OIG Launches Audit of Inappropriate General Inpatient Hospice Billing

The U.S. Department of Health & Human Services (HHS) Office of the Inspector General (OIG) recently announced plans to launch a new audit that will focus on general inpatient hospice services.

Longer general inpatient hospice stays and high-cost issues are reasons for the audit, dubbed the “Audit of Selected, High-Risk Medicare Hospice General Inpatient Services,” according to OIG. The regulatory watchdog’s nationwide audit will concentrate on Medicare claims for hospice enrollees transferred to general inpatient care (GIP) settings following an acute hospitalization.

Through the audit, OIG will determine whether hospice providers that billed for general inpatient care complied with Medicare requirements.


“For this audit, we will focus on claims for enrollees who were transferred to GIP care immediately after an inpatient hospital stay for a period during which the enrollee’s inpatient stay reached or exceeded the geometric mean length of stay for the assigned diagnosis-related group,” OIG indicated in a statement. “These hospice GIP claims are at high risk for inappropriate billing because GIP care may exceed an enrollee’s needs or may not be provided.”

The audit is among a host of others in the health care space that the agency rolled out this month in its Work Plan initiatives. OIG anticipates the audit’s results to roll out in the fiscal year 2025.

OIG will select Medicare claims for the review based on hospital inpatient stays that reached or exceeded the “geometric mean length of stay” for their assigned diagnosis-related group. 


Hospice patients become eligible for general inpatient care when their pain or symptoms cannot be managed in the home or other settings, or when they lack sufficient caregiver support in the home. This level of care is intended to be short-term, but can be costly due to high acuity patient needs.

General inpatient care is the second-highest Medicare hospice service in terms of daily reimbursement rates, OIG stated.

For FY 2022, base payment rates for GIP hospice services reached a daily rate of $1,068, according to a report from Medicare Payment Advisory Commission (MedPAC). Routine home care daily reimbursement rates reached $203 for up to 60 days of care, and $161 per day after that time period (61+ days).

Though routine home care accounts for roughly 98% of all hospice days of care and averages out to larger Medicare claims, services like GIP, continuous home care and respite can add up to be more intensive and expensive to provide, MedPAC indicated in the report.

The U.S. Centers for Medicare & Medicaid Services (CMS) set the hospice payment capitation rate at $32,486.92 in its FY 2023 rule, which represented a 3.8% increase from the prior year. This included a hospice wage index update of 63.5% for general inpatient care labor share.

In the past, OIG’s general inpatient hospice care evaluations and audits focused on the appropriateness of Medicare payments and paid close attention to longer inpatient stays of five days or more, according to Howard Young, partner at law firm Morgan Lewis.

Though the new OIG audit falls in line with this focus, it pushes other questions to the surface for hospice providers, he said.

“OIG and CMS have for many years questioned why GIP usage rates were so low among the general hospice population, so it is curious why OIG is focused on these particular hospice GIP claims at this time,” Young indicated in a recent legal note. “A safe assumption is that OIG is auditing these ‘high-risk’ GIP claims to determine if hospices are overutilizing that higher level of care for certain acute care inpatients.”

In addition to cost concerns, OIG stipulated that length of stay is an area of the audit’s focus. But balancing the mix of hospice stays has been a pain point for providers in recent years.

Many hospices have reported issues with their inpatient referral mix since the pandemic began in 2020. More patients shunned or delayed institutional care due to fears of COVID-19 or losing access to family members due to safety restrictions. This led hospices to see a rise of patients referred by physician offices compared to hospitals or other facilities.

This could mean that larger numbers of patients could fall into the category that OIG is examining in its audit.

Hospice providers may be seeing more disruption play out around general inpatient volumes in coming years under growing demand for these services, according to Young.

“As acute care hospitals and health plans increasingly look to post-acute care partners — including home health, hospice, hospital-at-home programs and long-term care facilities — to manage Medicare patient populations, the appropriate use of hospice GIP services for beneficiaries who have elected the hospice benefit is increasingly important,” he stated.

Last year, OIG indicated that ramped up auditing activity would be on the near horizon in the hospice industry. In 2022, the agency announced it would be rolling out a hospice eligibility audit that would include a focus on inpatient stays.

This followed an OIG report to Congress that previous audit findings and investigative work recovered nearly $4 billion in funds allegedly lost to Medicare, Medicaid and other HHS programs. This amount is a total from across the health care spectrum, including but not limited to hospice.
“Our goal in doing this work is to help [CMS] identify areas that may be high risk in terms of eligibility and need more oversight,” an OIG spokesperson previously stated. “Those hospice beneficiaries without an emergency room visit or inpatient hospital stay could be high risk from an eligibility perspective.”

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