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SUMMARY
The Office of the Auditor General has conducted a performance audit of home health care regulation and expenditures in conjunction with the National State Auditors’ Association’s multi-state audit on this topic. This audit was conducted pursuant to the provisions of A.R.S. §41-1279.03 and in response to a May 27, 1997, resolution of the Joint Legislative Audit Committee.
In Arizona, home health care includes a number of services, ranging from skilled nursing to assistance with activities such as bathing and meal preparation that are provided at home rather than in more expensive settings, such as nursing homes. Increased availability of home health care, and subsequent increases in governmental expenditures for these services, have led states to begin reassessing how home health care is provided and monitored. In 1998, Arizona and nine other states chose to participate in a joint audit of their respective Medicaid-supported home health service delivery
systems1. The states agreed to study four objectives relating to the effectiveness and sufficiency of regulation, claims payment processes, complaint investigations, and quality-of-care assurance. This report presents three audit findings that address these four objective areas.
This audit focuses on the care provided to elderly and physically disabled persons receiving services under the Arizona Long-Term Care System (ALTCS). ALTCS is one of two programs administered by the Arizona Health Care Cost Containment System (AHCCCS), which is the state agency designated by the federal government to receive Medicaid monies and to ensure provision of services to Arizona Medicaid clients. ALTCS is a capitated managed care program in which AHCCCS pays a program contractor an up-front amount per client, regardless of the number or type of services provided. The program contractor is responsible for developing and maintaining a network of home health care agencies, ensuring appropriate services are provided, and paying for provided services. To become part of a program contractor’s provider network, home health agencies must hold a state license from the Department of Health Services (DHS), be Medicare certified, and be registered with AHCCCS. In July 1998, approximately 140 home health agencies were licensed to provide services in Arizona, and 117 of these were Medicare certified.
DHS Needs to Improve
Its Licensure and Complaint
Investigations Processes
(See pages 9 through 14)
DHS’ current licensing process does not provide sufficient oversight of home health care agencies. In 1998, DHS renewed the state licenses of 43 home health agencies without first ensuring the agencies were in compliance with state regulations as required by state law. These 43 agencies comprised approximately 37 percent of Arizona’s Medicare-certified home health agencies. In addition, as of August 1998, DHS had 70 overdue home health agency Medicare inspections.
DHS also did not meet its required time frames for investigating approximately two-thirds of the complaints against home health agencies it received in fiscal years 1997 and 1998. Untimely investigations have limited DHS’ ability to substantiate complaints and resulted in a backlog of 38 complaints as of August 1998. However, DHS has since eliminated this backlog by making complaint investigation a priority.
Finally, DHS does not consistently use its enforcement authority to take progressively stronger action when home health agencies do not correct problems identified during inspections or complaint investigations. DHS is required to allow home health agencies cited for state deficiencies to submit plans of correction. However, in some instances, this approach does not appear to adequately ensure future compliance. Auditors reviewed licensing and complaint files for a sample of 27 home health agencies and found that 8 were cited for repeated violations during a period of 9 to 18 months. However, DHS only required the agencies to submit another written plan of correction. It did not use other tools at its disposal, such as fines or bans on serving new clients, to ensure that problems were corrected.
AHCCCS Needs to Ensure Procedures
Governing Appropriate and Timely Claims
Payments Are Consistently Followed
(See pages 15 through 18)
Current procedures may not adequately ensure that payments to home health agencies are appropriate and timely. A review of claims payment procedures at Maricopa County Managed Care Systems (MMCS), the State’s largest program contractor serving the elderly and physically disabled, found problems with the appropriateness of some payments. The review revealed that MMCS has paid for some home health services that were not included in an appropriate client care plan. Care plans, which are authorized by the client’s attending physician, help ensure client needs are met by detailing the type and frequency of services to be provided. In addition, weaknesses exist that can allow MMCS to make payments for
services that were not provided. A review of 1,236 MMCS claims revealed 15 payments for services that were not documented as being provided. Finally, there are problems with MMCS’ untimely claims payments. In April 1998, AHCCCS found that 70 percent of the claims for home- and community-based services were not paid within the required time period. AHCCCS has since directed MMCS to take corrective action, and MMCS has made improvements.
Time constraints precluded a wider review encompassing more of the program contractors. However, because the same requirements apply to all program contractors, similar attention to these issues may be needed beyond MMCS. While AHCCCS is not immediately affected if contractors pay claims that are not appropriately authorized, inappropriate payments can ultimately affect capitation rates. These rates are determined annually and include consideration of the program contractors’ expenses for services.
AHCCCS Should Improve Efforts
to Further Ensure Quality Care
(See pages 19 through 24)
The various components of Arizona’s managed care system each have a role in ensuring quality home health services are provided; however, improved implementation of existing policies and better coordination of efforts is needed. Key components within the system are home health agencies, program contractors, and AHCCCS.
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Home health agencies are directly responsible for providing services and ensuring that they are provided appropriately. To help ensure appropriate provision of services, registered nurses must accompany and supervise home health aides every 62 days. However, a review of a random sample of services provided to 61 clients identified 8 instances where registered nurses at 3 home health agencies did not appropriately conduct these supervisory visits.
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Program contractors also perform a number of monitoring functions, but some processes could be improved. To ensure client needs are appropriately identified, case managers conduct quarterly client assessments, which supervisors review, and it appears these activities are performed as required. However, some improvements could be made to program contractors’ regular reviews of the home health agencies in their networks. Specifically, by obtaining DHS inspection reports, program contractors could better identify problem areas. In addition, program contractors could improve client satisfaction surveys by including questions about case managers’ performance and by having these surveys administered by persons other than case managers.
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AHCCCS also conducts annual operational and financial reviews of program contractors and measures client satisfaction, but some additional process improvements may be needed. Specifically, AHCCCS has not taken progressive enforcement actions when it has identified repeated problems with quality-of-care issues. In addition, although AHCCCS
conducts client satisfaction surveys, the surveys could be more useful if they were distributed to a random sample of clients and results were analyzed based on the setting within which the client resides. However, AHCCCS officials indicate that regularly analyzing survey results by client groups would be prohibitive with current resources since the sample size would need to be substantially increased.
In addition, AHCCCS could further ensure quality of care through better use of complaint data. Specifically, AHCCCS should facilitate increased information sharing. For example, AHCCCS does not obtain and distribute DHS inspection and complaint investigation results; and AHCCCS lacks a policy directing AHCCCS staff and program contractors to share investigation results with outside regulatory entities. Moreover, AHCCCS does not fully utilize its own investigation results to identify ongoing problems with home health services or agencies. Finally, improved complaint tracking by program contractors could help to more quickly identify problem facilities.
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