overpayments. The small number of Public Aid audits and the minimal additional analysis performed provide limited control over payments to home health agencies.

In addition, we found that the Department of Public Aid had:

• Made expenditures for non-home health services from an appropriation intended for home health services.
• Not claimed some federal matching money in relation to a program which includes home health that they jointly administer with Human Services.

We found good controls over care provided in the Katie Beckett waiver program and over home health care provided to people with disabilities. These programs are jointly administered by the Department of Public Aid and the University of Illinois for Katie Beckett and the Departments of Public Aid and Human Services for the Home Services Program for people with disabilities.

The Departments of Public Aid, Human Services, and Public Health would benefit from more sharing of information and closer working relationships. This could help the agencies to identify problems and appropriately monitor questionable home health agencies.

According to Illinois statutes, "home health services" means services provided to a person at his or her residence according to a physician prescribed plan of treatment for illness or infirmity. Such services include part time and intermittent nursing services and other therapeutic services such as physical therapy, occupational therapy, speech therapy, medical social services, or services provided by a home health aide (210 ILCS 55/2.05).

The Illinois Department of Public Aid is the agency responsible for administering home health services through the Medicaid program in Illinois. In addition to services provided through the regular Medicaid program, the Illinois Department of Public Aid also has some responsibility in managing a waiver program for technology dependent children. It is referred to as a Katie Beckett waiver and day-to-day operations are managed by the University of Illinois’ Division of Specialized Care for Children (DSCC).

The Illinois Department of Human Services enables eligible people with disabilities to receive home services through a waiver program. These services may be provided to people with disabilities who are at risk of entering a nursing home or other health care facility to remain in their own homes and communities if the cost for home care is not greater than the cost of nursing home care. Services include case management, personal assistants, homemakers, maintenance home health, electronic home response, home delivered meals, adult day care, assistive equipment, home remodeling, and respite services. Home health services, which are the subject of this audit, are only a small proportion of the total Home Services Program. The Illinois Department of Human Services also helps eligible people with AIDS to receive home services through a similar but separate waiver program.

Home health care regulation in Illinois is the responsibility of the Department of Public Health. Regulation of home health care agencies is done through a licensure process, Medicare certification, and investigations of complaints. Public Health is the federal Medicare certification agency for home health agencies in the State of Illinois. Certification allows eligible clients to have their home health care paid by Medicaid or Medicare.

Digest Exhibit 1 shows the number of licensed and Medicare certified home health agencies in Illinois for the past 3 years. Most home health agencies become Medicare-certified through the Public Health certification process. A few home health agencies (19 in FY98) chose to be Medicare certified by one of the private accrediting organizations. (See report pages 4 to 7)

Home health care expenditures have been on the increase in recent years. In Illinois, expenditures from the home health appropriation have gone from $27.6 million in FY93 up to $52.8 million in FY98. This represents an increase of over 91 percent from FY93 to FY98. Using home health services allows states to provide services to more people with the dollars available. Digest Exhibit 2 gives a graphical representation of the increase in home health expenditures during the past few years.

Digest Exhibit 3 details the types of expenditures which are covered under home health care. They are: Skilled Nursing, Physical Therapy, Occupational Therapy, Speech Therapy, and Home Health Aides. Expenditures are broken down based on our analysis of data derived from bills paid by Public Aid.

Digest Exhibit 3 also shows non-home health services expenditures which were paid from the home health appropriation for Fiscal Year 1998. Our analysis identified $690,977 for non-home health services. (See report pages 7 to 8)

GENERAL MEDICAID

The Department of Public Aid had not established adequate management controls to assure that home health services billed for Medicaid clients by providers are properly authorized, approved, allowable, and provided. Weaknesses include lacking computer edits and lacking management analysis and oversight. Digest Exhibit 4 summarizes Public Aid home health expenditures and clients by program.

Most home health services paid by Public Aid do not require that the care be approved prior to being provided. Sixty-four percent of home health services ($33.2 million) were billed with codes that do not require prior approval. For most of the care that is supposed to be prior approved, Public Aid had no computer bill processing edits in place to assure that care was approved before it was provided. Because of this, although there are Public Aid staff who review and approve patients’ care plans, approval or rejection of care plans was not considered before the bill was paid. Public Aid was in the process of implementing edits before our audit work began.

