When it comes to home health care agencies, theft and fraud are two major areas of concern. As a high risk for your home health insureds, it is essential that they make every effort to prevent theft and fraud from occurring, not only for the well-being of their clients, but to uphold their business’s reputation.

The risk of theft occurring is increased specifically for home health agencies as they have the ability to provide care services at the homes of their clients. An employee is not supervised and monitored on every shift as a person would be in an office setting. The employer must instill an increased level of trust and discipline for employees to handle situations as professionals and as individuals.

When fraud claims occur at a home health agency, more than likely it was due to the incorrect billing of Medicare by the agency owner. The Senior Medicare Patrol (SMP) says that, “An estimated $250 million is lost to purposeful health care fraud each year.” With this in mind, it is very important that clients choose the correct home health agency for themselves or for their loved ones.

According to the SMP, a few examples of fraud that may occur at a home health agency include:

  • Billing incorrectly, specifically –
    • Billing Medicare for patients who do not qualify as someone who is *homebound by Medicare’s standards.
    • Billing for unnecessary care or care that was not provided at all.
    • Billing the client a co-pay when Medicare does not charge co-pays for services other than for medical equipment.
    • Faking patient records with incorrect medical history.
    • Bribing a doctor to classify someone as *homebound per Medicare’s standards.

To help your insureds prevent theft and avoid fraud, advise them to try the following:

  1. Stress a strict no tolerance policy for theft, fraud and related behavior. This policy should be included in their employee handbook and emphasized during training and continued education. Get help with your personnel policies/employee handbooks in our Business Services section.
  2. During the hiring process, your insureds should require mandatory pre-employment background checks.IntelliCorp, a provider of comprehensive risk management solutions, explains that      background checks can “help your company mitigate risk for candidate behaviors such as criminal activity, fraud, embezzlement and abuse.” IntelliCorp describes background checks as a company’s “first line of defense.”
  3. Discuss with your insured how their Commercial Crime insurance will respond in the event of a claim, so they are aware of the type of protection they have when dealing with employee theft, forgery or alteration, and fraud.  Coverage can vary with each insurance carrier, so it is important that the client understands how their policy will respond in the event of a claim.
  4. In the event that your insured has to file a claim for theft or fraud, prepare them with how to deal with the press. By taking all the right steps –their due diligence– to protect the public before a claim occurs, your insured can be better prepared to help mitigate any further damage to their public image if an incident does occur.
  5. Discuss implementing a risk management plan to prevent such claims or as a solution to eliminate further occurrences.