As the Need for Hospice and Palliative Care Expands, So Will Scrutiny on Providers

Palliative care is specialized medical care for people living with a serious illness, such as cancer or heart failure. Patients may receive medical care aimed at providing relief from their symptoms and improving their quality of life, while also pursuing curative treatments. By contrast, hospice care focuses on the comfort and quality of life of a person with a serious illness who is approaching the end of life (i.e., considered by a qualified health care provider to have six months or fewer to live), and treatments aimed at curing the patient’s illness are withdrawn.  

According to the United States Census Bureau, by 2030, all Baby Boomers will be 65 years of age or older, which means that the demand for palliative care, hospice care and home health care is likely to significantly increase over the next decade.  With new entrants expected in the marketplace, and the anticipated continuing use of telehealth platforms in the delivery of care, Medicare, Medicaid and commercial payors will likely increase oversight in these areas and conduct frequent audits to reduce fraud, waste, and abuse, and to ensure quality of care.

The Department of Health and Human Services’ Office of Inspector General (“OIG”) regularly audits healthcare providers to evaluate their compliance with Medicare requirements. A recent audit of a Hospice Care Center (hereinafter, the “Center”) analyzed whether services met coverage, medical necessity, and coding requirements. During the audit period 38,986 claims were submitted by the Center for a total reimbursement amount of $148.5 million from Medicare during the period of July 2015 through June 2017.From the Center’s 38,986 submitted claims, the OIG reviewed 100 randomly selected claims and concluded that 49 of the 100 claims lacked clinical records to support the beneficiary’s terminal prognosis, or the level of care claimed, and found that in some cases, no services were provided. Extrapolating the 49% error rate across the universe of claims during the 2-year period, the OIG determined that the Center received at least $47.4 Million in Medicare reimbursement for hospice services that did not comply with Medicare requirements. The Center’s appeal challenged the validity of the statistical analysis and extrapolation methods employed by the OIG, but the findings were ultimately upheld as valid.

The OIG recommended that the Center: (i) refund the Federal Government a portion of the estimated $47.4 million in Medicare overpayments that are within the 4-year claims reopening period; (ii) exercise reasonable diligence to identify, report, and return overpayments in accordance with the 60-day rule; and (iii) strengthen its internal policies and procedures to ensure that services comply with Medicare requirements.  

How Frier Levitt Can Help

Given the anticipated explosive growth in the need for palliative care, hospice care, and home health care, and corresponding significant expense to Federal health care programs and commercial payors, providers in this space should expect scrutiny of their claims. Providers should develop comprehensive compliance plans to enhance their adherence to payor requirements, and should confer with experienced health care counsel when facing any payor audit of claims, including those presented as “routine” claims reviews.

Frier Levitt has a team of experienced healthcare attorneys, who regularly represent clients in matters related to Medicare and commercial payor audits and clawbacks of overpayments, and in many cases, our attorneys have been able to reduce the impact of an adverse determination. If you are a hospice or palliative care provider with questions about a payor audit or other regulatory compliance matters, contact Frier Levitt to speak with an attorney.

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