The rapid growth of the hospice industry has attracted the attention of Congress and federal and state healthcare regulatory and enforcement agencies.  The Patient Protection and Affordable Care Act (the “ACA”), signed into law by President Obama on March 23, 2010, included several provisions aimed at hospice providers.  In addition, both the federal Office of Inspector General (OIG) and the Georgia Medicaid Recovery Audit Contractor have announced investigation and audit activities specific to hospice providers.

One section of the ACA requires hospice providers to begin reporting quality data, based on indicators established by CMS, no later than fiscal year 2014.  CMS proposes that hospices initially report on two quality measures: (i) a measure endorsed by the National Quality Forum related to pain management, and (ii) a “structural” measure including at least three quality indicators related to patient care, which are not endorsed by the NQF.  CMS has posted instructions on the CMS website related to processes for collection of the required quality information and for submission of the required information.  Hospice providers should be collecting the required data for services provided between October 1, 2012 and December 31, 2012. The Data Entry System is scheduled to “go live” on January 1, 2013. If a hospice fails to submit the required quality of care data, the provider’s market basket adjustment in the ensuing fiscal year will be reduced by two percent (2%).

In addition to the foregoing, the ACA includes a provision directing CMS to finalize and implement a 3-year “demonstration program” consisting of up to 15 hospice providers.  The demonstration program is called the “Medicare Hospice Concurrent Care” demonstration program.  This demonstration program allows Medicare beneficiaries to receive hospice care and other medically necessary care and treatment at the same time.  CMS must obtain an independent evaluation of the demonstration program. The evaluation is to determine if allowing for “concurrent care” has improved patient care, quality of life, and cost-effectiveness.

In addition to changes dictated by the ACA, federal and state investigators have announced that they intend to audit certain aspects of hospice care to ensure compliance with applicable conditions of participation and reimbursement requirements.  On the federal side, the OIG recently released its 2013 fiscal year “Work Plan.”  The 2013 Work Plan included two areas of focus related to hospice:

1. Marketing Practices and Financial Relationships with Nursing Facilities.  OIG announced that it intends to review hospice marketing materials and practices and financial relationships with skilled nursing facilities.  OIG noted that, in a recent study, it found that 82% of hospice claims for beneficiaries in nursing homes did not meet Medicare coverage requirements.  OIG also noted that MedPAC has cited cases where hospices and nursing facilities were involved in inappropriate enrollment and compensation arrangements and instances where hospices aggressively marketed their services to nursing home residents.  OIG stated that it intended to review hospices with a high percentage of beneficiaries in nursing homes.
2. General Inpatient Care.  OIG also announced that it intended to review the use of hospice in patient care in 2011, and the appropriateness of general inpatient care claims from hospices.  OIG is concerned that hospices are “misusing” general inpatient hospice care. 

At the state level, the Georgia Medicaid Recovery Audit Contractor is initiating audits of hospice providers relating to patient liability issues.  The Georgia Department of Community Health believes that hospices may have received overpayments (or underpayments) arising out of incorrect patient liability deduction calculations.

In addition, the DCH has indentified issues that are the subject of reviews in other states, and which may become the subject of audits here in Georgia, specifically:

1. Reviews to confirm that hospice patients were properly enrolled, and that they were re-certified in accordance with re-certification requirements; and
2. Compliance with Medicaid policies that require that the hospice pay for services and items (medications) that are related to the patient’s terminal condition.

New regulatory requirements and increased governmental scrutiny on the hospice industry will undoubtedly lend to a more complicated business environment for hospice providers. Hospices are advised to sharpen their focus on compliance with coverage and reimbursement requirements and to carefully review their relationships with other providers, particularly nursing homes.

This article was originally published in the November 2012 issue of Atlanta Hospital News.