By DANIEL AYYASH

Overview

At its core, hospice provides palliative care and support for terminally ill individuals and their families. People who elect to receive hospice care generally receive this care in the home setting by a team of professionals and caregivers who are specially trained to address the sensitive needs of those nearing end of life. In addition to meeting patients’ physical needs, hospices provide care for the “whole person,” which includes care that meets their emotional, social, and spiritual needs. Being able to provide beneficial, high-quality care is critical to the successful efforts of hospice providers. Recently, the Centers for Medicare & Medicaid Services (CMS) indicated that they have noticed an increasing trend of hospice services fraud. In response to this perception, CMS is significantly increasing its attention and scrutiny on hospice providers.

CMS Observations

In recent statements, CMS claims to have identified instances of hospices certifying patients for hospice care when they were not actually terminally ill, as well as providing minimal or no services to patients. CMS also claims that some of the addresses listed for these allegedly fraudulent hospices appear to be tied to non-operational locations. Additionally, CMS highlighted a particular trend known as a “churn and burn” scheme, where a new hospice opens and begins billing for services, but once that hospice becomes subject to audit or reaches its statutory yearly payment limit, it shuts down, keeps the money, purchases a new Medicare billing number, transfers its patients over to the new Medicare billing number, and resumes billing again under the new number. The true extent of these allegations is unclear, as CMS has not released any specific findings regarding these observations.

Site Visit Initiative

In response to these purported findings, CMS embarked on a nationwide hospice site visit program, making unannounced visits to every Medicare-enrolled hospice in the country. As of mid-August 2023, CMS has visited over 7,000 hospices, and indicated that nearly 400 hospices are being considered for potential administrative action as a result. While many of these hospices may very well be able to demonstrate compliance with Medicare requirements, if CMS finds grounds to conclude that a hospice is allegedly non-compliant, this may result in significant adverse consequences such as overpayment demands or suspension or revocation of Medicare billing privileges. As a result of the site visit program, CMS has noted rapid hospice growth trends in four states – Arizona, California, Nevada, and Texas – which has led the Centers to implement a provisional period of enhanced oversight in these states. During this provisional period, CMS plans to conduct medical reviews prior to making payments on claims submitted by newly enrolling hospices. More broadly, CMS is also initiating a pilot project to review hospice claims following a patient’s first 90 days of hospice care with the intent of implementing future medical review activities to determine whether hospices are submitting Medicare claims for patients that are eligible for the benefit. This pilot project is not limited to Arizona, California, Nevada, and Texas, and appears to be operational in all states.

Regulatory Response

Adding to the heightened attention created by the direct review of hospice claims resulting from the site visit program, CMS has introduced several finalized and proposed regulatory changes focused on hospices. CMS recently finalized a requirement allowing the agency to screen hospice certifying physicians to ensure they are qualified to treat Medicare beneficiaries, including making sure they have active licenses and do not have any record of felony convictions. Moreover, as part of the calendar year (CY) 2024 Home Health Prospective Payment System (HH PPS) Rate Update proposed rule, CMS’s proposed regulations would:

  • Prohibit the transfer of the provider agreement and Medicare billing privileges of a new hospice for 36 months (similar to the existing rules for home health agencies);

 

  • Clarify that the definition of “Managing Employee” on the Medicare enrollment application form includes the administrator and medical director of a hospice;

 

  • Implement a hospice Special Focus Program (SFP), as required under the Consolidated Appropriations Act (CAA) of 2021, that would increase oversight of poorly performing hospices that have repeated cycles of serious health and safety deficiencies; and

 

  • Include criminal background checks for owners upon initial Medicare enrollment.

 

Prior to implementation of the SFP, CMS convened a Technical Expert Panel (TEP) in CY 2022 to gain input from key stakeholders on various aspects of the SFP to identify the most appropriate indicators of poor-performing hospices and other components of the program. CMS is in the process of proposing the methodology and an algorithm with criteria for identifying hospices that should be in the proposed SFP based on the TEP recommendations and other stakeholder feedback. The SFP proposal would establish what CMS refers to as an “equitable threshold,” which would utilize hospice survey findings and other quality indicators related to performance with the goal of holding hospices accountable for providing unsafe or poor-quality care to patients. CMS also stated that hospice programs that are unable to resolve the deficiencies that brought them into the SFP and cannot meet the proposed SFP completion criteria would be placed on a termination track. Additionally, the proposed rule includes an informal dispute resolution (IDR) process for hospice programs, which would allow hospice providers an opportunity to refute one or more condition-level deficiencies cited in a Statement of Deficiencies survey report. This proposed IDR process would align with the currently established IDR process for home health agencies.

Survey and Enforcement Requirements

CMS is currently in the process of implementing new survey and enforcement requirements targeted at hospice compliance. State agencies and national accrediting organizations (AOs) are required to conduct surveys of hospices to make sure they provide all required services and meet all hospice conditions of participation. These surveys must occur before hospices are certified for participation in Medicare and at least every three years thereafter. Further, in the CY 2022 Home Health Prospective Payment System (HH PPS) Rate Update final rule, CMS solidified policies requiring surveyors to use multidisciplinary survey teams, prohibiting surveyor conflicts of interest (such as prohibiting surveyors from performing a survey of a provider where they have an ownership interest or are employed), and requiring surveyors from AOs to complete comprehensive training and testing. Additionally, AOs are now required to collect standardized survey deficiency information in the same manner and format used by State Survey Agencies, which information is disclosed on the Quality, Certification, and Oversight Reports (QCOR) public facing website. Lastly, CMS stated its intention to publicly post survey information on its Care Compare website to offer patients and their families even more information and transparency into the quality of care provided by hospices in their area.

Takeaway

In light of the broad ranging actions that CMS is taking focused on hospice compliance, coupled with the greater scrutiny and restrictions being put in place, hospice providers should make diligent prospective compliance efforts to stay up to date regarding Medicare hospice enrollment and billing requirements and best practices. Hospice providers may expect increased audit and investigation activity as well as other enforcement actions as a direct result of CMS’s revamped focus on hospices.