Deeper Than the Headlines: Medicare Hospice Vulnerabilities

The most recent report posted by the OIG addresses what they feel are the compliance vulnerabilities in the Medicare Hospice program. The report also provides recommendations to improve program vulnerabilities detected in prior audits, evaluations, and investigations. The report identifies trends in payment, compliance, oversight, or fraud vulnerabilities requiring priority attention and action to protect the integrity of the program.

Hospice is an increasingly important benefit for the Medicare population. It can provide great comfort to beneficiaries and their families and other caregivers at the end of a beneficiary’s life. The number of hospice beneficiaries has grown every year for the past decade. In 2016, Medicare spent about $16.7 billion for hospice care for 1.4 million beneficiaries, up from $9.2 billion for fewer than 1 million beneficiaries in 2006. With this growth, OIG has identified significant vulnerabilities.

Previous work by the OIG raised concerns about hospice billing, Federal oversight, and quality of care provided to beneficiaries. OIG investigations of fraud cases have uncovered hospices enrolling patients without the beneficiary’s knowledge or under false pretenses, enrolling beneficiaries who are not terminally ill, billing for services not provided, paying kickbacks, and falsifying documentation.

OIG has uncovered several fraud schemes in hospice care that negatively affect beneficiaries and their families and caregivers. Some fraud schemes involve paying recruiters to target beneficiaries who are not eligible for hospice care, while other schemes involve physicians falsely certifying beneficiaries.

For example, a hospice physician inappropriately certified a beneficiary as terminally ill who just days before was determined by a hospital to be in “good shape.” Beneficiaries are put at risk when they are enrolled in hospice care inappropriately, as Medicare hospice does not pay for curative treatment for a beneficiary’s terminal illness. Therefore, a beneficiary who is inappropriately enrolled in hospice care might be unwittingly forgoing needed treatment. In one example, a hospice falsely told a beneficiary that she could remain on a liver transplant list even if she elected hospice care. When the beneficiary elected hospice care, she was removed from the transplant list. After the beneficiary learned of this, she stopped hospice care so she could be reinstated on the transplant list. As this example demonstrates, it is critical that beneficiaries know when they are in hospice care and what that means for their treatment options.

Reviews of individual hospices have found improper payments ranging from $447,000 to $1.2 million for services not meeting Medicare requirements. In these cases, the hospices billed for inappropriate levels of care, lacked required certifications of terminal illness, or did not have sufficient clinical documentation.

Hospices have also inappropriately billed for expensive levels of care that were not needed. Specifically, in 2012 hospices billed one-third of general inpatient care stays inappropriately, costing Medicare $268 million. General inpatient care is the second most expensive level of hospice care and should only be billed when the beneficiary has uncontrolled pain or symptoms that cannot be managed at home. Hospices often billed for general inpatient care when the beneficiary needed only routine home care. As a result, these hospices were paid $672 per day instead of $151 per day. At other times, the hospice inappropriately billed for general inpatient care when the beneficiary’s caregiver was not available and inpatient respite care was needed. By billing inappropriately, the hospices received $672 per day for general inpatient care instead of $156 per day for inpatient respite care, the level of care specifically designed to relieve caregivers.

Hospices were more likely to bill inappropriately for general inpatient care provided in SNFs than general inpatient care provided in other settings. Forty-eight percent of general inpatient care stays in SNFs were inappropriate compared to 30 percent in other settings. In addition, for-profit hospices were more likely than other hospices to bill inappropriately for this level of care. For-profit hospices billed 41 percent of their general inpatient care stays inappropriately. In comparison, other hospices, including nonprofit and government-owned hospices, billed 27 percent of their general inpatient care stays inappropriately.

Other examples of inappropriate billing mentioned in the report included:

• A for-profit hospice in Mississippi inappropriately billed Medicare for a general inpatient care stay lasting over 7 weeks for a beneficiary whose symptoms were under control. She needed assistance only with personal care, eating, and the administration of medication, yet the hospice was paid almost $30,000 for general inpatient care.
• A for-profit hospice inappropriately billed for a beneficiary in Florida who entered general inpatient care for symptom management. Her symptoms were managed within 2 days, yet she remained in general inpatient care for 15 additional days. Medicare paid close to $12,000 for this stay.
• A hospice in New York billed for 1 month of continuous home care for dates after the beneficiary’s death. The hospice improperly received at least $1,266,517 for hospice services billed on behalf of this beneficiary and others that did not comply with Medicare requirements.
• A hospice in Puerto Rico billed for services after the beneficiary revoked the hospice election. The hospice received at least $453,558 in improper payments for services billed on behalf of this beneficiary and others that did not comply with Medicare requirements.

These are just some of the details in this extensive OIG report on vulnerabilities in the Medicare Hospice Program. If your organization is involved in Hospice services, it would be wise to review this recent report in its entirety.