Personal Care Services Under Scrutiny


On November 15, 2012, the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) issued a report titled “Personal Care Services: Trends, Vulnerabilities, and Recommendations for Improvement,” which included a response from the Centers for Medicare and Medicaid Services (CMS). The report follows up on numerous OIG audits since 2006 of Personal Care Services (PCS) provided under state Medicaid programs, documenting numerous instances of improper payments and outright fraud. The OIG’s report details the myriad ways in which PCS are vulnerable to fraud and abuse, and urges CMS to promulgate additional regulations to curb PCS fraud and compensate for the lack of comprehensive and effective regulation of PCS at the state level.

What are Personal Care Services?

PCS consist of nonmedical services which support activities of daily living, such as bathing, dressing, light housework, money management, meal preparation, and transportation. PCS are provided under state Medicaid programs to persons who, without such services provided in the home, would likely be institutionalized. The Medicaid beneficiaries who generally receive PCS are elderly, infirm and/or disabled. CMS’s financial interest in reimbursing providers for PCS is that the alternative –  institutionalization – would be much more expensive.

What Issues Did the OIG Find?

Since 2006, the OIG has conducted 23 audits of PCS which have consistently found payment, compliance, and oversight vulnerabilities, as well as quality-of-care concerns.  Overpayments identified in some of these audits resulted from fraudulent practices such as:

  • Beneficiaries accepting cash or other benefits in exchange for participating in fraud;
  • For beneficiaries who were reimbursed directly for PCS, several such beneficiaries claimed services that were never provided, forged the checks, and deposited them into their own bank accounts; and
  • Unqualified attendants providing grossly inadequate care, such as abandoning a patient in the subway when the attendant’s shift was up.

Inadequate Controls to Prevent PCS Billing During Beneficiary Hospitalization

A review of five states found problems with the states’ claims payment systems, including unsuccessful pre-payment edits, which could have contributed to an estimated $11 million in potentially improper payments over a three-month period.

OIG Recommendation: CMS should: (1) identify a list of needed controls and claims edits to prevent inappropriate PCS payments during periods when beneficiaries are receiving institutional care; (2) require states to identify specific safeguards to prevent the fraud schemes highlighted in the OIG report; and (3) take action to provide states with data suitable for identifying overpayments for PCS when beneficiaries are institutionalized.

Lack of Consistency Across State Medicaid Programs’ Qualifications Requirements

The OIG found that, across the nation, 301 different set of state qualifications for PCS attendants exist.  This unwieldy variation in qualification requirements results in great difficulty in ensuring compliance with the requirements.

OIG Recommendation:  The OIG recommended that CMS enact federal regulations that set minimum qualifications for PCS attendants.

Billing Policies that Impair Program Integrity Efforts

The OIG identified two distinct problems with states’ billing problems:

1.   PCS claims often do not specify the dates on which the services were actually provided; and

2.   PCS claims do not identify the attendant who provided the services.

Some states allow PCS agencies to submit bills through “span billing,” in which the provider submits one single claim requesting payment for multiple instances of PCS provided over a range of dates without actually specifying on which dates the services were provided.  The OIG found, under span billing, claims for services in excess of 24 hours a day for an individual beneficiary, claims for impossibly or improbably large volumes of services, and claims that conflict with each other (e.g. a PCS attendant purports to provide many hours of services to multiple beneficiaries on the same date or to beneficiaries whose geographical distance would prevent the feasibility of such services).

In addition to allowing span billing, some states also allow claims which don’t identify the attendant providing the services.  Even more problematically, some states allow the beneficiaries not only to select the attendant, but the states reimburse the beneficiary with the expectation that the beneficiary will pass the payment along to the attendant or PCS agency.  Finally, the OIG also found overpayment issues in states which allowed a beneficiary’s family member to serve as his or her PCS attendant.

OIG Recommendation:  The OIG recommended that CMS require states to:  (1) either enroll all PCS attendants as providers or require all PCS attendants to register with their state Medicaid agencies and be assigned a unique identifier; and (2) require that PCS claims specify the dates when services were performed and the identity of the attendant rendering PCS services.

CMS Response

CMS largely turned down the OIG’s recommendations to take affirmative action to combat Medicaid fraud in the provision of PCS.  CMS did say that it would provide guidance to states and recommend that they implement some suggestions, but CMS refused to work to enact legislation actually requiring states to meet any additional criteria.  In its only truly agreeable response to the OIG recommendations, CMS did indicate that it will work with the Medicare and Medicaid Coordination Office to identify additional data-sharing approaches with states for dually eligible beneficiaries to prevent overpayments for PCS claims.

Looking Ahead

Even in the absence of new federal regulations, the OIG’s report makes clear that both federal enforcement authorities and State Medicaid Fraud Control Units are focused on PCS fraud. PCS providers should expect an uptick in government investigations, and should position themselves favorably in this new enforcement environment by proactively implementing the OIG’s recommendations. PCS agencies should conduct their own internal audits focused on some of the areas of concern identified by the OIG, such as conducting checks to match up the dates of services with a patient’s hospitalizations or auditing an attendant’s time records to look for excessive amount, frequency, and duration of services provided and the geographic feasibility of providing those services.  PCS agencies should consider including information on claims that is not currently required, such as the identity of the attendant providing services and the dates of such services. Taking such measures voluntarily will place the PCS provider in a favorable light if it is ever the subject of government scrutiny, as many PCS providers should expect to be in the coming years.

For more information, contact Jennifer Weaver, Colbey Reagan, Anca Adams, or any member of Waller’s Healthcare Department at 800.487.6380

The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.