CMS Final Rule Could Lead to More Hospice Audits

The U.S. Centers for Medicare & Medicaid Services (CMS) issued its annual final rule for hospice payments in Fiscal Year 2020, including a payment rebasing that raises rates 2.7% for three higher-acuity levels of care and cuts routine home care by a corresponding 2.7%. With regulatory scrutiny on the rise, some hospice providers are concerned that increased audits associated with utilization of more expensive care could be an unintended consequence.

CMS raised payments for general inpatient care, continuous home care and inpatient respite care. Combined, these levels of care account for only 2% of days of hospice care in the United States, with the remaining 98% being routine home care. Prior to this rebasing, payment rates for those levels of care amounted to less than the cost of providing those types of care.

In recent years, regulators have increasingly targeted hospices for audits because of issues like live discharges, documentation errors and longer than average lengths of stay, particularly in the higher acuity care levels.


“One of the challenges in my mind is now CMS increasing your reimbursement for respite care, continuous home care, and general inpatient care, which is needed. But in GIP care, they are doing more audits,” said Clevis Parker, M.D., chief medical officer of Nathan Adelson Hospice told Hospice News. “So it’s like they’re saying, ‘We are going to pay you more to take care of patients in your inpatient facilities, but by the way we are going to be doing more audits on the more expensive levels of care.’ So it feels like a set up. ‘Come get it, but gotcha, now we are going to take that money back.’”

Many hospice leaders seem conflicted about the changes, praising the rate increases as necessary but furrowing their brows over the cuts for services that represent the lion’s share of their business. While margins for large for-profit hospices can better accommodate these changes, the 2.7% cut for routine home care is close to the average margin for nonprofits, according to the Medicare Payment Advisory Commission. For some, increasing utilization of higher acuity care might be necessary to ensure stable margins.

Organizations that operate their own inpatient facilities are most likely benefit from the raises.


“We have two inpatient centers, one within the walls of a hospital and one that is freestanding. This increase in the reimbursement better reflects the costs of providing that care,” Mary Ann Boccolini, president and CEO of Samaritan Healthcare & Hospice told Hospice News. “For us I think it will work. The 2.7 is a cut, but I think with general inpatient care increase it will balance out for us.”

The final rule also included a requirement that hospices provide an election statement addendum to the patient, listing the rationales for items, drugs, and services that the hospice has determined to be unrelated to the terminal illness. Submission of that document to CMS will become a condition for payment.

Hospice organizations have expressed concerns about the workload associated with this requirement , as well as the complexity of determining which services pertain to the terminal diagnosis and which do not.Advocacy groups, including the National Hospice & Palliative Care Organization (NHPCO) and the National Association for Home Care & Hospice (NAHC), opposed the requirement.

“We took a pretty hard line on the addendum, thinking it was really going to be a lot of extra paperwork. We are concerned about that, but we also want to make sure that patients and families have all the necessary information and that hospices are paying for things that are their responsibility,” Judi Lund Person, vice president, regulatory and compliance for NHPCO, told Hospice News. “The best news for us is that CMS did give a one year delay in implementation, because it will be a challenge for software vendors to get up to speed and it will be a challenge for vendors, and it will be challenge for hospices to get their processes in place.”

NAHC released a statement citing stakeholder concerns about the payment rebasing, for which the organization advocated a gradual phase-in over a number of years rather than making the rates immediately effective. NAHC also saw value in the one-year implementation period for the election statement requirement.

“We are encouraged that CMS recognizes the need to allow for additional time so that logistical and operational issues associated with the election statement and addendum requirements can be addressed,” NAHC President Bill Dombi said in the statement. “We look forward to working closely with CMS over the next year to limit the level of burden that these new requirements impose on hospice caregiving staff.”

Among the potential burdens is the need to acquire certain signatures for the election statement, which could slow down workflows that largely rely on electronic information.

“While noting that signatures are currently required in other aspects of the hospice and other Medicare benefits, in today’s communication technology environment and particularly CMS’ Patients over Paperwork initiatives, we believe that other methods of verifying that forms are shared could be used to remove some of the administrative burdens of collecting signatures each time an addendum is updated,” Aaron Tripp, vice president of reimbursement and financing policy for the aging services organization LeadingAge told Hospice News. 

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