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...