OIG Finds Inappropriate Service Denials by MAOs

An Office of Inspector General (OIG) report determined that Medicare Advantage Organizations (MAOs) sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules. MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules. In the report, Some Medicare Advantage Organization Denials…

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.

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…

OIG Planning for Nationwide Hospice Eligibility Audit in 2023

A nationwide audit of hospice eligibility, with a focus on Medicare beneficiaries who have not had an inpatient ER or hospital stay prior to starting hospice care is planned for 2023 by the Office of the Inspector General (OIG) of the Department of Health & Human Services.

According to OIG, previous compliance audits on hospice providers “identified findings related to beneficiary liability.” This indicates those findings are at least partially responsible for the planned coming audit.

“[I]n the last couple of years, our agency has done numerous individual hospice audits, and every one of them found issues with beneficiary eligibility,” an OIG spokesperson told Hospice News.

Hospice eligibility is one of the most frequently targeted issues in regulatory enforcement.

According to a report from 2021 from Bass, Barry, and Sims, one of the leading causes of hospice fraud involves hospices billing Medicare for services for patients that were not eligible for those services.

The focus appears to be on patients admitted to hospice without a preceding hospitalization or ER visit, which might indicate a focus on patients with diagnoses of heart disease, chronic kidney problems, or dementia. Some hospices have reported that during the current public health emergency their referral mix has changed, with more coming from physician offices and fewer from hospitals.

Two OIG reports on hospice in 2019 alarmed some in Congress and CMS reformed its survey process last year to include new provisions for surveyor training and greater consumer transparency.

Medicare Administrative Contractor Cost Report Oversight – Contract Review

OIG also announced a Medicare Administrative Contractor Cost Report Oversight – Contract Review, with a report expected to be issued in FY 2023.

In accordance with their CMS contracts, Medicare administrative contractors (MACs) are responsible for accepting, auditing, and settling provider Medicare cost reports. The MAC performs desk reviews of all cost reports and audits as warranted prior to settlement of the cost report to determine adequacy, completeness, and accuracy and reasonableness of the data in the cost report. CMS will review the MACs cost report oversight by verifying the number of desk reviews and the number of audits performed in accordance with the CMS contract and identify non-compliance issues.

Following this review, CMS will conduct additional reviews that will include MAC audit findings and recommendations to determine whether the provider implemented the recommendations and took corrective action.

Finally, CMS will examine CMS’s oversight of the MAC cost report desk reviews/audits. The objective of the audit is to determine whether the individual MACs met requirements stated in the MAC contracts.

OIG Planning for Nationwide Hospice Eligibility Audit in 2023

A nationwide audit of hospice eligibility, with a focus on Medicare beneficiaries who have not had an inpatient ER or hospital stay prior to starting hospice care is planned for 2023 by the Office of the Inspector General (OIG) of the Department of Health & Human Services. According to OIG, previous compliance audits on hospice…

HHS Financial Report for 2021 Identifies Increases in Hospice Payment Error Rates

  • Increases not “statistically significant”, according to HHS

On an annual basis, the Department of Health & Human Services (HHS) issues a financial report that provides fiscal and high-level performance results that allow for the assessment of HHS’ performance over the previous fiscal year.  Last week HHS issued its FY2021 HHS Agency Financial Report (Report) containing an overview of programs, accomplishments, challenges and management’s accountability for the resources entrusted to it.

Financial projections for the report (which were largely taken from the 2021 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Insurance Trust Funds) are based on actual experience through 2019.

The Report notes that Medicare was dramatically affected by the COVID-19 pandemic.  The Trust Funds saw increased spending in areas related to testing and treatment of the disease as well as connected to legislative and regulatory waivers of existing policy (such as the waiver of the three-day hospital stay requirement to receive skilled nursing services and the 20 percent increase in payments for inpatient hospital admissions).  However, these costs were more than offset by decreases in spending for non-COVID-19 care, particularly for elective services.  The report notes that spending for certain services – including hospice – do not appear to have been materially impacted by the pandemic.  While the public health emergency has impacted trust fund financing over the short term, it is not expected to have a large effect on the financial status of the trust funds after 2024.

While the Report explores HHS’ management and financial operations in depth, information that may be of greatest interest to home health and hospice providers is housed in Section 3 of the report, which contains a listing of current individual civil monetary penalties, the Payment Integrity Report, FY2021 Top Management and Performance Challenges facing HHS as identified by the Office of the Inspector General (OIG) and HHS’ response to the OIG report.

