OIG Report on Hospice Vulnerabilities: Recommendations Receive Lukewarm Support from CMS

August 28, 2018

The Office of Inspector General Portfolio Report is a rehash of the watchdog agency’s 2006–2016 findings on quality of care concerns and program integrity issues. The report, which garnered some critical press attention for hospices, foreshadows continued audit pressure on hospice organizations. OIG calls for the Centers for Medicare & Medicaid Services (CMS) to increase oversight activity, change hospice payment structures, and conduct additional monitoring and public reporting. CMS agrees with some but not all OIG recommendations. Hospices should assess how those recommendations embraced by CMS could affect their operations and hospice care.


The Office of Inspector General (OIG) of the US Department of Health and Human Services issued a report on July 31 titled “Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity.” OIG characterizes this report as a “Portfolio,” a term the agency has used over the past few years to identify large-scale reports describing problems in certain industries. (For instance, OIG issued a portfolio on personal care service in 2012 and one on chiropractic services earlier this year.) In the hospice Portfolio, OIG examined information from prior OIG audits, evaluations, and investigations, some of them focused on hospice services over a decade old, and focused its review on fraud vulnerabilities related to the Medicare hospice benefit, including program integrity and quality of care concerns.

The first major (and obvious) trend highlighted by OIG is that hospice use has grown steadily over the past decade, with a focus on increased spending, increased hospice use, and therefore increased number of Medicare beneficiaries receiving hospice care. While true, hospice is widely regarded as historically underutilized, and also a less costly alternative to inpatient hospital care. Additionally, in the last 13 years, the number of Medicare beneficiaries has grown. Although OIG recognizes hospice as an “increasingly important benefit,” OIG does not appear to give credit to the significant benefits afforded to beneficiaries who elect hospice care. And, what’s more, OIG does not acknowledge the significant subjectivity inherent in clinical decisionmaking related to the Medicare hospice eligibility criteria. By implying that an increase in the delivery of hospice services has been secured through fraud or abuse, without sufficient context, the Portfolio may seem unduly harsh. Take the following chart, for instance. OIG identifies supposed “Vulnerabilities” in hospice and puts 2016 Medicare hospice spending in red as a suggestion that there is something inappropriate about that aggregate Medicare spend. And yet, this amount pales in comparison to the $215 billion that Medicare paid hospitals for inpatient and outpatient services in the same year. Not surprisingly, with the increase in Medicare beneficiaries, hospital spending has also grown steadily.

Infographic - Datasource Item: Vulnerabilities in Hospice Care
Source: Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio, OEI-02-16-00570, July 2018.

In support of its program integrity concerns related to hospice, the Portfolio reiterates the same enforcement trends well known in the industry. But the Portfolio also calls out quality of care issues including failure to adequately manage pain symptoms, inadequate clinical services, lack of physician visits and weekend care, and fewer services than set forth in plans of care. Those are serious concerns that cannot be ignored even with the considerable clinical subjectivity inherent in hospice care. OIG also criticizes the hospice payment structure by suggesting that the current framework, “[creates] incentives for hospices to minimize their services and seek beneficiaries who have uncomplicated needs.”

In addition to its Portfolio findings from over a decade of hospice audits and inspections, OIG recommends specific actions for CMS to implement. OIG’s recommendations include the following:

  • Strengthening of the survey process to better ensure that hospices provide beneficiaries with needed services and quality care
  • Pursuing statutory authority to establish additional remedies (i.e., sanctions) for hospices with poor performance
  • Developing and disseminating additional information on hospices, including complaint investigations
  • Providing education to beneficiaries and their families and caregivers about the hospice benefit
  • Promoting physician involvement and accountability in hospice care
  • Strengthening oversight of hospices by analyzing claims data to target specific hospice programs
  • Correlating hospice payment to beneficiary care needs and quality of care
  • Implementing a comprehensive prepayment review strategy to address lengthy general inpatient (GIP) care stays

All told, OIG made 15 specific recommendations to CMS, which rejected more than half of them. In its response, CMS highlighted statutory prohibitions to some of the recommendations provided by OIG and expressed skepticism over some of the recommendations as merely adding additional layers of regulatory burden without necessarily leading to increased compliance or better care for beneficiaries. For example, OIG recommended that hospices obtain a physician order to change the level of care to general inpatient care. OIG also recommended that hospices have physicians sign off on the higher level of care at reasonable intervals. CMS disagreed with those recommendations, finding that the hospital interdisciplinary group (IDG), which is composed of a physician, nurse, social worker, and counselor are already required to approve GIP. CMS rejected both of these recommendations as unnecessary additional regulatory layers at a time when the administration is trying to reduce physician paperwork burdens, and discussed CMS’s goal to balance the burden placed on providers by hospice program requirements.

For the recommendations that CMS concurred with, it may take months, if not years, for CMS ultimately to implement them. OIG recommended that CMS seek statutory authority to establish additional remedies for hospices with poor performance. While CMS agreed with this recommendation, it will take time to further develop the parameters of such remedies. Similarly, OIG recommended that CMS take actions to follow up with hospices that have practices or characteristics which raise concerns. CMS agreed but will need to identify parameters around such follow up. In the meantime, hospices should take note of the Portfolio and anticipate what it will mean from an increased audit scrutiny and enforcement perspective. Armed with the findings of the Portfolio, US Department of Justice, FBI, OIG, and Medicare program integrity auditors will likely continue to focus on hospice payment issues, including higher level of care billing and long length of stay. Hospices and their compliance and QAPI staff would be well advised to consider and implement appropriate admissions and internal review protocols, particularly for those that fall into a higher risk category as identified by PEPPER reports or other credible data.


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