By Robert Holly | June 24, 2018
In March 2018, Health and Palliative Services of the Treasure
Coast and two of its businesses paid $2.5 million to settle a False
Claims Act (FCA) case related to hospice billing.
A month later, Horizons Hospice
agreed to pay more
than $1.2 million to resolve allegations that the company fraudulently
billed Medicare and Medicaid for services to patients who did not have a
life expectancy prognosis of six months of less.
Both settlements came more than a year after Chemed Corporation
(NYSE: CHE) and various wholly-owned subsidiaries—including Vitas
Hospice Services and Vitas Healthcare, the biggest for-profit hospice
chain in the country—
agreed to pay a whopping $75 million to resolve a government lawsuit with similar allegations.
As
utilization has increased
and companies have more widely shifted toward high-margin profit
models, claims of fraud, waste and abuse in the hospice industry have
become increasingly common. So much so that, in fact, the U.S.
Department of Health & Human Services (HHS) Office of Inspector
General (OIG) has made hospice investigation a substantial portion of
its
active work plan.
Since the end of 2016, OIG has
announced or revised plans for at least seven different hospice-related audits, evaluations and inspections, a Home Health Care News review found.
“The Medicare hospice program is an important benefit for
beneficiaries and their families at the end of life,” the watchdog
organization stated. “OIG and others have identified vulnerabilities in
payment, compliance and oversight, as well as quality-of-care concerns,
which can have significant consequences both for beneficiaries and for
the program.”
Patients and taxpayers are at the front lines of those affected by
the rise in fraud and improper billing, but scrupulous hospice providers
are also being hurt.
For the many businesses that are free of red flags, it’s becoming
more difficult to go up against competitors who aren’t exactly playing
by the rules, an executive from a West Coast family-owned home health
and hospice company with nearly 3,000 patients told HHCN.
“Some of the companies out there kind of just want to come in, see an
opportunity to maybe generate a little bit more capital for themselves,
and they’re really just rendering services that aren’t within the
benefits of hospice,” the
exec, who asked for anonymity to avoid backlash, said. “It gives the whole industry a black eye.”
The ‘cost of doing business’
The list of U.S. Department of Justice FCA cases against hospice
companies in recent years is long and rapidly growing. Other prominent
examples include Genesis HealthCare’s
$53.6 million settlement in 2017, Evercare Hospice and Palliative Care’s
$18 million settlement in 2016 and Guardian Hospice of Georgia’s
$3 million settlement in 2015.
The number of civil cases against hospice providers also appears to be steadily trending upward.
“Right now, as we speak, I’m working on about five hospice fraud
cases,” Mark Schlein, an attorney with Los Angeles-based law firm Baum,
Hedlund, Aristei & Goldman, told HHCN. “In the past—even just six or
seven years ago—that was only one case, at most, at a time. From my
perspective, my hospice and fraud practice has grown dramatically, which
reflects the problem in the health care fraud arena and is a small
example of what’s going on nationwide.”
Mike Bothwell, attorney and founder of Georgia-based Bothwell Law
Group, also has a hefty load of FCA cases targeting hospice providers,
he told HHCN. Sometimes, identifying a suspect hospice company seems as
easy as throwing a dart toward a map of providers, he said.
“I think that I have filed something along the order of 15 different
hospice fraud cases,” Bothwell, who represented whistleblowers in the
2015 Guardian Hospice case, said. “I think that I did my first hospice
case in the late 90s or early 2000s—they didn’t really used to come up
on my radar.”
The most widespread type of hospice-related fraud or improper billing
is providers wrongfully admitting patients who are ineligible for care,
according to the attorneys. Currently, to meet
Medicare eligibility requirements,
patients need to have their hospice doctor and primary care physician
certify that they have six months or fewer to live. Patients also need
to choose palliative care over curative care, except in certain
demonstration programs.
Closely related to improperly admitting patients is improperly
retaining patients when they are clearly not actively dying, though
hospice rules do require hospices to regularly assess patient
conditions.
“By improperly admitting and improperly retaining, the corrupt
hospice company increases its patient census, which, of course, means
more money to the hospice company,” Schlein said. “The more patients you
have on hospice, the more that the government pays you.”