While hospice civil monetary penalties were authorized under the Consolidated Appropriations Act of 2021, those penalties will not become effective until October 1, 2022, so they are not listed in the Report.  HHS has, however, published other provider-specific civil monetary penalties (including home health) along with the statutory authority for each penalty.  This information was also recently published in the Federal Register and is available in the following location:  https://www.govinfo.gov/content/pkg/FR-2021-11-15/pdf/2021-24672.pdf.

Also included in Section 3 is the Payment Integrity Report, which outlines the department’s efforts to improve payment accuracy in all of HHS’ programs.  Specifically, this section includes detailed information regarding improper payments, an area of significant focus by HHS and others.  HHS uses the Comprehensive Error Rate Testing (CERT) program to estimate Medicare fee-for-service (FFS) improper payments.  The CERT program reviews a stratified random sample of Medicare FFS claims to determine if HHS properly paid claims based on Medicare’s policies on coverage, coding and billing.  In response to COVID-19, the CERT program suspended documentation requests and phone calls for a portion of the FY2021 report period (claims submitted July 1, 2019, through June 30, 2020).  As a result, the FY2021 improper payment rate reflects a four-month pause.

The improper payment rate estimate for FY2021 is 6.62 percent of total outlays, or just over $25 billion, nearly 70 percent of which is attributable to insufficient or no documentation. Improper payments for hospital outpatient, SNF, home health, and hospice claims were major contributing factors to the improper payment rate, comprising just over 38 percent of the overall estimate.  Following are comments from the report relative to the primary causes of improper payments relative to hospice:

Hospice: Insufficient documentation is the major error reason for hospice claims. The improper payment estimate for hospice claims increased from 6.69 percent in FY 2020 to 7.77 percent in FY 2021; the change is not statistically significant. The primary reason for these errors is missing or insufficient documentation to support certification or recertification. Medicare coverage of hospice services requires physician certification that the individual is terminally ill (42 CFR §418.22) and must meet all coverage criteria (42 CFR §418.200).

Action by HHS over recent years has led to reductions in the Medicare FFS improper payment rates since 2014.  HHS has taken corrective action across services areas as well as corrective actions by service area to address improper payments.  Actions across service areas include medical review/targeted probe and educate (TPE), Supplemental Medical Review Contractor (SMR) Reviews, and Recovery Audit Contractor (RAC) reviews.  All of these corrective actions underwent a temporary pause, were limited, or altered during FY2021 due to COVID-19.  HHS also implemented sector-specific corrective actions, including the following:

Home Health Hospice
Review Choice Demonstration for Home Health Services* Medical Review/TPE for Hospice*
Medical Review/TPE for Home Health Agencies* SMRC Hospice Reviews* – including general inpatient levels of care, services provided in a SNF, and services provided in an Assisted Living Facility.  These reviews included hospice services associated with certain diagnoses and hospices that do not provide all levels of hospice care.
Elimination of Home Health Request for Anticipated Payment RAC Hospice Reviews* – including reviews for physician services during hospice and continuous  home care (CHC) medical necessity and documentation requirements

*indicates actions that were temporarily paused, limited, or otherwise altered during FY2021 due to COVID-19

HHS Financial Report for 2021 Identifies Increases in Home Health, Hospice Payment Error Rates

Increases not “statistically significant”, according to HHS On an annual basis, the Department of Health & Human Services (HHS) issues a financial report that provides fiscal and high-level performance results that allow for the assessment of HHS’ performance over the previous fiscal year.  Last week HHS issued its FY2021 HHS Agency Financial Report (Report) containing…

OIG Reports on Home Health Agency Infection Control Audit

An audit of eight home health agencies (HHAs) by the Office of the Inspector General (OIG) found that most had infection control policies and procedures that met the stndards set by the Centers for Medicare & Medicaid Services (CMS) and followed CMS COVID-19 guidance to safeguard Medicare beneficiaries, caregivers, and staff during the coronavirus pandemic, according…

HHS to Evaluate Home Health Agencies on Emergency Communication Plans

The Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) has included in their workplan a report to evaluate home health agencies’ (HHA) compliance with Emergency Preparedness Conditions of Participation (EP CoPs). The report is expected to be issued in 2023. Natural disasters such as hurricanes, floods, and fires…

New NAHC Webinar: CMS Plans Sweeping Survey Reforms & Implications for Hospice Providers

Register Tuesday, July 13, 2021 1:00-2:00pm Eastern Sponsored by Homecare Homebase In mid-2019, the Department of Health and Human Services’ Office of the Inspector General (OIG) issued reports that raised considerable concerns in Congress, at the Centers for Medicare & Medicaid Services (CMS) and among hospice stakeholders. While the OIG’s findings indicated that a relatively small percentage of…