OIG Reports Published on Hospice
In a post I wrote at the end of July concerning CMS’ 2010 rate announcement and compliance and regulatory trends, I indicated how the OIG was becoming more vigilant in reviewing hospice utilization, lengths of stay and in particular, the correlation between lengths of stay and hospice patients in an SNF. This past month, in mid-September, the OIG released two reports on the coverage and utilization characteristics of hospice patients in an SNF.
The first report concentrated on whether hospice patients residing in the SNF actually met the coverage criteria for hospice benefit eligibility. In order for a patient to receive hospice coverage, the following criteria must be met;
- Services are reasonable and necessary
- The Patient or his/her designated, legal representative elects care per the regulations
- Prior to service commencing, a plan of care is developed
- Hospice services are provided in accordance with the plan of care
- Patient has a terminal condition(s) and is certified as such
Within the report, the OIG indicated that a substantial percentage of claims by hospices for patients within an SNF failed to meet the above criteria. For example, of the claims reviewed by the OIG, 82% did not meet the criteria resulting in erroneous payments of $1.8 billion. Within the 82%, the OIG indicated that 63% failed to have a plan of care established, 33% did not meet the election requirements, 31% failed to provide care as detailed in the plan of care and 4% did not meet the terminal condition requirement. As a result of these findings, the OIG recommended that CMS implement new methods for educating hospices on the requirements as well as conduct routine, targeted reviews as well as additional oversight work to improve hospice compliance with the requirements.
In the second report, the OIG examined the nature of hospice care provided with SNF settings. The report found that the average claim for hospice care amounted to $960 per week for a total of $2.59 billion in 2005 - 2006. During this same period, the number of hospice patients residing in an SNF increased by 3%. The OIG also indicated that the average hospice patient in an SNF received 4.2 visits per week with 96% of the claims receiving professional nursing services, 73% received aide services and 68% receiving medical social work services. The report was intended as informational for CMS.
What the next steps from CMS will be as a result of this report are unknown. As I have written before, it is likely that CMS will continue to conduct more reviews, probes and audits of claims, particularly those arising within an SNF setting. It is also more likely than not, that CMS will begin to deny all or portions of stays for the same technical reasons that the OIG found. I have seen more scrutiny being paid by CMS on probe reviews to diagnoses and more denials as a result of insufficient support (documentation) of terminal status. I think it is fair to say that regulatory activity will assuredly increase for the Hospice industry.
Hospice Update
In March, I wrote about the MedPAC recommendations to change the Medicare Hospice program and payment system. Yesterday, CMS announced the final (2010) payment for Hospice as well as the implementation structure of some key MedPAC recommendations. The final rule will be published August 6th in the Federal Register.
- For FY 2010 (commencing October 1), the Medicare payment for Hospice will inflate 1.4%. This increase is a net of a 2.1% increase in the “hospital market basket”, offset by a 0.7% reduction via the CMS plan to phase out the Budget Neutrality Factor (BNAF).
- CMS has revised, from its 2009 final rule, the BNAF phase out to seven years. In 2010, the BNAF is reduced by 10% and then from 2011 to 2016, the reduction is 15% in each year.
- CMS also adopted the MedPAC recommendation requiring physicians to write a more expanded narrative supporting the diagnosis and six months or less of life expectancy.
The trend evident in this CMS rule is a continued adoption policy of the MedPAC recommendations released this year and corresponding to previous year’s releases.
In an unrelated publication, the OIG has indicated its review and audit targets for Hospices for its upcoming year.
- In continuing work for 2009, the OIG will review Medicare Hospice care provided to nursing home residents for services and appropriateness. As a result of an increase of spending from $3.5 billion to $7 billion on hospice care provided to nursing home residents between 2001 and 2004, the OIG has concluded that these patients (nursing home) when covered as Hospice beneficiaries, receive 46% fewer nursing and aid services than Hospice patients residing at home. The OIG will conduct record reviews of the hospice services provided to nursing home patients to determine if the plan of care, the services provided, and the payment are appropriate.
- Beginning in 2009, the OIG will review physician billing practices for Medicare Hospice beneficiaries. Under the Medicare Hospice benefit, Physician services are covered under the Hospice payment. Physicians that are affiliated with, contracted or employed by the Hospice are to receive their payment for services provided via the Hospice as a part of the payment the Hospice received from Medicare. The OIG review is targeted at determining whether “double billing” for services provided to Hospice patients is occurring and to what extent.
- Beginning in 2009, the OIG will review the utilization trends associated with the Medicare Hospice benefit. When first created under TEFRA in 1982, the benefit provided for 210 days of care. When the program was amended via the Balanced Budget Act of 1997, CMS expanded the amount of coverage to an “unlimited’ number of days, as qualified by prognosis and diagnosis for the patient. Since the 1997 amendment, the number of diagnoses covered has expanded dramatically as has the length of stay in the Hospice program. The OIG intends to examine the characteristics of stays, diagnoses and utilization, particularly between for-profit and non-profit Hospice providers.
Duties of Boards: An OIG Perspective
This seemed to be a natural successor topic to my last post, “Why Quality Matters”; principally arising out of recent press releases from the OIG. For example, in June the OIG reported that it had recovered $2.4 Billion in fraud, waste and abuse. In July, an OIG release reported that a Nursing Home Executive was banned from being involved in any Federal health care programs as part of a settlement with the OIG. Undoubtedly, more news of the same vein will be forthcoming, particularly since the Stimulus Bill included additional dollars for the OIG to stay on the offensive in “fighting waste, fraud and abuse”. With some reconciled legislation on health care reform also due out in the coming months, a portion of the savings to pay for the added benefits coming from recovery actions, greater scrutinty will no doubt be placed on providers and individuals by the OIG on billing and quality of care activities.
