Audit says home health care companies overbilled Mass. Medicaid by $23m

The state’s Medicaid program was routinely billed for home health care services that were never provided or were not medically necessary. Providers submitted documents with missing dates and signatures. Sometimes basic information like a patient’s medical history was nowhere to be found.

These and other alleged violations were uncovered in an audit of nine agencies that do business with the state’s Medicaid program, called MassHealth — part of an effort by Governor Charlie Baker’s administration to rein in soaring spending on home health services.

Preliminary results of the audit, released to the Globe after a public records request, show the companies are accused of scores of violations over the course of three months in 2015, and some allegedly overcharged the state by millions of dollars.

The companies contract with the state to provide home health care, which includes nursing care, physical and occupational therapy, and other services to MassHealth members.

The audit records say that Nizhoni Health Systems of Somerville improperly billed the state for an estimated $8.7 million, and Avenue Homecare Services of Lawrence overcharged by nearly $4.6 million. Worcester-based Century Homecare wrongly billed for $3.8 million, and Maestro-Connections Health Systems of Auburn overcharged by more than $2.5 million, the records show. The state plans to recoup the overcharges from each company, pending appeals.

Also cited for improper billing were: Gentle Home Care Services of Lawrence, for about $700,000, Beyond Healthcare Agency of Andover for $381,000, Able Home Care of Lynn for $269,000, and Comfort Home Care of Methuen for about $78,000.

Executives at all of the companies reached by the Globe said they are appealing the audit findings and chalked up most of the violations to minor paperwork issues that were overblown by state auditors.

“There’s mistakes here, I understand that,” said Debra Walsh, administrator at Able Home Care. “[But] how did a missing address escalate to a sanction? That doesn’t make any sense.”

Walsh and other home health executives of companies cited in the audit said they’re sending state officials additional documents that they believe will clear them of many of the alleged violations.

“We are hopeful that MassHealth will look favorably upon our reply to these preliminary findings,” a spokeswoman for Nizhoni said in a statement.

Gentle Home Care administrator Richard Gaudet said his company also has submitted “evidence contrary to [MassHealth’s] findings” and is awaiting a response.

James Njoroge, chief executive of Century Homecare, said the audit revealed what he considers “minor” violations, such as a late signature from doctors ordering services. Century stepped up its compliance efforts by the end of 2015, Njoroge said. “If the [state] were to conduct an audit for a more recent period, Century is confident that it would not find similar technicalities,” he said.

Beyond Healthcare executives said they object to the state’s calculations for alleged overcharges and said they are “100 percent in compliance” with regulations.

State auditors studied records for 25 randomly selected patients at each agency, then used a statistical formula to calculate an estimate for improper billing, which they called “extrapolated overpayment.”

Companies accused of overbilling the state were required to submit correction plans and pay fines ranging from about $3,000 to $10,000.

All together, nine agencies were accused of overbilling the state by nearly $23 million. But officials provided the names of only eight agencies, omitting records that they said are part of an ongoing law enforcement investigation. The attorney general’s office said earlier this year that it is investigating possible fraud at several home health agencies.

MassHealth officials said they are continuing to audit other home health companies they suspect of violations. They point to a staggering increase in home health spending — 82 percent over just two years — as proof that spending must be studied and controlled. MassHealth, a $15 billion-a-year program that covers 1.8 million residents, spent more than $755 million on home health services in the fiscal year that ended June 30.

MassHealth spokeswoman Sharon Torgerson said the audits were performed by experienced professionals and are an important component of an effort to eliminate fraud, waste, and abuse in the MassHealth system.

“We remain committed to ensuring MassHealth members have access to appropriate services,” she said in an e-mail, “but in light of the rapid increase in utilization we are engaged in a thorough review of each of MassHealth’s long-term services and support programs to improve both the quality and cost effectiveness of the programs MassHealth members rely on.”

Leaders of the Home Care Alliance of Massachusetts, a trade group, said they also want to root out problems in the industry, but they raised concerns that state officials may be too focused on issues such as “filling out the wrong date or address on a form,” instead of more serious problems.

“We have yet to see the audit results for ourselves, but we’re concerned that for several agencies that are valuable provider partners to the state, the extrapolation is turning minor documentation issues into major financial consequences,” Patricia Kelleher, executive director of the alliance, said in a statement.

Diana Dungan, chief operating officer of Comfort Home Care, added that state officials are using “a broad brush . . . rather than a scalpel to help find and eliminate this waste.”

Representatives for Avenue Homecare and Maestro-Connections did not respond to requests for comment.