Home Health & Hospice Week

But don’t expect to get out of the investigative hot seat any time soon.

Finally, home health and hospice agencies are getting some good news from the feds. The Comprehensive Error Rate Testing program found the payment error rate for both types of providers much lower this year.

Hospices clocked in with an overall 5.4 percent error rate for fee-for-service Medicare claims, according to the new CERT report. That represents $1.3 billion and is down from a much higher 12.04 percent last year (see HHHW by AAPC, Vol. XXXII, No. 2). It is closer to the 7.7 percent from 2021.

Background: Until 2021, hospice improper payment rates as measured by Medicare’s CERT program had been declining for years — 10.7 percent for 2015, then spiking to 15.9 percent for 2016, then falling again to 14.7 percent for 2017, 11.7 percent for 2018, 9.7 percent for 2019, and 6.69 percent for 2020.

To be clear: The fiscal year 2023 Medicare FFS im­proper payment rate actually includes claims submitted during the 12-month period from July 1, 2021 through June 30, 2022, CMS explains in the report.

CMS breaks the hospice error rate down further as well — 5.2 percent for the larger non-hospital-based providers and 8.2 percent for the smaller hospital-based group. Their error rates represent 3.6 percent and 0.4 percent of Medicare’s overall FFS improper payments, respectively, the report details.

Overall, the entire Medicare FFS error rate is 7.38 percent, which equals $31.23 billion in improper payments.

The hospice rate has never been all that high, compared to the home health one. “But it’s now half what it was in 2015, sharply declining from 2022,” points out reimbursement expert M. Aaron Little with FORVIS in Springfield, Mo. “With all the recent scrutiny on hospice (Special Focus Program, etc.), it’s really interesting to see the overall error rate of 5.4 percent so low compared to prior years,” Little says.

CMS details the top reasons for hospice denials, both full and partial (see chart below).

The top issue, missing Service Intensity Add-on documentation, surprises Little. He’s “curious to understand that finding in a bit more detail,” he tells AAPC.

Otherwise, “the hospice root cause analysis seems in line with the kind of issues that we typically see cause problems in [Targeted Probe and Educate medical review] with election forms, physician certifications/recertifications, and FTF being some of the most common reasons for payment issues,” Little says.

Don’t Let Falling Rates Lull You

The bad news is that despite the lower error rate, hospices still have a target on their backs. Although hospice payments are a relatively small piece of the Medicare payment pie, the report identifies the sector as a major problem. “For the 2023 reporting period, the Medicare FFS improper payment drivers are: Skilled Nursing Facilities, Hospital Outpatient, Inpatient Rehabilitation Facilities, and Hospice,” CMS highlights in the report.

SNFs had a 13.8 percent error rate representing $4.8 billion, hospital outpatient 5.2 percent equaling $4.0 billion, and IRFs a whopping 27.3 percent at $1.9 billion.

“It’s encouraging to see the improper payment rates decrease for both home health and hospice, and to see there are other programs that have much higher rates” including SNFs, inpatient rehabs, etc., Little says.

“However, providers cannot assume these decreases will result in less scrutiny on the home health and hospice programs,” Little warns. “In this age of TPE, Special Focus Program, and program integrity contractor audits, providers cannot become complacent about compliance,” he stresses.

HH Error Rate Continues To Drop

Hospices aren’t the only ones enjoying a lower Medicare payment error rate this year.

On the home health side, the Centers for Medicare & Medicaid Services reports a 7.7 percent fee-for-service home health error rate for 2023 representing $1.2 billion — 3.8 percent of Medicare’s overall improper payments. That's down significantly from a 10.15 percent improper payment rate for 2022.

History: Home health rates have taken a sharp nosedive from sky-high figures seven to nine years ago. CMS reported a whopping 59 percent home health error rate in 2015, falling to 42 percent for 2016; 32 percent for 2017; a much lower 17.6 percent for 2018; 12.1 percent for 2019; 9.30 percent for 2020; and 10.24 percent for 2021.

Home health rates “are the lowest since 2015,” Little celebrates.

Since CMS doesn’t call out home health as one of its four “FFS improper payment drivers,” the sector doesn’t get a detailed root cause analysis for denied claims in the report. But CMS does note that:

• 3.6 percent of home health payments reviewed had medical necessity errors;
• 3 percent were found to have insufficient documentation;
• 0.2 percent had incorrect coding;
• 0.2 percent had upcoding;
• 0.1 percent had no documentation; and
• 0.8 percent had “other errors.”

Note: The 93-page error report is at www.cms.gov/files/document/2023medicarefee-servicesupplementalimproperpay­mentdatapdf.pdf.