Holistic Home Health ... Focused medical review closes home health firm

by Karen E. Culp

SBJ Staff

Paula Austin started her company, Holistic Home Health, in 1992, hoping to "give care to the whole patient." And she did, she said, until a focused medical review by Medicare restricted her finances to the point where she had to close her business.

This is the second such case in Springfield, where Hartline Hospice closed its doors after a focused medical review forced the company into Chapter 11 bankruptcy, and then out of business completely.

Local attorney Mark Fitzsimmons has represented both companies.

"I think this is a terrible comment on the state of the medical profession. Are we going to reach the point where only large corporations can survive in the health care field?" Fitzsimmons said.

While Hartline was a hospice, giving comfort and care to the dying, Holistic Home Health focused on caring for the mentally retarded and mentally ill in their homes, Austin said.

"We came into the home and gave medical and psychiatric care to those who had mental illness or mental retardation," Austin said.

Austin has been a nurse for about 20 years. She wanted to open her own home health care business because she saw a need for care for the mentally ill.

"These are people who have a life and deserve good care, but who were also potentially harmful to themselves and others. They had to have help regulating their medications and needed special attention," Austin said.

Holistic was unique in that it focused on the mentally challenged, Austin said. At its largest, the company employed 12 nurses and 10 support staff.

Approximately 98 percent of her income came from Medicare, Austin said. So in February 1998, when her company went on focused medical review, about half of her income was suspended while half of the company's Medicare claims were investigated by Wellmark, the intermediary for Medicare.

Eventually, Austin said, she was not paid for those claims and was forced to close the business.

The company had between 80 and 90 patients on average and paid between 140 and 160 visits a week, Austin said. As the review continued, Austin had to stop accepting new patients and begin to release her staff.

"It seems they're targeting small, independent businesses with this focused medical review stuff," Fitzsimmons said.

The business closed May 8, and the corporation will be dissolved. Austin will not have to declare bankruptcy, Fitzsimmons said, because the company did not own a great deal of property.

Austin said she owes about $20,000 or $25,000 in taxes but has no other large debts.

She said she was told she was chosen for focused medical review at random, and was given no guarantee of when the process would end.

"At one point, I was told it could go on forever," Austin said.

Like the Harts, Austin said her records were investigated because of errors like not getting a doctor to sign in the appropriate place or missing some other part of the documentation, not because she was not giving adequate care to the patients.

"What happened to us had nothing to do with the kind of care these patients were getting. We were providing them the best possible care. We were scrutinized over insignificant things," Austin said.

Marilyn Warling, a director in the Medicare Division for Wellmark, said the purpose of focused medical review was to "identify those providers who seem to be aberrant in reference to their peers." The agency ranks the providers and then identifies those that are "out of focus," Warling said.

The review is not random, she said, but has to do with whether the agency falls into the aberrant category, although the agency has performed some random reviews in the past.

The review begins with a test edit, which is held for about six weeks. It is during that test edit that Wellmark determines whether the agency will be placed on focused medical review.

If the percentage of denied claims is more than 10 percent, the agency goes on focused medical review for a three-month period, Warling said.

"The agency is notified at that point that they are on review and of what we're going to review," Warling said.

After the three-month period, if the agency falls below the 10 percent denial rate, it is removed from review. If the denial rate is still high, the review extends another three months.

"Sometimes these mistakes are innocent, and a provider doesn't know any better. In that case, we try to do some education," Warling said.

Once in a while, Wellmark will examine claims and find that no denial of payment must be made, Warling said.

The focused medical review has been around for about five years, she added. During the past year and a half or two years, the number of agencies placed on review has increased significantly because of availability of funds for conducting the reviews, Warling said.

The review process slows down the income cycle for an agency because the payment is not made until the claim is reviewed, Warling said.

"There can be a big impact on cash flow of an agency, and we are aware of that, but we also want to do a good job for Medicare," Warling said.

Home health has been scrutinized somewhat, Warling said because of concern at the national and state levels regarding growth in that field.

"We've seen a lot of new restrictions placed on home health recently," Warling said.

One of those is that home health agencies can no longer draw blood at a person's home.

That was a concern for Austin, because many of her patients were unable to have that service provided anywhere else.

The absence of Holistic Home Health leaves a gap in the health care industry in Springfield, Fitzsimmons said. He said he is also concerned about the future of privately owned health care agencies in light of the fact that two independent health agencies have been the subject of focused medical reviews and subsequently gone out of business.

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