OIG Estimates $42 Million in Improper Medicare Payments for Advance Care Planning

A significant number of health care providers may not understand federal rules for billing advance care planning, contributing to an estimated $42.3 million in improper payments in 2019.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently reported the results of its audit of advance care planning (ACP) billing practices among Medicare-certified physicians and other health care providers.

OIG found that — out of a sample of 691 ACP claims from 2019 — close to 70% (466) did not comply with requirements. Among that sample, improper payments totals $33,332. Based on these and other data, OIG estimated a national total of $42 million in improper billing from providers in office settings.


Office settings accounted for 61% of all ACP billing between 2016 and 2019, according to OIG.

This means some hospice and other providers may face audits or other forms of scrutiny that could ultimately require them to return payments they received for ACP services. OIG has already recommended that the U.S. Centers for Medicare & Medicaid Services (CMS) recoup the $33,332 identified from their research sample.

The compliance issues are rooted in billing language that lacks clarity, according to Marian Grant, senior regulatory advisor at the Coalition to Transform Advanced Care (C-TAC).


“When these billing codes were created, CMS made them very vague and open-ended, leaving room for flexible timing, frequency and settings around these conversations,” Grant told Hospice News. “But a little more direction would be helpful to avoid inadvertent billing mistakes. What we heard from many providers was that CMS was not clear about the requirements and what [providers] needed to document to support these billing claims. That needs to be fixed so that goals of care can be addressed.”

OIG made a similar assessment in its report, which stated that, “These payments occurred because the providers did not understand the federal requirements for billing ACP services.”

CMS in 2016 began to reimburse physicians and other qualified Medicare health care professionals for face-to-face advance care planning discussions with patients and families. This opened the door for greater advance care planning utilization.

Data from some studies indicate that higher completion rates for advance care plans result in more hospice enrollment, though societal factors and poor coordination among health care providers can limit its effectiveness and utilization.

Between 2016 to 2019, Medicare payouts for ACP totaled more than $340 million, OIG reported.

OIG recommended that CMS improve education for providers on documentation and time requirements for ACP billing. The inspector general’s office also called on CMS to instruct Medicare Administrative Contractors (MACs) to notify providers that they should “exercise reasonable diligence” to identify, report and return any overpayments within 60 days.

OIG also recommended that CMS should establish rules for health care organizations that provide multiple ACP services for a single beneficiary, including requirements for supporting documentation.

CMS agreed with three of OIG’s recommendations, but balked at the fourth related to multiple ACP services.

Coordinated and targeted education from CMS and MACs to health care providers regarding what is expected for advance care billing documentation would go a long way towards improving compliance, Grant added.

“The ball is really in CMS’ court to clarify some of these things so that people can avoid making honest mistakes when they use the advance care planning codes,” Grant said. “It’s not necessarily that providers did anything wrong, as the OIG indicated. But now providers are nervous to even use the advance care planning codes for fear of paying hundreds or thousands back if they get it wrong. That’s an issue for patients and families that need this support to identify their goals and wishes.”

Another issue is that existing ACP codes are time-based, allowing 16 minutes for these conversations to take place, according to Grant. This limited time frame does not allow providers to address the nuances and difficulties around goals-of-care discussions with patients and families, she explained. It also presents difficult and “tricky” parameters for clinicians who “aren’t sitting at the bedside with stopwatch,” Grant said.

The lack of clarity on billing, coupled with the time limitations, can contribute to distress for families and result in expensive, high-acuity treatments that don’t necessarily align with the patient’s wishes, according to Dr. Kevin Haselhorst, a retired Arizona-based emergency medicine physician who is now an advanced illness management medical coach.

“Medicare needs to step up advance care planning messaging not only to providers, but also to beneficiaries,” Haselhorst told Hospice News. “Providers are putting their own spin on advance care planning, and some themselves misunderstand end-of-life care options and unintentionally insert their own bias, or they have limited bandwidth for these conversations. If Medicare did a better job at communicating and insisted that people have advance directives, then patients can receive the care they want and providers don’t have to play a guessing game.”

Momentum may be swinging towards change, as lawmakers also look for ways to break down some of those barriers.

For example, the Improving Access to Advance Care Planning Act would require CMS to improve education for providers about ACP and related billing codes. The bill also would have expanded the range of clinicians who can bill for those services to include social workers and qualified non-clinical staff.

Further, the bill, introduced by U.S. Sen. Susan Collins (R-Maine) and Mark Warner (D-Va.) last September, would have removed patients’ out-of-pocket costs and co-payments for ACP. Around the same time, Rep. Earl Blumenauer (D-Ore.) brought a comparable bill to the U.S. House of Representatives floor.

For now, those bills are effectively dead in the water following the midterm elections. Bills do not carry over from one Congress to the next, though their sponsors have the option to reintroduce legislation in the new session.

But their introduction demonstrates that some contingents of the federal government are interested in fostering greater access to advance care planning.

In backing it, Collins and Warner also pressed payers to widen the scope of staff who can bill for these services, citing limited billing parameters that hinder patient access.

“Unfortunately, most patients do not routinely make advance plans for their care in the event that they are diagnosed with a serious or life-threatening illness,” Collins said in a statement. “This can be a difficult topic for many families to address, but advance care planning has been shown to increase satisfaction and improve health outcomes because people with advance directives are more likely to get the care they want, in the setting they prefer, and avoid the care that they don’t want.”

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