OIG: Hospices overbilled Medicare $268M

Hospices frequently bill Medicare for providing a higher level of care than patients actually need, so much so that a federal report found one-third of all inpatient hospice stays billed to Medicare in 2012 were inappropriate. 

This means patients received unnecessary care or Medicare was billed for services that were never provided, according to the report issued by HHS' Office of Inspector General. 

Here are the six main findings from the investigation. 

1. Inappropriate billing from hospices cost Medicare $268 million in 2012. Hospices frequently billed Medicare inappropriately for inpatient care, which is meant to be reserved for pain control or acute or chronic symptom management that cannot be provided in any other settings. However, 20 percent of the inpatient stays billed for by hospices in 2012 did not require this level of care. For another 10 percent, the person only needed inpatient care for a portion of the stay. The rate for inpatient care at this time was $672 per day, which is nearly four times as much as the $151 per day rate for routine care. Inappropriate billing was found to be particularly prevalent in Florida, Ohio and Arizona. 

2. About half of inpatient stays in skilled nursing facilities were billed inappropriately. Inpatient care provided in SNFs was more likely to be billed inappropriately than inpatient care provided in hospitals and hospice inpatient units, according to OIG. Of those stays that were billed inappropriately, 39 percent did not need inpatient care and 9 percent only needed it for part of their stay. The investigation also revealed that patients in inpatient care in SNFs were more likely to have a mental disorder, ill-defined condition or Alzheimer's disease, all of which are conditions typically associated with less complex hospice care, raising concerns that hospices were targeting these patients because they offered the greatest financial gain.  

3. For-profit hospices were more likely than other hospices to bill inappropriately. For-profit hospices billed 41 percent of inpatient stays inappropriately, compared to 27 percent at other hospices, including both nonprofit and government-owned organizations. 

4. Medicare often paid for drugs twice due to inappropriate billing. Medicare payments to hospices cover drugs for pain relief and symptom control related to terminal illnesses. However, the OIG found Medicare Part D also paid for more than half of the drugs used for pain relief and symptom control in hospice inpatient stays. Therefore, Medicare is paying twice for these drugs. 

5. Hospices did not meet care planning requirements for the majority of inpatient stays. Each patient is required to have an individual plan of care in hospice and the plan of care must meet specific requirements. The report shows 72 percent of inpatient stays lacked at least one important element of the care plan. It also shows in about half of inpatient stays, not all the required members participated in developing the care plans. Most often a pastoral, counselor or social worker was missing, but in 12 percent of stays, physicians weren't even involved, according to the report. 

6. Lastly, hospices did not provide enough services in 9 percent of inpatient stays. In particular, hospices often did not provide sufficient nursing, physician or medical social services, and in some cases the hospices were unable to manage patient symptoms or medications, according to the report. 

In response to the report, CMS Acting Administrator Andy Slavitt said in a statement that inpatient claims have remained flat over several years, according to a CMS analysis.

"CMS is also concerned that Medicare beneficiaries continue to have access to this important hospice service and CMS is working to improve appropriate use. As a result, CMS is developing a strategy that targets improper payments without unnecessarily increasing documentation and audit burden on legitimate providers," he said. 


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