Yesterday, CMS dropped a memo to state survey agencies titled, “Ensuring Consistency in the Hospice Survey Process to Identify Quality of Care Concerns and Potential Fraud Referrals”. The memo is available here: qso-25-06-hospice According to CMS, the memorandum aims to bolster current mechanisms for detecting instances where a hospice provider’s failure to adhere to the Conditions of Participation endangers patient health and safety, which may signal the necessity for a fraud referral.
The Memo really doesn’t address much of anything new in terms of the survey process and conditions of participation. The significant changes to the survey process occurred last year (2023) when CMS revised Hospice Appendix M of the State Operations Manual. The revisions CMS made are available here: QSO-23-08-HOSPICE
To me, the Memo from yesterday is designed to remind survey agencies of CMS’ intent to detect and pursue fraud in the Hospice industry, using the survey process as an enhanced tool for detection. CMS to date, has principally relied on whistleblower reports and claims audits to pursue fraud allegations.
Another persistent issue concerning the survey process is timeliness. CMS does not address this issue in the Memo, but it is commonly known that state agencies have had difficulty keeping up with all their healthcare regulatory functions (e.g., home health, SNF surveys), principally due to inadequate staffing numbers.
Per a study conducted by the GAO (Government Accountability Office) in 2023, published in May of 2024 ( Medicare Hospice: CMS Needs to Fully Implement Statutory Provisions and Prioritize Certain Overdue Surveys | U.S. GAO ), as of May 2023, about 10 percent of hospices participating in Medicare for 36 months or more were overdue for a survey.
Among the hospices with delayed surveys, more than a quarter have not undergone a standard survey for at least five years. Furthermore, 17 percent have had at least one serious quality deficiency previously, and approximately 11 percent had a severe and substantiated complaint. While CMS sets annual survey priorities, it offers no guidance on how to prioritize overdue surveys. The full report download is available at the link above. A one-page summary is available here: gao-24-106442-highlights
The challenge CMS faces is actually two-fold. First, surveys are not consistent nor timely. Even among accrediting bodies (ACHC, JCAHO), the focus tends to be very paperwork and documentation centric. Second, the industry is growing, and fraudulent actors are plentiful.
Investigations reveal that potentially hundreds of newly licensed hospices have defrauded Medicare out of millions of dollars in recent years, while delivering substandard care or none at all. These providers have participated in referral kickback schemes, admitted patients not qualified for hospice care, and falsely informed them of terminal illnesses. In June, I wrote about the present state of hospice fraud and abuse and the various illustrative cases CMS has pursued. https://rhislop3.com/2024/06/24/hospice-fraud-and-abuse-front-and-center/
CMS has been making various adjustments to various COP and reporting measures, mostly around clarified definitions and increased enforcement elements. Typically, these tweaks follow annual rule making tracks where CMS adjusts payment and concurrently, makes policy changes to existing programmatic elements. From time to time, these annual rules include elements that infer direction or moreover, focused regulatory changes.
An example occurred in the 2025 Hospice Final Rule (issued in July of this year). The Centers for Medicare & Medicaid Services (CMS) implemented heightened penalties in the finalized 2024 hospice rule for non-compliance with quality reporting requirements. Starting this year, hospices that fail to report their quality measures will incur a 4% reduction in payments, an increase from the previous 2% penalty. More on the Hospice proposed 2025 rule and the 2024 rule is here: Wednesday Feature: Hospice Proposed Rule for 2025 – Reg’s Blog (rhislop3.com)
Healthcare fraud, not just hospice, is a serious issue. According to the U.S. Sentencing Commission, in 2023, 447 individuals were sentenced for committing healthcare fraud. Health Care Fraud | United States Sentencing Commission
- 67.6% of individuals sentenced for health care fraud were men.
- 40.9% were White, 27.1% were Black, 23.7% were Hispanic, and 8.3% were Other races.
- Their average age was 50 years.
- 89.9% were United States citizens.
- 89.5% had little or no prior criminal history (Criminal History Category I).
- The median loss for these offenses was $1,416,231;
- 24.4% involved loss amounts of less than $250,000;
- 4.7% involved loss amounts greater than $9,500,000.