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The OIG Identifies “Significant Vulnerabilities” in the Medicare Hospice Program: What This Might Mean for Hospice Providers?

Last week, the Department of Health and Human Services – Office of Inspector General (“OIG”) released a portfolio report identifying multiple vulnerabilities in the Medicare Hospice Program (the “Hospice Portfolio Report”), including concerns around billing, federal oversight, and quality of care. The OIG made 16 recommendations to CMS to strengthen the hospice program; CMS only concurred with 6 of the recommendations.

Notwithstanding CMS’ non-concurrence to the majority of the OIG’s recommendations, these findings may preview increased enforcement actions in the hospice space. In recent years, the OIG has released two other portfolio reports: one on vulnerabilities in Medicaid personal care services (“PCS”) and a second on the Medicare Part D program. Following the release of each of these reports, the number of reported investigations and prosecutions in the affected spaces surged. For example, since the OIG’s release of its report on PCS in 2012, the OIG has opened more than 200 federal criminal investigations involving fraud and patient harm by PCS providers; state investigations similarly increased.

This post outlines the OIG’s findings and recommendations related to hospice program vulnerabilities, as well as what these findings and recommendations may mean for hospice providers.

Overview of Findings

The OIG identifies vulnerabilities in almost every aspect of the hospice benefit including: the information provided to beneficiaries, the enrollment of eligible (or ineligible) beneficiaries, physician certification of beneficiaries, the care planning process, the quality of services provided, and the level of care billed for, among others.

The Election of Hospice: Deficiencies in Information Provided to Beneficiaries. The OIG finds that beneficiaries’ election of the hospice benefit is often deficient. Citing past OIG reports, it finds that hospice providers “often provide incomplete or inaccurate information on election statements.” The OIG is also critical of CMS for not providing comprehensive information to the public about the quality of hospice care provided by hospice facilities. The OIG indicates that CMS’s public information should include information about complaints filed against hospice providers.

Beneficiary Enrollment: Fraudulent Enrollment and Non-Compliant Certifications. With respect to enrollment, the OIG notes that it has identified common fraud schemes that involve inappropriately enrolling beneficiaries, who are not eligible for the benefit, into hospice. The OIG provides specific examples of enforcement against individual hospice providers as evidence of these schemes.

The OIG also cites concern with the physician certification requirements. This concern appears to be based off an investigation the OIG completed in 2012, in which it finds that in 14% of general inpatient stays the certification did not meet at least one requirement.

Insufficient Care Planning and Poor Quality Care. The Hospice Portfolio Report also finds that hospices often do a poor job with care planning. As evidence, the OIG cites a 2012 report finding hospices did not meet plan of care requirements in 85% of general inpatient care stays.

With respect to quality, the Hospice Portfolio Report indicates that sometimes hospice facilities provide poor quality care, citing individual instances of patients who did not receive required services. The OIG also cites reports finding hospices provided fewer services than were included in plans of care for 31% of claims for hospice beneficiaries residing in nursing facilities, and hospices did not provide adequate nursing, physician, or medical social services in 9% of general inpatient care stays in 2012. Of note, the OIG also performed analyses of claims data to identify patterns across the industry. Using claims data, it determines that hospice providers provide fewer services on weekends.

Inappropriate Billing of Hospice Services. The OIG also notes that some individual hospices’ billings do not meet Medicare requirements. The Hospice Portfolio Report notes that hospices have historically billed for an inappropriate levels of care, lacked required certifications of terminal illness, or did not have sufficient clinical documentation. For example, it found that in 2012 hospices billed one-third of general inpatient care stays inappropriately, costing Medicare $268 million.

OIG Recommendations

The OIG set forth 16 recommendations to CMS to improve the Medicare hospice benefit. These recommendations range from strengthening the survey process, requesting statutory authority for additional remedies for hospice poor performance, and tying payment to quality of care.  CMS only concurred with the six following recommendations:

  • Develop claims-based information and include it on the Hospice Compare website.
  • Work with its partners, such as hospitals and caregiver groups, to make available consumer-friendly information explaining the hospice benefit to beneficiaries and their families and caregivers.
  • Analyze claims data to identify hospices that engage in practices or have characteristics that raise concerns.
  • Take appropriate actions to follow up with hospices that engage in practices or have characteristics that raise concerns.
  • Increase oversight of general inpatient care claims and focus particularly on general inpatient care provided in SNFs, given the higher rate at which these stays were inappropriate.
  • Implement a comprehensive prepayment review strategy to address lengthy general inpatient care stays so that beneficiaries do not have to endure unnecessarily long periods of time in which their pain and symptoms are not controlled.

Although it is not uncommon for CMS to disagree with the majority of OIG’s recommendations, the lack of compromise or agreement between CMS and OIG in this Hospice Portfolio Report is noteworthy. Frequently the OIG moderates its recommendations due to CMS comments. However, the OIG only consolidated one recommendation as a result of CMS’s comments.

What does this mean for Hospice Providers?

The OIG stated it identified “significant vulnerabilities” in the Medicare hospice program. In some instances, the OIG may have overstated certain deficiencies and applied the bad acts of a minority of hospice facilities to the entire industry. Nonetheless, this report will likely result in increased enforcement against hospice providers, similar to the PCS Portfolio Report. Hospice is already an area with increasing enforcement, as enforcement actions have been increasing for hospice providers over the past three years. This report, and the OIG’s refusal to moderate its recommendations in light of CMS concerns, may be a recognition that government investigations and oversight of hospice will only increase.

If there is one takeaway for hospice providers, it should be to be know your claims data. Throughout its report, OIG noted that analysis of claims data is “key” to understanding how hospice is working. Moreover, one of the OIG’s recommendations that CMS agreed with is to increase use of claims data to identify hospices that “engage in practices or have characteristic that raise concerns.”

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Lauren advises pharmacies, PBMs, managed care organizations, and other payors on transactional, regulatory, and fraud and abuse matters, drawing upon her experience working for the Federal Coordinated Health Care Office.