Senate committee accuses companies of 'gaming of Medicare'

WASHINGTON -- Three home health care companies manipulated the Medicare system by charging for unnecessary services, according to an investigation released Monday by the Senate Finance Committee.

"The gaming of Medicare represents serious abuse of the home health program," said Sen. Max Baucus, D-Mont., the committee's chairman, in a statement. "Elderly patients in the Medicare system should not be used as pawns to increase a company's profits. Especially in these tough economic times, taxpayers simply cannot afford for their dollars to be wasted on unnecessary care."

Investigators cited internal memos showing that three of the nation's largest home health care companies told employees to increase the number of therapy sessions a patient received in a 60-day period.

"The home health therapy practices identified at Amedisys, LHC Group, and Gentiva at best represent abuses of the Medicare home health program," the report states. "At worst, they may be examples of for-profit companies defrauding the Medicare home health program at the expense of taxpayers."

A fourth company, Almost Family, was investigated, but it was not cited in the report as gaming the system to increase payments.

The report follows an increase in Medicare fraud investigations as the Obama administration tries to control growing health costs. USA TODAY reported in August that health care fraud investigations were on pace to increase 85% over last year.

Payments for 60-day care sessions jump significantly when a patient receives six or 10 therapy visits, compared with much smaller increases from one therapy visit to two, according to the Centers for Medicare and Medicaid Services. For example, in 2008, the payment for a patient with five visits in 60 days was about $700 less than a person who received six visits. The payment jumped again after 10 visits, CMS records show. The agency found that providing 10 visits instead of nine increased reimbursement by an average of 97.5% in 2007.

LHC Group agreed to pay the federal government $65million Friday after being accused of false home health care billings to Medicare. The company maintains it has done no harm.

Amedisys and Gentiva also maintained their innocence. "We stand by our company's integrity, ethics and patient care practices," Amedisys said in a statement.

Gentiva said it "receives payment within the standards set forth" by the Medicare system.