Hospice Industry Groups: CMS Must Reform Auditing Processes

Flaws exist in the U.S. Centers for Medicare & Medicaid Services’ (CMS) auditing processes, a coalition of industry organizations indicated in a letter to the agency.

The organizations pointed to “fundamental, long-standing” problems pertaining to the audit focus areas, overpayment recovery and adjudication processes, as well as auditor consistency and education.

The organizations included LeadingAge, the American Academy of Hospice and Palliative Medicine (AAHPM), the National Association for Home Care & Hospice (NAHC), the National Hospice and Palliative Care Organization (NHPCO) and the National Partnership for Healthcare and Hospice Innovation (NPHI).

“We urge CMS and its audit contractors to shift the focus of current audit and recovery practices from obtaining large initial ‘overpayment’ recoveries to halting billing practices and patterns that clearly reflect failure to comply with fundamental requirements of the program,” the organizations wrote in the letter. “In so doing, we expect CMS to reduce the disproportionate audit burden that has been placed on hospice organizations that have a history of providing high-quality care.”

In the letter, the industry groups expressed support for some of the actions CMS has taken to bolster program integrity and address certifications of apparently fraudulent providers. These included provision in CMS’ proposed home health rule for 2024.

The proposed rule, if finalized, would forbid any change in majority ownership during the 36 months after initial enrollment, including acquisitions, stock transactions or mergers. The groups also applauded the agency’s enhanced oversight of new hospice organizations in California, Arizona, Nevada and Texas.

However, the letter’s signatories contend that the current audit system places an undue burden on hospices that are performing ethically and could be allowing some bad actors to slip through the cracks.

“We urge CMS to continue its strong program integrity initiatives by rectifying long-standing issues with auditing focus and direction, including unclear and mixed messaging that leads to inconsistent auditing outcomes,” Katie Smith Sloan, president and CEO, LeadingAge, said in a statement. “Education and training must be bolstered so that contractors are equipped to undertake meaningful audits. We share the Administration’s goal of ensuring quality hospice care. To achieve that, the auditing system must be supported and improved.”

Among their concerns is the focus on general inpatient care and longer lengths of stay from CMS and its contractors. 

The industry groups also pointed to inconsistencies in the ways auditors review claims and cited reports from their hospice members that many auditors lack specific knowledge of hospice care and what it involves.

They also contend that the adjudication process places “significant financial and staffing burdens” on hospices, lacks opportunities for providers to identify or correct auditors’ errors and fails to incentivize timely completion of the audits by CMS contractors.

The groups made the following recommendations to CMS for improving the audit process:

• Re-focusing [CMS] audit contractors on patterns and practices characteristic of providers that aim to minimize or avoid therapeutic care and supportive services that are required under the hospice benefit and fully reimbursed through the per diem payment.
• Placing emphasis on the education of providers rather than recovery of payments and ensuring there are clear definitions and standards communicated effectively to hospice providers and are applied uniformly in the audit process.
• Requiring substantive education and training for all auditors that is consistent with the education given to providers to minimize inconsistencies.
• Modifying the audit, recovery, and appeals processes to reduce the need for lengthy adjudication and reduce the burden for typically compliant hospice providers. Included in this should be a procedure for centrally monitoring audits across all contractors to ensure a high bar for why a provider must go through multiple audits simultaneously. Additionally, there should be an opportunity for mediation with the MAC to explain the provider’s justification for the billing and correct auditor errors before denial or recovery of claims are initiated.
• Increasing transparency of CMS contractor activity, including the number and types of audits being conducted, audit recovery amounts, results of audits by specific audit contractors, including reversal rates, and top denial reasons.

“The intense scrutiny that entangles mostly high-performing hospices is inadvertently allowing problematic and often newer providers to fly under CMS’s program integrity radar, to the detriment of patients, their families, and the Medicare program as a whole,” the agencies wrote in the letter.