On March 9, 2015 the Office of Inspector General (OIG) for the Department of Health and Human Services announced the publication of a new report documenting the OIG’s audit of “personal care services” provided in New York State between 2007 and 2011 (this Report followed on the heels of a 2009 Report focused on personal care services in New York City which resulted in a $70 million dollar settlement with the Federal government in 2011). Based on the OIG’s audit of personal care services claims between 2007 and 2011, the OIG estimated that the State improperly claimed at least $12 million in Federal Medicaid reimbursement for high-dollar continuous 24-hour personal care services that did not meet Federal and State requirements.
What are “personal care services” and what are the Federal (and state) requirements governing their coverage under the Medicaid program?
In general, personal care services are services provided to eligible Medicaid beneficiaries that allow these individuals to stay in their own homes and communities, rather than living in an institutional setting. These services may include anything that enables individuals with disabilities and chronic conditions to accomplish activities of daily living (ADL) or instrumental activities of daily living (IADL). ADLs are activities a beneficiary engages in to meet fundamental needs on a daily basis (e.g. eating, bathing), while IADLs are day-to-day- tasks that allow can individual to live independently (e.g., light housework, meal preparation.) Section 1905(a)(24) of the Social Security Act authorizes personal care services under a Medicaid State plan. In particular, the term “medical assistance” in the Social Security Act is defined to include:
“(24) personal care services furnished to an individual who is not an inpatient or resident of a hospital, nursing facility, intermediate care facility for the mentally retarded, or institution for mental disease that are (A) authorized for the individual by a physician in accordance with a plan of treatment or (at the option of the State) otherwise authorized for the individual in accordance with a service plan approved by the State, (B) provided by an individual who is qualified to provide such services and who is not a member of the individual’s family, and (C) furnished in a home or other location”
Federal regulations at 42 CFR § 440.167 define personal care services as:
“services furnished to an individual who is not an inpatient or resident of a hospital, nursing facility, intermediate care facility for individuals with intellectual disabilities, or institution for mental disease that are—
(1) Authorized for the individual by a physician in accordance with a plan of treatment or (at the option of the State) otherwise authorized for the individual in accordance with a service plan approved by the State;
(2) Provided by an individual who is qualified to provide such services and who is not a member of the individual’s family; and
(3) Furnished in a home, and at the State’s option, in another location.”
The outdated and much maligned State Medicaid Manual provides little additional information, but CMS does offer several relevant resources on their website. In general, however, for a State to provide coverage for personal care services it must specify this coverage in its Medicaid State Plan with the Federal government or do so under a Medicaid demonstration or a waiver program. Because personal care services are typically an optional benefit, they can vary greatly by State and within States depending on the authority upon which they are authorized.
Under its Medicaid State plan, New York offers continuous 24-hour personal care services, which it defines as “the provision of uninterrupted care, by more than one person, for a patient who, because of his/her medical condition and disabilities, requires total assistance with toileting and/or walking and/or transferring and/or feeding at unscheduled times during the day and night.” Section 505.14 of Title 18 of the New York Compilation of Codes, Rules and Regulations sets forth detailed requirements for the provision of personal care services in New York State including a requirement for a “independent medical review” when continued personal care services are provided.
It is largely this “independent medical review” state-based requirement that caused the OIG to disallow the funds claimed by New York state for personal care services, not a failure to comply with any Federal standard.
As CMS notes, “PCS are typically provided as an optional benefit under individual State Medicaid programs, and PCS coverage and payment rules can vary greatly among Medicaid programs… Such variation can be confusing for PCS providers. PCS providers must adhere to the rules of each individual Medicaid program, and providers that submit improper claims for payment can face serious consequences, including civil, monetary, and criminal penalties.” In examining past OIG disallowances for personal care services the causes seem to vary widely, including:
- In a number of cases the OIG has disallowed reimbursement for personal care services on the basis that the qualifications of personal care attendants were not documented (a Federal requirement);
- in other cases, such as in New York state, personal care services were not provided in compliance with State requirements;
- personal care services have also been disallowed when OIG audits have found that personal care services were provided during persiods in which the beneficiaries were in institutional states (again, a Federal requirement.)
The audit report in New York is just one in a long line of disallowances for personal care services provided in the Medicaid program. As these services continue to receive strict scrutiny by the OIG, we imagine future audits are not far down the road.