As CMS, OIG Audits Continue, Hospices Prepare Themselves

Providers are focused on compliance as regulators increasingly zero in on the hospice space. With auditory action on the rise in the industry and anticipated to continue, hospices will need to be proactive in compliance planning and education to position themselves for success.

The U.S. Centers for Medicare & Medicaid Services (CMS and the U.S. Department of Health & Human Services Office of the Inspector General (OIG) continues to look hard at the industry to address concerns ranging from billing and claims to patient eligibility of the hospice benefit.

New hospice investigations are forthcoming from the OIG that address the ways that the inpatient aggregate payment cap is calculated, as well as payments that are made outside of the Medicare Hospice Benefit. The office is also looking at specific providers’ compliance with law and regulation and Medicare payments for chronic disease management.


“Auditing is the new norm. It is not ‘if’ you get an audit, it is ‘when’ will you get an audit,” said Kelly Murray in a presentation at the National Hospice and Palliative Care Organization (NHPCO) Interdisciplinary Conference. “Be prepared. Start taking actions now. Look at comparative billing reports, look at the OIG reports. There should be no surprises for you and your organization. Keep your work plans fluid and flexible so that when audits come through the door, everything else can and should go to the wayside to address it.”

Murray, who is the senior director of integrity at Ohio-based Bella Care Hospice, noted having a dedicated compliance team of interdisciplinary staff to develop a work plan against audits.

“There’s many things that can put your hospice on the radar for an audit,” said Murray. “A compliance department is really important when it comes to auditing and knowing your risks. Long lengths of stay are outliers, and so are high utilization of level of care, medically unnecessary services and insufficient documentation to support reimbursement. An effective work plan to ensure compliance in any area and make change really is a team effort. A good quality program is a good compliance program as well. They are two separate things, but they do work so closely together. The compliance committee puts the work plan together around what’s going on out there in the field. They evaluate that work plan and discuss what could be changed. Your governing body should be on your auditing team as well, along with your billing contractors.”


Audits can also center around a hospice’s licensure, quality of patient care and labor law compliance, among other areas. Education around the evolving compliance and regulatory issues in the industry will be key for end-of-life care providers to weather any auditing storms on the horizon.

Regulators such as CMS revise rules and guidance periodically. Hospices must keep current with these revisions to remain in compliance.

“It’s incredibly important to know what the compliance issues are and what the rules are,” Murray stated. “The rules change all the time and educating your staff is your best defense against audits. Your leaders need to know what’s important for field and office staff to know. There’s really a high level of turnover in hospice, so don’t take for granted that your staff genuinely understands what goes into all the levels of care and how to document that care. Make sure they are educated on the rules and regulations. There’s really no set template for a compliance work plan, but it should be individualized and based on things that are actually happening in your organization.”

Even if hospices follow correct procedures in accordance with current standards, CMS may cite deficiencies if documentation of those activities is incomplete or inaccurate. Staff education has been a strategy for providers in facing documentation challenges, with hospice eligibility a top reason for claim denials. Of particular importance are hospice certification and recertification documents and the hospice election statement, including the newly required addendum.

The addendum rule that took effect Oct. 1, 2020, requires that hospices provide Medicare beneficiaries with a written statement called a “Patient Notification of Hospice Non-Covered Items, Services, and Drugs” detailing the conditions, items, services or drugs that are determined to be unrelated to their terminal illness and conditions and not covered by the hospice benefit.

All patients admitted on or before the effective date have the option to request the notice in writing upon electing the Medicare Hospice Benefit. Hospices must issue the written addendum within 72 hours or three days of a request made by the beneficiary, their representative, a non-hospice provider or a medical contractor.

“Now more than ever with the addendum state being thrusted upon us, it’s important to have a valid hospice election statement,” said Murray. “You can review election statements to ensure compliance with all components. At our agency, we have a billing audit tool that we use and 100 percent of our election statements get run through this before billing and are internally audited. Monitor that your staff is educated on the election statement and that this is part of your employee orientation process. They really need to understand what they’re saying to this patient with these election statements. Add it to your annual compliance education with all staff.”

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