HHS I.G. Audit: 'Medicare Hospice Provider Compliance Audit – Northwest Hospice, LLC'

WASHINGTON, June 27 -- The Health and Human Services Inspector General issued the following audit report (No. A-09-20-03035) entitled "Medicare Hospice Provider Compliance Audit: Northwest Hospice, LLC" filed under the Centers for Medicare and Medicaid Services:

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Report in Brief

Here are excerpts:

Why OIG Did This Audit

The Medicare hospice benefit allows providers to claim Medicare reimbursement for hospice services provided to individuals with a life expectancy of 6 months or less who have elected hospice care. Previous OIG audits and evaluations found that Medicare inappropriately paid for hospice services that did not meet certain Medicare requirements.

Our objective was to determine whether hospice services provided by Northwest Hospice, LLC (NW Hospice), complied with Medicare requirements.

How OIG Did This Audit

Our audit covered 6,864 claims for which NW Hospice (located in Tigard, Oregon) received Medicare reimbursement of $31.5 million for hospice services provided from June 1, 2016, through May 31, 2018. We reviewed a random sample of 100 claims. We evaluated compliance with selected Medicare billing requirements and submitted these sampled claims and the associated medical records to an independent medical review contractor to determine whether the services met coverage, medical necessity, and coding requirements.

What OIG Found

NW Hospice received Medicare reimbursement for hospice services that did not comply with Medicare requirements. Of the 100 hospice claims in our sample, 81 claims complied with Medicare requirements. However, for the remaining 19 claims, the clinical record did not support the beneficiary's terminal prognosis. Improper payment of these claims occurred because NW Hospice's policies and procedures were not effective in ensuring that the clinical documentation it maintained supported the terminal illness prognosis. On the basis of our sample results, we estimated that NW Hospice received at least $3.9 million in unallowable Medicare reimbursement for hospice services.

What OIG Recommends and NW Hospice Comments

We recommend that NW Hospice: (1) refund to the Federal Government the portion of the estimated $3.9 million for hospice services that did not comply with Medicare requirements and that are within the 4-year reopening period; (2) based upon the results of this audit, exercise reasonable diligence to identify, report, and return any overpayments in accordance with the 60-day rule; and (3) strengthen its policies and procedures to ensure that hospice services comply with Medicare requirements.

In written comments on our draft report, NW Hospice, through its attorney, stated that it concurred with the conclusion of our independent medical review contractor with respect to 7 of the 19 sampled claims we questioned but disagreed with our contractor's determinations for the remaining 12 sampled claims. Specifically, NW Hospice stated that: (1) the beneficiaries were discharged from hospice the same month or the month following our contractor's determination of ineligibility (six claims) and (2) the licensed physician it hired determined that the beneficiaries were eligible for hospice services (six claims). NW Hospice did not explicitly concur or non-concur with our recommendations. However, regarding our first recommendation, it agreed to take appropriate action to refund payments for services determined not to have complied with Medicare requirements and provided information on actions that it had taken or planned to take to address our second and third recommendations.

After reviewing NW Hospice's comments, we maintain that our finding and recommendations are valid. We maintain that the medical records for each of the 19 sampled claims we questioned did not support the associated beneficiary's terminal prognosis.

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TABLE OF CONTENTS

INTRODUCTION ... 1

Why We Did This Audit ... 1

Objective ... 1

Background ... 1

The Medicare Program ... 1

The Medicare Hospice Benefit ... 1

Medicare Requirements To Identify and Return Overpayments ... 3

Northwest Hospice, LLC ... 4

How We Conducted This Audit ... 4

FINDING ... 5

Terminal Prognosis Not Supported ... 5

RECOMMENDATIONS ... 6

NW HOSPICE COMMENTS AND OFFICE OF INSPECTOR GENERAL RESPONSE ... 6

Hospice Discharges Within the Margin for Reasonable Clinical Judgment and Support for Terminal Prognosis ... 7

NW Hospice Comments ... 7

Office of Inspector General Response ... 7

The 60-Day Rule and Return of Medicare Overpayments ... 9

NW Hospice Comments ... 9

Office of Inspector General Response ... 9

Recommendations ... 9

NW Hospice Comments ... 9

Office of Inspector General Response ... 10

APPENDICES

A: Audit Scope and Methodology ... 11

B: Related Office of Inspector General Reports ... 13

C: Statistical Sampling Methodology ... 14

D: Sample Results and Estimates ... 15

E: NW Hospice Comments ... 16

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INTRODUCTION

WHY WE DID THIS AUDIT

The Medicare hospice benefit allows providers to claim Medicare reimbursement for hospice services provided to individuals with a life expectancy of 6 months or less who have elected hospice care. Previous Office of Inspector General (OIG) audits and evaluations found that Medicare inappropriately paid for hospice services that did not meet certain Medicare requirements./1

OBJECTIVE

Our objective was to determine whether hospice services provided by Northwest Hospice, LLC (NW Hospice), complied with Medicare requirements.

BACKGROUND

The Medicare Program

Title XVIII of the Social Security Act (the Act) established the Medicare program, which provides health insurance coverage to people aged 65 and over, people with disabilities, and people with end-stage renal disease. The Centers for Medicare & Medicaid Services (CMS) administers the Medicare program.

