The crux of a lawsuit filed by hospice organizations against the U.S. Department of Health and Human Services (HHS) on Thursday is the criteria that the agency uses to select hospices for the new Special Focus Program (SFP).

A group of providers and state associations are plaintiffs in the suit, including Texas Association for Home Care & Hospice, Indiana Association for Home & Hospice Care, Association for Home & Hospice Care of North Carolina, South Carolina Home Care & Hospice Association and Houston Hospice. They have asked the U.S. District Court in the Southern District of Texas-Houston Division for a preliminary injunction that would halt the SFP, according to their complaint.

“CMS has willingly tolerated bias in its algorithm, such as skewing toward large providers that serve many beneficiaries per year, but failed to offer a reasoned explanation for doing so, given it prevents CMS from identifying the worst performing hospices for the Special Focus Program,” the organizations indicated in a complaint filed with the court.

Finalized in the 2024 home health payment rule, the program is designed to identify poor performing hospices, mandate quality improvement and in some cases impose additional penalties. However, stakeholders in the hospice space have contended that the agency’s methodology for selecting hospices for the program is deeply flawed.

Some other hospice industry organizations praised the lawsuit, including National Partnership for Healthcare and Hospice Innovation.

“NPHI fully supports the litigation filed today, which aims to direct CMS to comply with the spirit and intent of the statute and regulations,” NPHI said in a statement shared with Hospice News. “This includes ensuring that the hospice SFP measures focus solely on compliance with the Medicare Hospice Conditions of Participation.”

The plaintiffs in the HHS lawsuit have laid out these potential flaws in their complaint.

Foremost, they argue that the data U.S. Centers for Medicare & Medicaid Services (CMS) are inconsistent with what Congress required when it passed legislation requiring the SFP. The law stipulates that candidates for the SFP are those that HHS has “identified as having substantially failed to meet Medicare requirements.”

The plaintiffs contend that two of the criteria CMS is using — Hospice Care Index (HCI) and Consumer Assessment of Healthcare Providers and Services (CAHPS) scores — do not measure compliance with Medicare requirements and should therefore be beyond the scope of the SFP algorithm.

Thus, the plaintiffs contend, CMS should not have published a list of the first 50 providers selected for the SFP because, they allege, the participants were selected based on data that was “rife with errors,” according to the complaint.

Inclusion on this list can be extremely detrimental to hospice providers, the complaint indicated, damaging their ability to attract volunteers, philanthropic donors and new hires, as well as their reputations in the community and referral partner relationships. It also imposes additional compliance costs on those providers.

“With CMS doubling down on a dangerous course of action by proceeding with the Hospice SFP in its current state — and offering no due process or administrative recourse to address or mitigate its flaws — some hospice providers will suffer irreparable harm and have no choice but to seek justice through the courts on behalf of their patients and mission,” said Dr. Steve Landers, CEO of the National Alliance for Care at Home, in a statement. “CMS’ failure to heed the concerns repeatedly voiced by lawmakers, hospice leaders and other stakeholders has led to the creation and rushed rollout of a program that is disconnected from its original spirit and intent.”