When care is not prior approved, Public Aid had no computer billing processing edits to assure that care provided without prior approval was provided within the time limits that are prescribed. For example, care can be provided within 60 days of a hospital stay without prior approval, but no edits or systems have been put in place to assure that care does not exceed 60 days or that care follows a hospital stay.

In our testing and analysis we found examples where computer edits could have caught billing problems with home health agencies. We identified 41 instances where payment was made twice to the same home health agencies for the same care for the same client on the same day. The agency changed its name and was paid for the care using both names. The agency received these payments for eight different clients. The total amount involved was $1,700. When we told Public Aid, officials requested recovery for these amounts and attempted to identify similar double payments.

We also identified two instances where home health services were provided on the same day when the client was in a hospital or nursing home. This was based on our review of FY98 case files for 100 Medicaid home health clients. The total amount involved was $83.

Although many billing irregularities could be identified with computer edits, additional management analysis should be done to identify problems. For example, during our review we identified no specific process for Public Aid to verify that services that are paid for were actually prescribed in the plan of care. In our analysis and testing we found:

• An example where a care plan was submitted and approved after the care was provided. Over $700 of services were paid for this client in excess of the care plan.
• 191 instances where Public Aid paid for more visits than the home health agencies had nursing notes to document. This analysis identified $7,895 of potential overpayments.

Public Aid has done very few home health agency audits and does little analysis of paid home health claims. From July 1993 through August 1998, only 16 audits were done of home health agencies with five completed in Fiscal Year 1998. In all of the home health audits they have performed, recoveries have been made. In addition, in the home health agency reviews that we performed, we identified potential overpayments. The small number of Public Aid audits and the minimal additional analysis performed provide limited control over payments to home health agencies. (See report pages 16 to 20)

WAIVER PROGRAMS

We found good controls over care provided in the Katie Beckett waiver program and over home health care provided to people with disabilities. These programs are jointly administered by the Department of Public Aid and the University of Illinois for Katie Beckett and the Departments of Public Aid and Human Services for the Home Services Program for people with disabilities.

Although there are generally good controls over the Home Services Program, some care plans that we reviewed had not been reviewed for several years by a physician to assure that the care was still appropriate. The Department of Human Services should assure that client care plans are reviewed and approved by the client’s physician whenever the client’s condition changes. (See report pages 24 to 27)

HOME HEALTH REGULATION

Public Health has generally done a good job of regulating home health agencies. This includes licensing and certifying home health agencies for Medicare and assuring the quality of care provided to home health care recipients by home health agencies. However, we identified some areas where improvements could be made.

Although Public Health regularly identifies deficiencies at home health agencies, neither the federal Health Care Financing Administration nor Public Health imposed any sanctions against those agencies. Both federal rules and State law allow for sanctions against deficient home health agencies.

Investigations of complaints against home health agencies that are not Medicare certified may be delayed because of a lack of funding. In our sample of complaint files, we identified two cases where complaints were not investigated in a timely manner. One complaint was against an unlicensed agency and one complaint was against an agency which was licensed but not Medicare certified. Both cases involved serious allegations related to patient care.

Finally, Public Health had not taken actions to allow certification of home health agencies to participate in the Medicaid program but not the Medicare program. Although the Medicaid only certification process is not established, Illinois Administrative Rules already contain specific provisions related to home health agencies that are Medicaid-only certified. (See report pages 29 to 49)

RECOMMENDATIONS

The audit report includes 10 recommendations including three recommendations to the Department of Public Aid and four recommendations to Public Health which are shown in the exhibit to the right. One recommendation was made to the Department of Human Services to assure that clients care plans are reviewed and approved by a physician whenever the client’s condition changes.

In addition two recommendations were made to multiple agencies: to the Departments of Public Aid, Human Services, and Public Health to continue and increase their working relationships and their information sharing to improve the management of home health care paid or regulated by State Agencies; and to the Departments of Public Aid and Human Services to pursue federal reimbursement based on the Medicaid 50 percent federal share match.

Agencies generally agreed with the recommendations. Agency responses are included after each recommendation and complete written responses are included in Appendix D of the Audit Report.

_________________________
WILLIAM G. HOLLAND
Auditor General

WGH\EW