A recent study issued by the evaluation and policy division of the U.S. DHHS Office of Inspector General (OIG) indicates that hospices can expect increased scrutiny regarding the services they provide to assisted living facility residents. The study, dated January 13, 2015, was based upon an evaluation of all Medicare hospice claims from 2007 through 2012. Key observations made by OIG included the following:

  • Hospices provided care significantly longer for individuals in the assisted living facility setting as compared with other settings such as private homes and skilled nursing facilities.
  • For-profit hospices received much higher Medicare reimbursement per beneficiary than did nonprofit hospices.
  • Residents of assisted living facilities often had medical diagnoses that required less complex care.
  • Hospices often furnished fewer than five hours of visits for routine home care patients in assisted living facilities.

The OIG study does not speak to the important reality that residents of assisted living facilities typically are healthier than residents of skilled nursing facilities, which would tend to support a higher median number of hospice days in the assisted living setting.

OIG recommends to CMS that, as part of its ongoing hospice payment reform efforts, it should reduce incentives for hospices to target assisted living facility residents with certain diagnoses and those likely to have extended periods of care. Of course, this follows a similar recommendation by MedPac. OIG’s study recommends that CMS “target certain hospices for review.” These include hospices with a high percentage of CMS payments for patients in assisted living facilities, and hospices with a high percentage of  patients receiving care over 180 days or patients with certain diagnoses. In the wake of this critical study, hospices, especially for-profit hospices, can expect increased scrutiny of the services they provide to assisted living facility residents.

Hospice providers whose patients include a high number of assisted living facility residents should expect to be subject to increased Medicare review. Hospices should consider taking preemptive defensive steps now, such as:

  • Evaluating their data on assisted living facility residents in order to identify any outliers or potentially unsupported distinctions from services provided in other settings; and
  • Conducting internal compliance reviews regarding the services provided to assisted living facility residents. 

This is especially true of for-profit hospices that fall in or near the category of high service to assisted living facility residents.