Hospice leaders scrambling as fraud surveys expand nationwide
NHO calls government reviews seriously flawed’Hospice administrators across the country are bracing for a nationwide expansion of Operation Restore Trust (ORT), the Health Care Financing Administration’s (HCFA) investigation that last year recommended the recoupment of $8.9 million in Medicare reimbursements from a Florida hospice.
The Office of the Inspector General (OIG) has included funding in this year’s work plan to expand Medicare fraud investigations from the original five states — California, Illinois, Texas, New York, and Florida.
Under Operation Restore Trust, launched in 1995, HCFA is working in partnership with the OIG and state surveyors to avoid duplication of the auditing of facilities that receive Medicare reimbursements. Sparked by national press reports last month heralding ORT’s expansion, hospice leaders are scrambling to prepare for what they fear will be escalating scrutiny from the OIG.
Hospice administrators say they see the surveys as a threat to their facilities’ integrity and solvency. The National Hospice Organization in Arlington, VA, which reports being flooded with phone calls about the surveys, calls the reviews "seriously flawed" and accuses the government of "punishing hospice programs whose patients fail to die on time.’"
And many hospice leaders are confused about what to expect. "My understanding is the requirements are not really clear, the process is not really clear, and what they are looking for is not really clear," says Mary Bertram, RN, BSN, executive director of Dignita Hospice Care in Phoenix.
"This is the old story of sometimes you have a fly on the wall, and you try to kill it with a baseball bat," says Dale Smith, executive director of the American Academy of Hospice and Palliative Medicine in Gainesville, FL. "The OIG is saying that patients have been allowed to enter the system fraudulently, but if they were, the numbers are a tiny fraction" of what hospice sees — certainly not the widespread fraud the the government is suggesting, he says.
The last time ORT surveyors took a swipe at hospices, they recommended in mid-1996 that HCFA recoup $8.9 million of Medicare reimbursements from a Florida hospice. A second Florida hospice surveyed still awaits a final OIG report.
For the second push, state surveyors who are conducting the actual scrutinies for HCFA are again expected to focus their audits on Medicare billings for patient stays longer than 210 days and for patients discharged after the first benefit period.
Under the expanded survey initiative, state surveyors will audit hospice billings in addition to surveying for compliance under Medicare conditions of participation.
Neither HCFA nor OIG officials would respond to questions about the survey expansion, but hospice industry leaders speculate that failure to demonstrate compliance during these surveys could put hospices in jeopardy. Whatever the result, the surveys will likely cast a pall over the industry in other ways, experts say, as hospice administrators worry about the financial consequences of rejected claims, a negative perception in the community, and a decline in physician referrals. (For tips on preparing for the surveys, see story, p. 15.)
"If this kind of thing continues to go on," says Smith, "it will be very hard for us to try to predict the future of hospice."
Some hospices are all too familiar with the OIG survey process. In September 1995, state auditors pored over medical records at The Hospice of the Florida Suncoast, a large facility in Largo with an average patient count of 1,200. The hospice was randomly chosen for the audit. After examining roughly 300 patient medical records, auditors reported that the life expectancy of 176 patients had been incorrectly estimated. As a result, the OIG recommended last August that HCFA recover payments totalling $8.9 million. The Hospice of Lake & Sumter in Tavares, a second Florida facility that was audited, still awaits its fate.
The Largo hospice will likely appeal the OIG recommendations through its fiscal intermediary. "We have taken a very serious look at every one of the situations they have reviewed and feel confident we could appeal and prevail in most situations," says executive director Mary Labyak, MSSW, LCSW, immediate past president for the board of NHO.
Having experienced a survey firsthand, Labyak predicts that the fallout from more surveys will be devastating for the hospice industry. "I’m increasingly concerned [about] what kind of care is going to be available to dying people," she says. "The emphasis on [Medicare cost-cutting] is discouraging people from coming to hospice and discouraging physicians from referring."
Labyak says a staff member told her of a home visit following the audits during which a patient apologized for taking so long to die. The surveys are "making patients feel guilty for staying longer than 210 days and feel like they’re doing something wrong," she says. "What do we do with these people? These people are dying."
But even if the appeal is successful, the cost for the Largo hospice has already been enormous, Labyak says. She assigned staff to help the surveyors during the audit, taking time away from their work. She has had to devote time and energy to the aftermath of the audit, and she is dealing with legal bills for an appeal. "I would be very concerned about the ability of a lot of hospices to withstand this; it takes so much of your energy," Labyak says.
The NHO has expressed concerns about surveyors "second-guessing" physicians’ prognoses and perhaps changing their documentation requirements, with an official statement released a few weeks ago suggesting, "These reviews in Florida do not suggest fraud, rather they represent a difference in medical opinion on prognosis."
Anticipation of the expanded survey initiative is raising concerns at the Washington, DC-based Hospice Association of America as well. Executive director Diane M. Jones, MSW, ACSW, says she questions whether state surveyors have sufficient or appropriate training in Medicare billing procedures to handle the new task of auditing hospice billings. "One concern is that [state surveyors] are supposed to be trained and well-versed in the conditions of participation, but that doesn’t mean they are experts in the billing area; that’s kind of mixing apples and oranges," Jones says.
Lack of proper training, Jones explains, could lead to misinterpretation of the billing data. For example, if a state surveyor takes a sample of 10 Medicare billings and decides that five raise a red flag, that could lead to fiscal intermediaries summarily withholding 50% of hospice claims, Jones speculates. That, she says, could be an incorrect conclusion from such a statistically insignificant sampling but could easily happen with untrained surveyors.
"I don’t know that they are trained to survey on billing issues. That certainly raises my eyebrows, partly because then [hospice] agencies can be put on focused medical review for a period of time and will have their payments withheld, which can be a significant problem," she continues.
Although there are no hard statistical figures, there is anecdotal evidence of increased withholding of Medicare claims reimbursement following state surveys among the five states where the stepped up auditing has already begun. Andrea Dumat, owner of ALD Consultants, a health care consulting firm in Ophir, OR, says several hospice agencies in California have recently seen 60% to 70% of their Medicare claims withheld by fiscal intermediaries pending further investigation as a result of the Operation Restore Trust expansion. She declined to identify the hospices, citing client confidentiality.
In addition to cash flow problems caused by claims withholding, morale has suffered, Dumat says. "Moralewise, it really clobbers the hospice. They feel they’re doing everything wrong, and that impacts the way they’re doing business," she adds.
But it is the very nature of hospice that makes rigid survey criteria
difficult and at times self-defeating, Jones argues, because non-cancer
prognoses are not an exact science. "Hospices are really caught between
a rock and hard place in admitting appropriate patients and being able
to target prognoses appropriately," she says. "Hospices’ unique constellation
of services will often stabilize chronically ill patients who have reached
the terminal stage of their illness. They plateau, then hospices are forced
to make the decision of whether they should continue caring for them. If
they discharge them, they won’t continue to get the same level of services.
So they go back into the hospital, and they cost Medicare more money."
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