Hospice Providers Seeing an Uptick in Regulatory Audits

Hospice providers have remained on high alert as regulators increasingly hone in on the industry. While regulatory enforcement activity temporarily stalled last year due to the coronavirus pandemic, audits have since resumed. These events can be expensive and time consuming for providers. Complete and accurate documentation will be key for hospices to ward off and respond to auditory review.

The U.S. Centers for Medicare & Medicaid Services (CMS) suspended audits and medical reviews by Medicare Administrative Contractors (MACs) in July 2020, but resumed enforcement activity by August, despite the continued status of the federally declared COVID-19 national emergency.

Hospice providers remain concerned about facing a potential audit as the public health emergency persists. COVID-19 continues its spread across the country, with nearly 444,000 new cases and more than 5,000 deaths nationwide in the last week alone, according to data from the U.S. Centers for Disease Control and Prevention (CDC).


In recent months, regulators seem to be zeroing in on claims filed through Medicaid.

“It looks like the Medicaid side of this from the federal level is heating up again,” Bryan Nowicki, hospice attorney for Husch Blackwell, said during a recent podcast. “During the interim, hospices may have had their state, or their particular state Medicaid agency, doing audits and investigations, but now we see the feds coming back into it.”

Resumed audit activity is anticipated to swing into full force as regulators continue to keep a close watch on the hospice sector. CMS indicated that hospices selected for review should discuss any pandemic-related hardships with their contractor if their ability to respond to the audit in a timely fashion is impacted.


UPIC entities contract with CMS to conduct investigations and audits related to activities such as potential fraud, waste or abuse within Medicare and Medicaid programs, operating in geographic jurisdictions.

UPIC Medicaid audits typically include provider intake questionnaires that hospices must complete. A new feature to these questionnaires is a suggested conference call with the auditor to address questions. This enables hospices to discuss how they prepared the documents and how that documentation in the medical record flows into their billing, according to Nowicki.

Hospice utilization among Medicare decedents rose to exceed 50% for the first time during 2018, according to the U.S. Centers for Medicare & Medicare Services (CMS). As utilization climbs, so does the amount of dollars CMS spends on hospice care, spurring the agency to step up enforcement in an effort to control costs. Medicare hospice expenditures rise by about $1 billion annually.

Some Medicaid auditor requests have now looped in the U.S. Department of Health and Human Services Office of Inspector General (OIG), according to Erin Burns, associate hospice attorney for Husch Blackwell. 

The OIG in late 2018 issued a report on payment-related vulnerabilities in the Medicare hospice program. This was the first in a series of OIG reports throughout 2018 and 2019 that identified payment and quality-related problems in hospices nationwide. Based on these findings, OIG issued recommendations that CMS strengthen oversight over hospices “that engage in practices that raise concerns.”

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.

Auditors aim to address concerns ranging from billing and claims to patient eligibility for the hospice benefit. Hospices will need to keep up with periodically revised rules and guidance to remain in compliance.

Hospices with solid documentation policies may stave off big losses resulting from auditory action. Documentation must accurately reflect the patient’s conditions, abilities and environment. Even when hospices are in accordance with current standards, CMS may cite deficiencies if documentation of those activities is incomplete or inaccurate.

Documentation challenges have plagued the hospice industry, with inaccuracies or inconsistencies in patients’ documents often red flags that bring surveyors or auditors to a hospice’s doorstep. Accurate documentation is essential to both avoid potential audits and respond to them.

“What you’re trying to guard against is that it looks like you’re withholding information through not being responsive [to audits]. The other bad thing you could do is modify your records in some way that it looks like you’re falsifying documentation,” said Meg Pekarske, hospice attorney for Husch Blackwell. “The first thing is making sure you’re providing responsive documents.”

According to Pekarske, hospices can include a cover letter that can serve as a hospice’s “foundation” for “making a judgment call” and proof that they are cooperating with investigation.s. Transparency and clarity are key when it comes to cooperating with auditors.

“The challenge with Medicaid audits for hospice, historically, is they’ve been very focused on long lengths of stay. they’re usually pulling the entire period of time,” Pekarske said. “And so the dollars really add up fast — and they do really add up and can be millions of dollars. If they’re pulling your tail, and it’s your total tail, it can really be significant.”

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