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HOSPICE PROVIDERS FACE UNPRECEDENTED SCRUTINY


In August 2023, the Centers for Medicare & Medicaid Services (“CMS” or the “Agency”) announced a series of hospice program integrity initiatives it has already begun to take to combat its belief that “hospices are profiting from fraud at the expense of beneficiaries far too often.”[1] Citing both its own research, as well as media reporting, CMS describes a number of concerns involving hospice providers, including “little to no services” being provided to patients, providers certifying patients for hospice care who are not terminally ill, and providers engaging in so-called “churn and burn” schemes which CMS describes as situations “where a new hospice opens and starts billing, but once that hospice is audited or reaches its statutory yearly payment limit, it shuts down, keeps the money, buys a new Medicare billing number, transfers its patients over to the new Medicare billing number, and starts billing again.” CMS also identifies Arizona, California, Nevada, and Texas as states where potential hospice fraud is particularly concerning to the Agency.


To address these and other issues, CMS has announced that it is taking a number of steps. First, it has already begun a hospice visitation program whereby CMS is making unannounced visits to every single Medicare-enrolled hospice in the country in order to make sure that each hospice actually exists and operates at the address listed on its enrollment form. If a hospice is not operating at its listed address, CMS will either deactivate or revoke the hospice’s Medicare billing privileges. As of mid-August, CMS visited over 7,000 hospices and nearly 400 hospices are being considered for potential administrative action.


Next, in the 4 states noted above, CMS is implementing a “provisional period of enhanced oversight” for newly enrolled hospices during which period the Agency will conduct medical reviews before making payments on claims submitted by these new hospices. CMS points to both a significant increase in the number of new hospices that have opened in the past year in these states as well as numerous reports of fraud, waste and abuse.


Similarly, although not limited to the 4 noted states, CMS is initiating a pilot project to review hospice claims following a patient’s first 90 days of hospice care (the first certification period). CMS’s stated goal is to review claims early in a patient’s stay to ensure the patient is actually eligible for the hospice benefit (e.g., the patient has a terminal condition).


These new program integrity initiatives come close on the heels of a number of proposed and final regulations that CMS issued earlier this year which are aimed, in part, at addressing hospice fraud. For example, in CMS’s FY 2024 Hospice Wage Index and Payment Rule Update Final Rule,[2] the Agency requires that both the hospice medical director or hospice physician and the patient’s attending physician (if the patient has one) must be enrolled in or opted out of Medicare. According to CMS, this will allow it to screen the physician to ensure he or she is qualified to certify a patient’s terminal condition. Being “qualified” includes that the physician has an active license and does not have a felony conviction record.


In addition, in its CY 2024 Home Health Prospective Payment Proposed Rule[3] CMS is proposing several provider enrollment regulatory changes to prevent and address hospice fraud, waste, and abuse. The Agency believes that the provider enrollment provisions related to hospice ownership and management will strengthen protections against hospice fraud schemes and improve transparency. The proposed hospice enrollment-related regulatory changes include:prohibiting the transfer of the provider agreement and Medicare billing privileges of a new hospice for 36 months (which is currently the case for home health agencies); clarifying the definition of “Managing Employee” on the Medicare enrollment application form to include both the administrator and medical director of a hospice; providing methodology and scoring criteria to identify hospices that are providing poor quality or unsafe care under the “Special Focus Program” which is designed to increase oversight of poor-performing hospices that have repeated cycles of serious health and safety deficiencies; and including criminal background checks for hospice owners upon initial Medicare enrollment.


Taken together, these changes portend ever-increasing MAC and UPIC audit activities that can be expensive and time-consuming and may ultimately result in potential Medicare payment suspensions. Hospice providers who do not have a compliance program should develop and implement one, and those that have a compliance program should critically review it to ensure CMS’s recent program integrity initiatives and new regulations are taken into account and addressed, particularly in the compliance program’s policies and procedures as well as in its audit activities. Performing self-audits can assist hospice providers comply with the many Agency requirements and help to mitigate the risk of fraud, waste and abuse.

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Please note that this blog is for informative and educational purposes only, does not constitute legal advice and does not establish an attorney-client relationship.


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