On July 30, 2018, OIG released “Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio” (the Report).  The Report reviews hospice care since 2005 and describes key vulnerabilities that OIG has identified and continues to monitor. 

Given the increasing importance of the hospice benefit to Medicare beneficiaries, OIG undertook this evaluation and audit of the hospice program.  Based on its evaluation, OIG made the following findings:

• Use of Hospice Has Steadily Increased Over the Past Decade.  In 2016, Medicare paid $16.7 billion for the hospice care of approximately 1.4 million beneficiaries.  The number of Medicare beneficiaries seeking hospice care benefits has increased by 53 percent since 2006. 

• Inadequate Services and Poor Quality Care.  OIG claimed that hospices provided fewer services than outlined in the plans of care for 31 percent of claims for hospice beneficiaries residing in nursing facilities.  OIG also claimed that hospices did not provide adequate nursing, physician, or medical social services in nine percent of general inpatient care stays in 2012.  In addition, OIG noted that hospices often fail to meet the plan of care requirements, finding that hospices did not meet the plan of care requirements in 85 percent of general inpatient care stays in 2012.  OIG claimed to have discovered a number of fraud schemes in hospice care, such as schemes involving paying recruiters to target beneficiaries who are not eligible for hospice care, or schemes involving the inappropriate certifying of beneficiaries. 

• Beneficiaries Lack Crucial Information to Aid in Making Informed Decisions About Hospice Care.  While CMS launched the Hospice Compare website for comparing hospices in August 2017, the site lacks crucial information about the quality of care at individual hospices.  In addition, OIG claimed that hospices often provide incomplete or inaccurate information on election statements.  Specifically, OIG found in its review that for 35 percent of general inpatient care stays, hospices’ election statements did not have required information or had other vulnerabilities, such as failing to specify whether the beneficiary was electing the Medicare, Medicaid, or other insurance hospice benefit.

• Inappropriate Billing. OIG claims to have found improper payments ranging from $447,000 to $1.2 million for services not meeting Medicare requirements.  In many instances, OIG claimed that the hospices billed for inappropriate levels of care, lacked required certifications of terminal illness, or did not have sufficient clinical documentation. 

• Improper Incentives to Minimize Services and Find Beneficiaries with Uncomplicated Needs.  OIG found that the current payment system for hospice creates financial incentives that may cause hospices to seek out certain beneficiaries over others, such as beneficiaries who are likely to have long lengths of stays or fewer needs, as these beneficiaries may offer hospices the greatest financial gain.

With the goals of improving quality of care and strengthening program integrity, OIG made several recommendations to CMS, including that CMS:

• Strengthen the survey process;
• Seek statutory authority to establish additional remedies for hospices with poor performance;
• Develop and disseminate additional information on hospices, including complaint investigations so that beneficiaries can make better decisions about their care;
• Provide additional education to beneficiaries and their families about the hospice benefit;
• Promote physician involvement and accountability;
• Increase oversight of hospices to decrease inappropriate billing; and
• Take steps to tie payments to beneficiaries’ needs and quality of care.

The Report can be found here.