Besides accepting and keeping ineligible patients, other common types
of hospice wrongdoing include the use of kickbacks to bolster referrals
and the tactic of unnecessarily or fraudulently categorizing patients
in more intensive care levels with higher reimbursement rates, such as
for general inpatient care, typically referred to as GIP.
Routine home care services during a patient’s first 60 days of being on hospice
were reimbursed
at a rate of $190.55 per day last year, according to the National
Hospice and Palliative Care Organization (NHPCO). GIP, meant for pain
control and symptom management that can’t be handled in other
non-facility settings, was reimbursed at $734.94 per day.
“Sometimes, you see GIP stays that are really extraordinary for
certain diagnoses,” the West Coast hospice executive said. “There are
certainly individuals who play that game.”
Fraud is inherently deceptive, meaning the total cost of all hospice
fraud is almost impossible to calculate and largely unknown at this
point.
What is known: Just the act of fraudulently placing patients in
higher care categories costs Medicare hundreds of millions of dollars
each year. Hospice providers billed about one-third of all GIP stays
inappropriately in 2012, costing Medicare $268 million, the most recent
OIG report on the issue found.
Overall, the Department of Justice
opened 967 new criminal and 948 new civil health care fraud investigations during its 2017 fiscal year, according to a joint annual report with HHS.
“It’s fair to say that most companies engaging in fraud or cheating
the government recognize that getting caught and paying a fine has
become a cost of doing business,” Schlein said.
NHPCO response, OIG recommendations
As a demographic group, baby boomers have helped drive attention paid
to hospice, seeing value in being able to better control how, where and
when they die. The market has seen that value as well, reflected by a
string of recent hospice acquisition deals with
sky-high valuations.
Fraud and improper billing may exist in the industry, but it isn’t
“rampant,” Edo Banach—president and CEO of NHPCO, a not-for-profit
hospice and palliative care organization—told HHCN.
“The fact is there are bad players in hospice, as there are in home
care and nursing homes, certainly, and hospitals,” Banach said. “Rampant
implies it exists across the board, and my experience is [that’s] not
the case.
Any instance of improper billing is one instance too many, he said.
With that in mind, NHPCO works diligently with Congress, the Centers for
Medicare & Medicaid Services (CMS) and its members to make sure
hospice providers are providing appropriate care and unlikely to make
compliance mistakes.
“A lot of times when I see someone in the news being called out for …
defrauding of Medicare, I am both chagrined and somewhat relieved to
find out they are not a member of ours, to be honest,” Banach said.
“Folks who join associations and take part in educational sessions are
less likely to be out and flouting the rules. Where we do see some of
our members getting into trouble is because of a difference of opinion
about what is medically necessary and what’s not.”
OIG has made several recommendations to CMS to improve hospice oversight.
CMS should reform hospice payments to reduce the incentive for
hospices to target beneficiaries with certain diagnoses and those likely
to have long stays,
OIG recommended.
Medicare should also adopt a hospital transfer payment policy to lower
hospital reimbursement for beneficiaries who are discharged early to
hospice care and seek regulatory changes to establish more specific
requirements for the frequency of hospice certification, according to
the watchdog.
The FCA is often cited as the most effective means for holding
fraudulent providers accountable, Schlein said. Even so, penalties
recovered from FCA cases are often far less than the payments improperly
received by a hospice, he said.
Treasure Coast hospice, for instance, was accused of
defrauding Medicare by up to $72 million, but settled for only $2.5 million without admission of liability, TC Palm reported.
“[Whistleblowers play an incredibly important role in holding
providers and companies accountable for committing fraud against the
government,” Schlein said. “Still, when fraud is caught, in many cases,
they get back only pennies on the dollar.”
How rampant fraud actually is—and what the most effective ways of
combating it are—may be up for debate. Nonetheless, it’s safe to say
that hospice providers should plan ahead for increased oversight and new
policies in the coming months and years.
Full Article & Source:
OIG Puts the Pressure On as Hospice Fraud Cases Pile Up
