The media and regulators have heightened their focus on perceived hospice fraud and abuse. A Washington Post article describes how Medicare rules create a booming business in hospice care for people who are not dying, resulting in hospice firms draining money from Medicare. The article focuses on how the number of “hospice survivors” in the United States has risen, attributing the rise in part to hospice companies that earn more by recruiting patients who are not actually dying.

According to The Washington Post’s analysis of more than 1 million hospice patient records over 11 years in California, the proportion of patients who were discharged alive from hospice care rose 50 percent between 2002 and 2012. Longer stays are more profitable, the article states, because hospice companies generally spend more on patients when they begin care and again when the patients are at the end of their lives.

The federal government also is studying hospice length of stay, particularly in the nursing home and assisted living settings. According to a May 1, 2014, study titled “Medicare Hospice Payment Reform: A Review of the Literature (2013 Update),”performed by Abt Associates for the Centers for Medicare and Medicaid Services (CMS), hospice length of stay has increased 48 percent between 1998 and 2008. Although the average length of stay for chronic kidney disease and cancers remained relatively stable during this timeframe, the average length of stay increased significantly for most other diagnoses. The largest increase was for nonspecific diagnoses such as “debility, not otherwise specified,” “adult failure to thrive,” Alzheimer’s disease, and non-Alzheimer’s dementia.  According to Abt, some studies also have noted an increased length of stay for hospice patients who live in a nursing home.

The Office of Inspector General (OIG) at the Department of Health and Human Services (HHS) published a July 2011 report – “Medicare Hospices That Focus on Nursing Facility Residents”– on hospices that served a high percentage of nursing home residents. According to the OIG, these hospices served beneficiaries who spent more time in care and typically enrolled beneficiaries whose diagnoses required less complex care. The OIG stated that some hospices may be seeking out beneficiaries with particular characteristics, including those with conditions associated with longer but less complex care who are often found in nursing homes. Among the suggestions the OIG made was to increase monitoring of hospices that depend heavily on nursing facilities and to modify the payment system for hospice care in nursing facilities as the current payment structure provides incentives for hospices to seek out beneficiaries in nursing facilities who often receive longer but less complex care.

In its 2014 work plan, the OIG focused on hospice length of stay in assisted living facilities. The OIG noted that assisted living residents have the longest lengths of stay in hospice care and that the Medicare Payment Advisory Commission has said the long stays bear further monitoring and examination.

Recently signed legislation will soon create greater federal oversight for hospice programs. On October 6, 2014, President Obama signed into law the IMPACT Act of 2014 (Improving Medicare Post-Acute Care Transformation Act of 2014). The hospice provisions increase the frequency of state inspections, mandating surveys not less frequently than once every 36 months until September 30, 2025. In addition, the law focuses on hospice programs that appear to enroll patients who are not near death by requiring a medical review of hospice programs with a high percentage of patients who receive care for 180 days or more. The Secretary of Health and Human Services is required to set a threshold percentage or number of patients receiving care for more than 180 days that will trigger a review.

Hospice programs can begin preparing now for the increased oversight of hospice length of stay. Although CMS still needs to clarify the threshold percentage that will trigger a medical review and the methodology for the review, hospice programs can start to address, monitor, or audit the following areas.

  • Assess clinical documentation supporting hospice eligibility: Describe symptoms and diagnoses that support that the patient has a terminal condition and avoid vague terms or conclusory statements without documentation, such as “declining” or “needs hospice.”
  • Review policies and procedures to ensure that there are protocols in place so that appropriate assessments are performed and documented to demonstrate that a beneficiary is and remains eligible for the hospice benefit.
  • Conduct training on policies and procedures.
  • Create and use audit tools to evaluate that hospice eligibility requirements are met, policies and procedures are followed, and there is appropriate documentation.