Corrective actions by the U.S. Centers for Medicare & Medicaid Services (CMS) has reduced improper fee-for-service payments by $27.72 billion during the past seven years. The agency identified claims for hospital outpatient, skilled nursing facilities, home health, and hospice as major contributing factors to improper payments during Fiscal Year 2021 — more than 38% of the total estimate.
The most commonly occurring issue leading to improper hospice payments is, unsurprisingly, insufficient documentation to support certification or recertification. Submitting inadequate or incomplete required written documentation is a sure-fire way to bring surveyors or auditors to a hospice’s doorstep. As regulators increasingly fix their eyes on the hospice space, providers need to ensure their documentation is airtight.
“CMS is undertaking a concerted effort to address the root causes of improper payments in our programs,” said CMS Administrator Chiquita Brooks-LaSure. “We intend to build on this success and take the lessons we’ve learned to ensure a high-level of integrity across all of our programs.”
CMS defines “improper payments” as overpayments or underpayments, or reimbursement where insufficient information was provided to determine the validity of the claim. Most improper payments involve situations where a state or provider missed an administrative step, according to CMS. While fraud and abuse may lead to improper payments,CMS indicated that the vast majority of improper payments do not constitute fraud.
Improper payments of hospice claims rose to 7.77% during Fiscal Year 2020, up from 6.69% in 2020. CMS indicated that this change was not statistically significant.
CMS often treats issues such as longer lengths of stay, live discharges and repeated recertification of a patient for hospice as red flags that could trigger an audit. Documentation – such as certification and recertification statements, hospice election statements and others – is a key component of each of these processes.
In addition to being correct and comprehensive per the requirements, hospices must also complete the documentation within the required time frames. Documentation must accurately reflect the patient’s conditions, abilities and environment, including what caused the placement in general inpatient care. Ensuring that all required signatures are accounted for is also essential to compliance.
One of the most commonly applied means of corrective action in the hospice space is the Targeted Probe and Educate audit (TPE). CMS suspended these activities temporarily during the COVID-19 pandemic, but resumed these actions in September.
The TPE program is designed to identify providers that have frequent errors on their Medicare claims or billing practices that CMS considers to be unusual. TPEs, typically conducted by Medicare Administrative Contractors (MACs), also focus on services that have high national error rates and represent a financial risk to Medicare, according to CMS.
The TPE process consists of as many as three reviews of 20-40 claims per round, with one-on-one education provided at the end of each round.
Other enforcement mechanisms include Supplemental Medical Review Contractor (SMRC) reviews. These contractors conduct nationwide medical reviews of Medicaid; Medicare Part A/B; and durable medical equipment, prosthetics, orthotics and supplies claims to determine whether claims follow coverage, coding, payment, and billing requirements.
The focus of the medical reviews may include vulnerabilities identified by CMS data analysis, the Comprehensive Error Rate Testing (CERT) program, professional organizations, and other oversight agencies, such as the U.S. Department of Health & Human Services Office of the Inspector General.
During 2020 and 2021, examinations of appropriate utilization of hospice general inpatient care claims were a priority for CMS regulatory reviews. In these instances, again, insufficient documentation was a significant issue.
The agency also identifies inappropriate hospice payments through Recovery Audit Contractor (RAC) reviews, designed to detect and correct past improper payments so that CMS and its contractors can implement actions to prevent future occurrences.
The overall 2021 Medicare FFS estimated improper payment rate (claims processed July 1, 2020 to June 30, 2021) was 6.26% — a record low. This is the fifth consecutive year the Medicare FFS improper payment rate has been below the 10% threshold for compliance established in the Payment Integrity Information Act of 2019.
“CMS is committed to reducing and preventing improper payments,” said Jonathan Blum, CMS Principal Deputy Administrator & Chief Operating Officer. “It is important to understand that only a small fraction of improper payments represent a payment that should not have been made – and an even smaller percentage represent actual cases of fraud.”