Medicare Part A, also known as hospital insurance, provides for the coverage of various types of services, including hospice services.2 CMS contracts with Medicare Administrative Contractors (MACs) to process and pay Medicare hospice claims in four home health and hospice jurisdictions.

The Medicare Hospice Benefit

To be eligible to elect Medicare hospice care, a beneficiary must be entitled to Medicare Part A and certified by a physician as being terminally ill (i.e., as having a medical prognosis with a life expectancy of 6 months or less if the illness runs its normal course)./3

Hospice care is palliative (supportive), rather than curative, and includes, among other things, nursing care, medical social services, hospice aide services, medical supplies, and physician services. The Medicare hospice benefit has four levels of care: (1) routine home care, (2) general inpatient care, (3) inpatient respite care, and (4) continuous home care. Medicare provides an all-inclusive daily payment based on the level of care./4

Beneficiaries eligible for the Medicare hospice benefit may elect hospice care by filing a signed election statement with a hospice./5

Upon election, the hospice assumes the responsibility for medical care of the beneficiary's terminal illness, and the beneficiary waives all rights to Medicare payment for services that are related to the treatment of the terminal condition or related conditions for the duration of the election, except for services provided by the designated hospice directly or under arrangements or services of the beneficiary's attending physician if the physician is not employed by or receiving compensation from the designated hospice./6

The hospice must submit a notice of election (NOE) to its MAC within 5 calendar days after the effective date of election. If the hospice does not submit the NOE to its MAC within the required timeframe, Medicare will not cover and pay for days of hospice care from the effective date of election to the date that the NOE was submitted to the MAC./7

Beneficiaries are entitled to receive hospice care for two 90-day benefit periods, followed by an unlimited number of 60-day benefit periods./8

At the start of the initial 90-day benefit period of care, the hospice must obtain written certification of the beneficiary's terminal illness from the hospice medical director or the physician member of the hospice interdisciplinary group/9 and the beneficiary's attending physician, if any. For subsequent benefit periods, a written certification by only the hospice medical director or the physician member of the hospice interdisciplinary group is required./10

The initial certification and all subsequent recertifications must include a brief narrative explanation of the clinical findings that supports a life expectancy of 6 months or less./11

The written certification may be completed no more than 15 calendar days before the effective date of election or the start of the subsequent benefit period./12

A hospice physician or hospice nurse practitioner must have a face-to-face encounter with each hospice beneficiary whose total stay across all hospices is anticipated to reach a third benefit period./13

The physician or nurse practitioner conducting the face-to-face encounter must gather and document clinical findings to support a life expectancy of 6 months or less./14

Hospice providers must establish and maintain a clinical record for each hospice patient./15

The record must include all services, whether furnished directly or under arrangements made by the hospice. Clinical information and other documentation that support the medical prognosis of a life expectancy of 6 months or less if the terminal illness runs its normal course must be filed in the medical record with the written certification of terminal illness./16

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FINDING

NW Hospice received Medicare reimbursement for hospice services that did not comply with Medicare requirements. Of the 100 hospice claims in our sample, 81 claims complied with Medicare requirements. However, for the remaining 19 claims, the clinical record did not support the beneficiary's terminal prognosis. Improper payment of these claims occurred because NW Hospice's policies and procedures were not effective in ensuring that the clinical documentation it maintained supported the terminal illness prognosis.

On the basis of our sample results, we estimated that NW Hospice received at least $3.9 million in unallowable Medicare reimbursement for hospice services./21

As of the publication of this report, these overpayments include claims outside of the 4-year reopening period./22

Notwithstanding, NW Hospice can request that a Medicare contractor reopen the initial determinations for those claims for the purpose of reporting and returning overpayments under the 60-day rule without being limited by the 4-year reopening period./23

TERMINAL PROGNOSIS NOT SUPPORTED

To be eligible for the Medicare hospice benefit, a beneficiary must be certified as being terminally ill. Beneficiaries are entitled to receive hospice care for two 90-day benefit periods, followed by an unlimited number of 60-day benefit periods. At the start of the initial 90-day benefit period of care, the hospice must obtain written certification of the beneficiary's terminal illness from the hospice medical director or the physician member of the hospice interdisciplinary group and the individual's attending physician, if any. For subsequent benefit periods, a written certification from the hospice medical director or the physician member of the hospice interdisciplinary group is required. Clinical information and other documentation that support the beneficiary's medical prognosis must accompany the physician's certification and be filed in the medical record with the written certification of terminal illness./24

For 19 of the 100 sampled claims, the clinical record provided by NW Hospice did not support the associated beneficiary's terminal prognosis. Specifically, the independent medical review contractor determined that the records for these claims did not contain sufficient clinical information and other documentation to support the medical prognosis of a life expectancy of 6 months or less if the terminal illness ran its normal course.

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RECOMMENDATIONS

We recommend that Northwest Hospice, LLC:

* refund to the Federal Government the portion of the estimated $3,902,337 for hospice services that did not comply with Medicare requirements and that are within the 4-year reopening period;/25

* based upon the results of this audit, exercise reasonable diligence to identify, report, and return any overpayments in accordance with the 60-day rule/26 and identify any of those returned overpayments as having been made in accordance with this recommendation; and

* strengthen its policies and procedures to ensure that hospice services comply with Medicare requirements.

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View full report at https://oig.hhs.gov/oas/reports/region9/92003035.pdf