Having been a CEO in a large health care organization I can attest that Boards (especially non-profit boards) believe, more often than not, that compliance and quality is management’s job. I can also attest that all too often, limited time is provided at meetings for matters of quality and compliance. Unfortunately, from all too many conversations with colleagues over the years, I know that even CEOs don’t pay enough attention to the rigors of quality and compliance and as a result, their boards definitely don’t understand how important these matters are – organizationally and personally.
A seemingly complicated lanscape (quality and compliance and the Federal requirements) is perhaps the primary reason why so many organizations fail to fully and adequately embrace what the OIG is actually getting at. In reality, most of the core provisions and what needs to occur at the organizational level is fairly straightforward. Legal counsel that specializes in health care is usually a safe, first step in terms of board education and laying out a compliance program. Grasping the basics however, is an operating responsibility and for most organizations and their boards, they should understand the following.
- Boards have two main responsibilities in this area – the Duty of Care and the Duty of Loyalty. The OIG has made it plain that these fiduciary duties include the maintenance of a corporate compliance program.
- Boards have the oversight obligations to the Quality/Compliance Plan and the Corporate Integrity Agreement. The OIG via recent cases and actions has indicated that the Board must review compliance with federal health care programs at least quarterly. Documentation standards have also been raised to the point where Board resolutions and individual certifications are now the benchmarks for directors to substantiate agreement with board activities on the compliance front and to document board level reporting and investigative actions into quality and compliance at the organizational level.
- Board members are at risk “personally” in terms of liability if the Duty of Care is breached. The OIG has been issuing papers for several years encouraging boards to become more active and more knowledgeable about the federal health care programs their organizations are participating in. The OIG, citing a case involving Caremark has indicated that, “directors under extreme circumstances may be at personal risk if they fail to reasonably oversee the organization’s compliance program or act as mere passive recipients of information”.
Taking the above “core” into account, Boards can and should take a few very simple steps (of course this should be part of a written program adopted by the Board) to achieve and to maintain, essential compliance (legal counsel again is advisable here to make sure that all “Is” are dotted and “Ts” are crossed).
- Quality is a Standing Subject/Report at Each Meeting: The OIG says a minimum of “quarterly” and frankly, in today’s environment that is not enough. This report should be structured and management and other organizational representatives need to bring quality information directly to all members of the Board.
- Document Board Engagement: Board members need to be engaged and minutes should reflect questions and a back and forth conversation to illustrate a dialogue about quality.
- Board Statements: The Board should adopt a resolution and perhaps even sign on to a mission statement commiting each director to his/her Duty of Care.
- Allocate Resources: The Board needs to be active participants in strategic planning and budgeting processes where resources such as staff, equipment and infrastructure are allocated to maintain and improve, the delivery of care to patients and residents.
- Create Structure and Processes: The Board should create for itself, formal programs and processes to solicit feedback beyond information presented by management. For example, the Board should seek education on quality matters and matters of compliance. The Board should require reporting of turnover, resident/patient satisfaction, complaints, and key quality indicators. The Board should also seek outside counsel (physicians, clinicians and other experts) to from time to time, provide additional information and resources to its members and to attend on behalf of the Board, meetings where quality matters are discussed as an “independent” resource or auditor to the Board.
- Implement Accountability: The Board’s chief duty is to assure not just that information is freely flowing but that standards are met and when they are not, corrective action is taken. The Board must assure that management is held accountable for inadequate quality and compliance and that corrective action is taken immediately and reported back to the Board.
It is important to note that these steps are not guarantees of compliance with OIG requirements but certainly, a fabulous practical start – especially if memorialized by action and written documentation. What I can guarantee will occur if these steps are taken and implementation is done carefully and correctly (not just as an exercise in “paper” compliance) is the following.
- Culture of Quality: The organization begins to develop a culture of quality. The Board sets the tone for management and employees and that tone is an expectation of high levels of quality in resident and patient care. The priority is clearly known that quality is as important as financial results.
- Finances and Quality are Connected: When the Board is engaged with equal attention to the quality of care delivered, a better allocation of resources and a better strategic plan and budget is built. The Board becomes far more aware of how resource use is and should be tied, to the ultimate product delivered to patients and residents.
- Quality and Success are Connected: The quality of care is tied to every aspect of an organization (see last post, “Why Quality Matters”) from liability to malpractice to regulatory citations to billing audits to reputation and ultimately, volume. Quality improves staff retention, reduces complaints and regulatory actions and improves customer retention and supply.
The conclusions here are quite simple: Boards and individual Directors need to become more engaged in oversight and inquiry of their organization’s delivery of care to patients and residents. Additionally, given the link between payment and compliance under Federal health care programs (Medicare and Medicaid), Boards have a duty to make certain that compliance programs are in place, effective, and provide detailed enough information to the Board so that the pitfalls associated with individual director liability and organizational criminal and civil penalties can be avoided. In short, compliance programs need to be in place which monitor not only the delivery of care but the billing practices thereto, especially pertaining to Medicare and Medicaid.
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