Hospices are subject to a rising number of investigations and audits from Medicare contractors, the U.S. Department of Health and Human Services Office of the Inspector General and, in some cases, the U.S. Justice Department, among others.

Hospices need to understand the various types of investigations they may encounter and how to respond to them. Key factors are completely and accurately documenting the medical necessity of the care they receive.

Hospice News sat down with Guillermo Beades and Todd Brower, partners with the law firm Frier Levitt to discuss the ins-and-outs of hospice investigations and how providers should respond.

What kind of investigations are you seeing in the hospice space right now?

Beades: As far as hospice is concerned, the enforcement actions typically fall into one of two categories for fraud, waste and abuse. One of them is providing worthless services. Whether that’s more the waste side, or the abuse of billing, that is when, for example, they’re giving somebody medically unnecessary wound care when they are on death’s door. And you start to wonder, what’s the medical reason for it? So that’s one area.

Another area is — whether it’s purposeful, whether it’s because of a lack of documentation — is people being put on hospice when they don’t qualify for it. There’s some boxes you have to check, for lack of a better word, to actually make you eligible for hospice. So we’ve seen some enforcement actions to the tune of millions of dollars and jail time for hospice owners and-or administrators higher up, for just misclassifying people as beneficiaries of hospice.

Who’s conducting these investigations? Is it Medicare Administrative Contractor (MAC) audits? Is it the Justice Department getting involved? What types of investigations are these?

Brower: I think it’s everyone. It’s coming from all angles. And I think that’s part of the frustration in this industry. You are hit from so many different angles, MACs and every other acronym you can think of. So it’s hard to balance it all and address it appropriately, because you’re just hit from every side.

There are situations where, especially in hospice, the medical necessity is just becoming a big focus, because, unfortunately, there are people in the industry — hospice providers and other types of providers and vendors — that identify those services that are compensated or reimbursed at really high levels, and they just target it. And what we tried to point out to the hospice and home health providers in these situations, is that this is all going to come back eventually.

I think we’re just at the beginning of things like wound care and some other areas where all of a sudden the focus is going to come. We have examples of this for wound care to a hospice patient the last two weeks of their life. That’s going to blow up. So from a compliance standpoint, we’re just trying to get the providers to realize they’ve got to be aware of this. And the medical necessity is so important in order to justify the services you’re providing.

How do they establish a medical necessity?

Brower: There’s all sorts of care plans that have to be developed for all of the patients, using clinical data. You have got to come up with a care plan in both hospice and home health care.

Using wound care as an example, again, the home care company or the hospice company has a care plan for their patient. The providers who are doing this aren’t going through the home care company or the home care provider. They’re getting to the patients directly. And so what’s happening is also on the home care provider, hospice provider, doesn’t even know this has happened until after the fact. That’s where the real risk is. They genuinely want to work with, for example, the wound care providers, so that you avoid this kind of situation.

Beades: When we talk about medical necessity, typically, that comes from a specific provider’s policies and procedures. They’ll say, we consider this procedure to be medically reasonable and necessary. If you provide, let’s say again wound care, four weeks of conservative treatment with no other reasonable treatment options, then at that point it’s considered okay.

Now you can basically escalate up to skin grafts. And then, the [U.S. Centers for Medicare & Medicaid Services (CMS)] has local coverage determinations, national coverage decisions, local articles, guidance and [National Correct Coding Initiative] edits.

What are some of the factors that could trigger one of these investigations?

Brower: There are five favorite sources of information: disgruntled patients, disgruntled employees, competitors, and then government audits and analytics. The FBI once told me that one of their favorite sources of information is ex-spouses, which is another reason to stay married. But you know, by and large, although the government will do random audits, the government does not necessarily have the resources or funding to just be doing huge amounts and widespread audits. They’re relying on the patients, disgruntled employees, competitors, the people that will turn you in.

What are some misconceptions or pitfalls that can impact a hospice’s response to an audit or an investigation?

Beades: Almost all of them make the same fatal mistake, which is treating it as if it was just a regular routine thing, like a routine audit request, a routine request for records, and then they don’t send all the records that should be sent. They treat it in a cavalier manner. They miss deadlines for productions.

Also, what hurts in hospice is poor documentation. The documentation is your shield, and the more holes you have in your records, and more holes you have in your shield, that shield is just Swiss cheese, and it doesn’t really help you.

Brower: Just to pick up on the whole documentation issue, because this is what we emphasize in our program as well, cloning of medical records has been an ongoing problem. Copying and pasting is a problem in medicine across the board. But in home health and hospice, it’s become a problem, and the government auditors can recognize when a record has basically been cloned or basically it’s not new information. So then it becomes an issue. Was it really medically necessary? Was someone actually doing an assessment when that entry is just repeated. And that’s an ongoing problem.

This is going to be the future issue — AI, because AI is going to take over home health and hospice, as it’s going to take over the medical profession for documentation purposes. They’re using it for their care plans, where they’re basically just putting in all the patient data, and then the care plan comes out of AI. AI does not replace human judgment and nor are AI systems that great yet. So there’s a lot of risk involved in that.

How should a hospice respond if they’re notified that they’re under investigation or expecting an audit?

Beades: You have to make sure that you have someone be the point person for responding if the letter comes from someone with the acronyms. Sometimes they’ll give you a letter and say, “We want to discuss an average billing pattern,” or “This is a target enforcement area.” You’ll get clues to the fact that this is not a routine audit. This is a request for multiple records that could lead to an extrapolated repayment command.

Lawyer up, because one of the things that we do, that other health care firms do, is when they get retained, they will take over the production phase. And that’s very important, because one lawyer is sending in everything that’s being produced.

Also, you don’t want anybody making any statements, because the investigators don’t look for statements. They look for admissions. So they’re already queued in trying to get me to say something wrong, hoping they’ll say something that they can misconstrue. This is someone taking notes. You don’t know what they’re writing down. Then they’re going to make a report based on those notes, toss the notes, and now this report has been just modified and misconstrued.

You want to make sure you’re sending everything you know. We also sometimes get an expert coder to review things to make sure that we’re not missing any additional documentation that should be provided. It’s like a whole team effort, the clinicians, expert coders and us in the legal side.

You want to make sure everything’s being produced. You have someone that you know it’s their job to respond to it in a timely fashion, because you can’t be late on some of these deadlines, particularly with CMS, they’re written in stone. You don’t get a second bite of the apple.