OIG Releases Brief on Potential Inappropriate Payments to Nonhospice Providers

  • NAHC is creating materials to assist member hospices on this subject. Please stay tuned to NAHC Report

The Health & Human Services’ (HHS) Office of the Inspector General (OIG) released a data brief, Medicare Payments of $6.6 Billion to Nonhospice Providers Over 10 Years for Items and Services Provided to Hospice Beneficiaries Suggest the Need for Increased Oversight,  to offer insight into potential inappropriate payments to nonhospice providers for items and services provided to Medicare beneficiaries outside the Medicare hospice benefit during a hospice period of care.

The data brief will also provide the Centers for Medicare & Medicaid Services (CMS) with information to evaluate the need to potentially restructure the hospice payment system.

The issue of nonhospice payments for items and services provided to beneficiaries during a hospice period of care has been a CMS concern for some time and the OIG has previously conducted audits on this topic. Expenditures for drugs outside of the Medicare hospice benefit, i.e. those paid for under Medicare Part D, have been of particular concern.  However, expenditures outside of the hospice benefit include both Part A services such as inpatient services and Part B items and services such as physician and outpatient part B services as well as Medicare Part D (drugs) and Part C (Medicare Advantage).

A Medicare nonhospice payment may be made to a provider for items and services that are unrelated to a hospice beneficiary’s terminal illness and related conditions, but these are expected to be rare. CMS continues to reiterate that “it would be unusual and exceptional to see services provided outside of hospice for those individuals who are approaching the end of life” and that its “long-standing position [is] that services unrelated to the terminal illness and related conditions should be exceptional, unusual and rare given the comprehensive nature of the services covered under the Medicare hospice benefit”.

All hospice-related services must be provided directly by the hospice or under arrangements with the hospice (42 CFR §§ 418.64 and 418.70). For the duration of an election of hospice care, an individual waives all rights to Medicare payments for:

(1) hospice care provided by a hospice other than the hospice designated by the individual and

(2) any Medicare services that are related to the treatment of the terminal condition for which hospice care was elected, or a related condition, or that are equivalent to hospice care (42 CFR § 418.24(f))

The patient acknowledges this waiver as part of the Medicare hospice election statement.

For the analysis for this data brief he OIG looked at only Part A and Part B expenditures that were made while there was an active hospice enrollment for calendar years 2010 through 2019 to identify trends and patterns though the OIG did not assess whether these payments were for items and services that treated conditions unrelated to the beneficiary’s terminal illness and related conditions.

Because there has been substantial growth in the use of hospice care, the OIG also analyzed Medicare data to identify trends and patterns in Medicare hospice payments, nonhospice payments, and payments associated with for-profit and nonprofit hospices.

The OIG concluded that the results of the data analysis demonstrate an increase in Medicare nonhospice payments for beneficiaries during a hospice period of care. Nonhospice payments for Medicare Part A services and Part B items and services totaled $6.6 billion from 2010 through 2019, and the majority of payments were for Part B items and services. In addition, the percentage of hospice beneficiaries who received nonhospice items and services remained at an average of 44 percent over the 10-year audit period, which indicates that a potential inappropriate “unbundling” of items and services from the hospice benefit still exists.

If providers bill Medicare for nonhospice items and services that potentially should be covered by hospices, Medicare could pay for the same items or services twice. The OIG added that previous audits and studies conducted by the OIG on Medicare Part D drugs and DMEPOS items provided to hospice beneficiaries demonstrated that these duplicate payments are, in fact, occurring.

The OIG previously recommended and repeated in this brief that CMS could work directly with hospices to ensure that they are providing drugs covered under the hospice benefit and develop and execute a strategy to ensure that Medicare Part D does not pay for drugs that should be covered by the Part A hospice benefit.

voluntary prior authorization process for hospices to use for four classes of drugs was implemented in 2014 and did result in a decrease in expenditures for the four classes of drugs (analgesics, antinauseants (antiemetics), laxatives, and antianxiety drugs (anxiolytics)) for those hospice patients simultaneously enrolled in Part D. However, there was an increase in maintenance drug expenditures for these types of patients.

Effective October 1, 2020, CMS implemented a policy for patient notification of hospice noncovered items, services, and drugs (Medicare hospice election statement addendum). CMS stated that these changes should hold hospices accountable to their beneficiaries through benefit coverage transparency, which should reduce the need for beneficiaries to seek care outside of the hospice benefit for services related to the terminal illness.

The OIG previously recommended CMS study the feasibility of including palliative items and services not related to a beneficiary’s terminal illness and related conditions within the hospice per diem.

It is important to note that hospices do not submit the claims for nonhospice expenditures and are not able to fully control them, but it is clear that the OIG and CMS continue to search for processes and possibly hospice payment reforms that will decrease the level of nonhospice expenditures. In fact, the OIG stated that considering the information in this data brief may help CMS further evaluate the need to potentially restructure the hospice payment system to reduce duplicate payments for items and services that should be included in the hospice per diem payment.

OIG plans to conduct additional audits related to nonhospice items and services provided during a hospice period of care to determine whether Medicare payments for these items and services were made in accordance with Medicare requirements.

NAHC is working on creating materials to assist member hospices on this subject. Please stay tuned to NAHC Report for more information.