Home Health & Hospice Week

Medicare's hospice program integrity campaign revs up even more.

Effective July 13, the Centers for Medicare & Medicaid Services began “placing newly enrolling hospices located in Arizona, California, Nevada, and Texas in a provisional period of enhanced oversight,” CMS said in a MLN Matters article released July 11.

Why? “Over the last 12 months, we’ve received numerous reports of hospice fraud, waste, and abuse,” CMS says. “The number of enrolled hospices has also increased significantly in these states, raising serious concerns about market oversaturation,” the article adds.

A wide variety of government and mainstream press reports have focused on issues ranging from hospice quality of care to inadequate surveys to growing for-profit domination and private equity involvement in the industry.

In fact, nonprofit investigative news site ProPublica seems to take at least some of the credit for the announced change. The enhancement is “targeting providers highlighted by a ProPublica investigation,” it points out. “In November, ProPublica and The New Yorker highlighted that the four states were overrun with for-profit hospices, many of them sharing the same addresses and owners,” the site recounts.

“Some of these hospices obtained licenses only to sell them to other entrepreneurs. Others appeared to be billing Medicare for ‘phantom’ — that is, nonexistent — patients. Some did both,” ProPublica highlights. “The government’s own data revealed a pattern of rapid hospice growth in the four states, far outstripping the demand for services.”

Under the program, “the provisional period of enhanced oversight will include medical review such as prepayment review,” CMS explains. The duration can last anywhere from 30 days to one year, and effective dates will vary by provider.

Watch out: “If we’re placing you in a period of enhanced oversight, we’ll mail a letter to the correspondence address on file in PECOS,” CMS says. The will include the effective date; the duration; and “notice that we may do a medical review of all your claims. If you don’t respond to our requests, we may deny claims or revoke your Medicare enrollment,” the agency warns.

One piece of good news is that “CMS does not have the authority to apply this particular oversight process retroactively to already-enrolled hospices,” the National Association for Home Care & Hospice points out in its member newsletter.

This stepped-up scrutiny will affect a relatively small number of hospices (see who’s a target, p. 207) and is receiving at least some industry approbation.

“We are supportive of some of the targeted steps they are taking,” said NAHC’s Davis Baird in an association listserv message.

Many of the program integrity actions CMS has taken were at the suggestion of the National Hospice and Palliative Care Organization and other trade groups, NHPCO points out. “For high-quality hospice to continue to exist, hospice care needs to stay true to its core value,” the trade group says on its website. “In protecting those values, the hospice national stakeholder groups must work together to weed out any bad actors and support the delivery of the highest quality of care,” it maintains.

But industry experts point out the burden the new program carries.

“Current and prospective hospice owners in Arizona, California, Nevada and Texas should anticipate the additional burden of enhanced oversight by CMS,” say attorneys Sean Fahey and Brian Jent with law firm Hall Render in online analysis. Hospices in those states “looking to sell or exit the market should expect new buyers to consider these additional administrative costs when negotiating the purchase,” Fahey and Jent caution.

“Hospices face significant concerns and frustrations, particularly those striving to maintain the highest standards of care and compliance,” observes reimbursement expert Melinda Gaboury with Healthcare Provider Solutions in Nashville, Tenn. “They will need to navigate through heightened audit procedures, specifically in the four states under increased scrutiny,” Gaboury predicts in her blog.

CMS has already been working on a variety of PI initiatives, ranging from making ownership data public to proposing the so-called 36-month rule for hospices in the home health proposed rule released on June 30 (see HHHW by AAPC, Vol. XXXII, No. 24-25).