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Healthcare Business Operations: When Medicare Knocks, You Better be Home!

by admin on June 6, 2017 No comments

“Who can it be knocking at my door?
Make no sound, tip-toe across the floor.
If he hears, he’ll knock all day,
I’ll be trapped, and here I’ll have to stay.”                                                                                      -Men at Work; Colin Hay, Songwriter

By: Dave Davidson

A recent decision by a Health and Human Services appellate panel emphasizes how strictly the government will interpret its rules and the disingenuous results that can sometimes follow when healthcare business operations best practices are less than optimal.  Although the case referenced below involves a home health agency, the panel’s application of the rules applies to all Medicare providers.  The resulting loss of the agency’s participation in Medicare serves as a sobering reminder that total compliance with all conditions of participation is crucial.

Vamet Consulting & Medical services was a Medicare-enrolled home health agency based in Houston, Texas.  On July 14 and 15, 2014 the company conducted training for its office staff at its primary location.  The training meant that all the agency’s staff would be in the back of the office, either in training or working, so the company locked its front door. 

Unfortunately for Vamet, an investigator under contract with CMS made an unannounced visit to the Vamet office during the early afternoon of July 14.  The investigator noted that the door was locked, and no one responded when he knocked.  He looked in through the door, but could not see any activity.  There was a sign on the door, noting the agency’s office hours, the telephone number, and instructions to call 911 in the event of an emergency.  The investigator left without calling the office telephone number.

The investigator returned the next day, in the late morning.  Since the staff was still working or training in back, the door was once again locked.  Again, no one answered his knocks.  The investigator did not call the office number.  However, he took photographs of the site and reported to CMS that the home health agency was not operational.

The investigator’s report went first to the Medicare intermediary, then to CMS.  Upon receipt of the report, CMS immediately revoked the agency’s participation in Medicare, agreeing that the home health agency was not operational.  Vamet appealed that action, but an Administrative Law Judge upheld the decision, without a fact-finding hearing.  Vamet appealed that decision to the HHS appellate panel.

On March 30, 2017, the panel handed down its final decision, affirming the revocation of Vamet’s participation in Medicare.  The panel noted that Vamet had sufficiently proved that it was properly stocked and equipped, with healthcare business operations fully ramped and that it was adequately prepared to submit claims to Medicare.  In fact, there was no evidence whatsoever that the investigator would have found any deficiencies had he been admitted to the office.

However, the panel held that Vamet could not prove the threshold requirement that it be operational, since the door was locked and no one answered.  The panel noted that the presence of the phone number was not sufficient, since the sign did not say to call the number to gain access.  That instruction might have made a difference, but the panel then wondered what would happen if the person seeking entry did not have a phone.  Vamet therefore lost its contract with its primary payor simply because no one answered a knock at the door!

Every provider enrolled in Medicare should take note of this decision and focus on healthcare business operations best practices.  Loss of the ability to participate in Medicare is usually the death penalty for a provider.  Every provider’s Medicare Enrollment Application must be kept up-to-date.  A change in location, in leadership, or in ownership must be reported.  If there is even a slight discrepancy between the Application and what is found by an investigator, there could be harsh penalties, jeopardizing continued participation in the program.

CMS requires that a Medicare provider “has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.”  A lot of effort goes into making sure those conditions are met through healthcare business operations best practices.  Just make sure the government can get in to your office so you can prove it.

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