The report suggests significant lapses in 2012 GIP service claims and recommends that CMS implement additional oversight and enforcement options. However, CMS also expresses patient access concerns.
On March 31, the US Department of Health and Human Services’ Office of Inspector General (OIG) issued its first-ever clinical review report of Medicare hospice general inpatient (GIP) level of care claims (OIG Report). The OIG Report identifies significant inappropriate hospice billings for GIP services, the second most highly paid of the four levels of Medicare reimbursement for hospice services. OIG estimated that, for 2012 alone, hospices “inappropriately” billed Medicare $268 million for GIP services. This OIG report has already resulted in additional negative scrutiny and press coverage of hospice care, including in major media outlets, such as the New York Times. In light of the OIG Report, many hospices should assess anew their internal controls related to their use of the GIP level of care, with additional government scrutiny likely in the future for this essential hospice service.
As noted in the OIG Report, the OIG selected a stratified random sample of all 2012 GIP stays and obtained corresponding medical records from various hospices. OIG noted that GIP is intended as short-term inpatient care for symptom management and pain control that cannot be handled in other settings. After completing its medical review, which took more than two years from when hospice records were requested, the OIG concluded that 20% of the GIP stays were not warranted by patients’ clinical conditions. OIG also found that 10% of the GIP stays included more GIP days than were warranted and that 1% involved patients who either had not elected hospice care or who did not have a terminal illness.
The OIG Report found that hospices “commonly” billed for GIP services when a patient did not have “uncontrolled pain or unmanaged symptoms.” Florida, Ohio, and Arizona hospices had the highest ratios of inappropriate GIP stays in the sample, and for-profit hospices were significantly more likely to have billed inappropriately for GIP (41% of stays in the sample versus 27% of stays billed inappropriately at nonprofit and government-owned hospices), according to the OIG Report. Moreover, OIG identified that hospices were more likely to inappropriately bill for GIP when inpatient care was provided in a skilled nursing facility (SNF) setting as compared to a hospital or hospice inpatient unit setting. Further, OIG noted that Medicare Part D inappropriately paid for more than half (110 of 198) of the drugs billed to Part D that were provided to beneficiaries in its sampled GIP stays when the drugs were used for pain or symptom control related to the GIP stay. Finally, OIG found that for 85% of the GIP stays it audited, at least one key element of the hospices’ care plans were missing or that the hospices sometimes provided poor-quality care.
For 15% of the inappropriate GIP stays that it identified, OIG indicated that hospices used GIP level of care because of beneficiary caregiver issues (e.g., a caregiver was overwhelmed with the burden of care). According to OIG, GIP is not intended to be used in such situations under Medicare standards; rather, OIG noted that the respite level of care, reimbursed at a much lower amount, should be used to provide caregivers with a break.
As noted in the Appendix of the OIG Report, OIG contracted with a medical review contractor to assess hospice records. The OIG did not provide the hospices whose records were selected as part of the sample with an opportunity to provide any input or response to the medical review findings or on the use of OIG’s standardized review instrument. Given that medical review in the hospice context is susceptible to more than one reasonable clinical finding, and without more detail on how OIG conducted its medical review, it is difficult to know if OIG applied what many hospice providers would consider reasonable review standards.
Nonetheless, as a result of its review, OIG recommended that the Centers for Medicare and Medicaid Services (CMS) undertake a number of corrective actions related to GIP:
CMS concurred with each of these OIG recommendations, though its comments were much more guarded than OIG characterized in its report, with CMS noting that GIP payments account for only 1.5% of Medicare hospice expenditures and that GIP utilization has remained flat over several years. Most importantly, CMS commented that it is concerned that Medicare beneficiaries continue to have access to this important hospice service.
Although CMS agreed with the OIG recommendations outlined above, it may take months, if not years, for the additional Medicare agency oversight to occur. Nonetheless, with Medicare contractor claim and record review activities often focused on services furnished in the previous one to three years, hospices are wise to assess now their internal controls for use of GIP level of care. This may involve careful coordination with a hospice’s GIP contractor, such as a hospital or SNF, whose clinical records are often crucial for establishing in a retrospective record review the clinical need for the higher level of care to address acute symptom management and pain control in a facility setting. Additionally, GIP stays that last more than a few days are likely to face additional payment scrutiny in the future, given OIG’s conclusion that GIP level of care is intended as “short-term” care. As OIG notes in its report, the Medicare regulations do not define what is meant by “short-term,” but hospices may want to apply additional internal review protocols for GIP stays that last longer than seven days, the recommendation made in the OIG Report for prepayment reviews, to ensure appropriate hospice care.
Read the full report: Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care.
If you have any questions about the OIG Report or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
 Medicare Is Often Overbilled by Hospices, and Pays Twice for Some Drugs (April 2, 2016), p. A22, Robert Pear.
 In an apparent contradiction to this finding, one of the limitations noted by OIG on page 7 of the OIG Report is that OIG did not independently verify the beneficiary’s prognosis for a life expectancy of six months or less.
 See United States of America v. AseraCare Inc., Memorandum Opinion, 2:12-cv-245-KOB (March 31, 2016 N.D. AL). See False Claims Act Trial Sets Precedent for Future Cases for more information about this case.
 CMS comments expressed some concerns over this recommendation as it could affect access to care and indicated it would work with the hospice community to explore other options for expanded physician involvement.