Where Hospice Compliance Meets Revenue Cycle Management

As regulatory agencies crack down on hospice spending, providers can benefit from recognizing the links between revenue cycle management and compliance.

Regulatory activity is increasing on multiple fronts.

For example, the U.S. Department of Health & Human Services (HHS) Office of the Inspector General (OIG) has launched a nationwide audit of general inpatient hospice services (GIP), citing that roughly one-third of providers improperly bill for these services.

Meanwhile, the U.S. Centers for Medicare & Medicaid Services (CMS) has ramped up auditing activity tied to longer stays and more expensive levels of care such as GIP. Hospices have encountered a variety of audit types as CMS contractors conduct post-payment reviews designed to recoup Medicare funds that may have been overspent.

The increased focus on hospice billing and claims has added to the mix of financial pressures that impact providers, according to Zaundra Ellis, vice president of hospice professional services at the health care software provider Axxess.

“There’s a lot of external forces that really could shut down a hospice,” Ellis said during the National Association for Home Care & Hospice (NAHC) Financial Management Conference. “From a compliance perspective with the OIG and Medicare, there’s so much money involved and we’ve seen so much growth in hospice over the last decade. Key priorities as Medicare expenses in hospice go up are [providers’] billing practices and claims data.”

Medicare auditors and regulators are often looking for red flags in a hospices’ billing data — high spending and utilization, according to Ellis. This means that hospices need to have sound revenue management and billing systems in place that can withstand “heavy duty” claims data analysis from multiple angles, she added.

“If you get notified that you have an audit going on, that is nothing to be taken lightly,” Ellis said. “It can start with payment suspension, then denial of payments and then recoupment of payments of whatever they identify as overpayments. There is potential for someone to face federal charges for fraud.”

Regulators have focused on improper billing practices as signals of potential fraud and kickback schemes. Hospice providers can face significant financial and legal repercussions for committing health care fraud, facing millions in fines and criminal charges in some cases.

Even with solid billing practices, hospices can still find themselves facing financial challenges related to compliance, according to Candice Hardy, advisory consulting manager at McBee Associates.

“Really look at your compliance programs to make sure things are in place so that you can stay ready and you don’t have to get ready,” Hardy said. “Claim denials can happen even if you do everything right, you still can come across challenges. Your organization can take a loss because the cash is not there to pay staff or services.”

How a hospice handles its revenue cycle management processes can be a key to backing claims data that illustrates compliance, according to Hardy.

Tracking claims status, patient care costs and clinical and unrelated services is important to having compliant and data-driven systems in place, Hardy said. Ensuring that clinical documentation is complete and accurate is also essential.

Having a proactive billing and payment approach that tracks claims data is important to ensuring that a hospices’ services are reimbursed efficiently and meeting compliance standards, she added.

“You’ve got to be able to manage your cash flow and then you’re going to mitigate risk in a sense when you’re dealing with any overpayment issues or delays or questions in billing,” Hardy said. “[Hospice] revenue cycle [is] a whole challenge, and you have to consider your process in that tight turnaround around it.”