Despite years of warnings, Minnesota's publicly supported home health care system remains vulnerable to fraud and mismanagement. The growing, multimillion-dollar industry needs tighter controls and better oversight.
A recently concluded Star Tribune series, "Unchecked Care," by reporters Chris Serres and Glenn Howatt, documented ongoing issues, including millions of dollars in fraudulent billing and limited prosecution and recovery of stolen funds.
And although the Minnesota Department of Human Services (DHS) says it has made changes to improve oversight, it's still far too easy for unscrupulous providers to scam the system. More steps must be taken to improve transparency, accounting, investigations and prosecution.
The news series reported that caregivers bill the state for millions in care that is never provided, but only a fraction of that fraud is ever prosecuted. And even some cases that are successfully prosecuted don't result in commensurate reimbursement to the state.
For example, in one case, a Brooklyn Park company billed the state $2.7 million for more than 10,000 hours of services that were never provided. Still, the owner was ordered to pay just $50,000 in restitution.
In December alone, charges were filed in two high-profile cases of alleged financial fraud involving home health and child care operations. In one, a Fridley couple and two accomplices were accused of cheating the state out of about $4 million by falsifying work records.
In another case, the former mayor of Stillwater was charged in federal court with fraudulent accounting that helped a metro-area home health company conceal millions in tax liabilities. The two brothers who own the company were arrested by federal agents and indicted on a Medicaid fraud charge.
These are not isolated incidents or recently discovered problems. In 2009, a report by the state's legislative auditor concluded that the system is "vulnerable to fraud and abuse." Troubling findings from that review included overbilling and incomplete record keeping by agencies. While that study prompted some DHS and legislative reforms, those efforts haven't gone far enough to provide adequate oversight for the $618 million, 30,000-employee industry.
A 2010 update by the legislative auditor found that the DHS had added periodic supervisory checks, some worker training and improved review of provider claims. Last month, the DHS began conducting surprise spot-checks on new home care providers. This month, the agency will begin fingerprint background checks for home care givers.
Still, additional steps can be taken to ferret out and prosecute more routine forms of deception — including situations in which caregivers collude with patients or relatives to claim more hours of service.
A handful of states now use recently granted federal authority and funding to analyze Medicaid claims. But Minnesota has yet to apply for that option.
And some states require electronic verification via GPS or smartphones when a worker visits a home, eliminating the need for paper time sheets that are easier to falsify.
The unfortunate irony is that the home health care industry has grown, in part, because it can cut health care costs. It costs Medicare nearly $2,000 per day for a typical hospital stay and $559 per day for a typical nursing home stay. That compares with an average of just $44 a day for home care, according to the National Association for Home Care & Hospice. A study of home-based care for VA patients found a nearly 14 percent reduction in cost over several years.
Home health care is needed now more than ever as the American population ages. Allowing people to receive the support they need at home can be more cost-effective, while also being better for their mental and physical health.
Yet as the Star Tribune series revealed, more must be done to balance those benefits with responsible stewardship of the public purse.
