Recently in Hospice Category

October 5, 2012

OIG Work Plan 2013

On October 3, 2012, the OIG released its Work Plan for the FY of 2013. Throughout the week, we will be posting on various aspects of the Work Plan pertinent to our clients and our readers in the following areas:

• Hospitals
• Home Health Agencies
• Hospices
• Evaluation and Management Services
• Imaging Services
• Diagnostic Testing
• Sleep Testing
• Medical Equipment and Supplies
• Medicare Audits and the Appeals Processes

Check back every day for updates!

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June 18, 2012

Changes to the Hospice Aggregate Cap Calculation Method

Recently, CMS released a related change request (CR) 7838, which informs Medicare contractors about a new addition to the "Medicare Benefit Policy Manual," Chapter 9, Section 90, which is titled, "Caps and Limitations on Hospice Payment."

A summary of the key provisions of the new Chapter 9, Section 90 of the "Medicare Benefit Policy Manual," can be found by clicking here. The implementation date to enforce these provisions is set for July 2, 2012.


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January 4, 2012

AseraCare Hospice Sued by U.S. Over Alleged False Claims Act Violations

Hospice provider AseraCare is accused of submitting "false and fraudulent" Medicare claims for payment to the U.S. It has been alleged that the hospice has been claiming charges to the Federal Government for those patients who were not admitted to hospice. Hospice care is provided to Medicare recipients who have a prognosis of six months or less to live and need hospice care.

The complaint stems from a whistleblower lawsuit filed by two former employees in 2009; originally filed by Dawn Richardson and Marsha Brown, named United States ex rel. Richardson and Brown v. Golden Gate National Senior Care LLC dba Golden Living et al., No. 2:09-cv-00627 (N.D. Ala.).

The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and to share in any recovery. The U.S. is seeking three times the damages and a penalty of $5,500 to $11,000 per claim.

According to the lawsuit, Aseracare, owned by Golden Living, (one of the largest nursing home chains in the U.S.) is based in Fort Smith, Arkansas and runs 65 hospice centers in 19 states, including Alabama, Georgia, and Wisconsin. The federal complaint is part of an effort by the Justice Department of Justice (DOJ) and the Office of the Inspector General (OIG) at the U.S. Department of Health, to crackdown on suspected hospice fraud in the Medicare program.

This case is U.S. v. Golden Gate Ancillary LLC, 09-00627, U.S. District Court, Northern District Court of Alabama (Birmingham).


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October 18, 2011

Hospice Provider Charged with Defrauding Medicare for More Than $14 Million


In an indictment unsealed on October 12, Matthew Kolodesh (a/k/a "Matvei Kolodech") was charged with a laundry list of crimes, including 1 count of conspiracy to commit healthcare fraud, 21 counts of healthcare fraud, 2 counts of mail fraud and 11 counts of money laundering of monetary instruments over $10,000. Kolodesh set up, controlled and operated Home Care Hospice, Inc. wherein he allegedly "authorized the submission of claims to Medicare totaling approximately $14.3 million, which claims defendant Kolodesh and A.P. knew were false and fraudulent." "A.P." is the name given in the indictment to Kolodesh's business partner.

The government alleges, in part, that in committing healthcare fraud Kolodesh paid for referrals, paid for certifications of hospice eligibility, authorized fabrication of patient records and supporting documentation, created phony schedules of continuous care visits to patients who were not qualified for continuous care or were never provided continuous care, falsified records submitted in connection with a Medicare audit and siphoned funds from Home Care Hospice that were "fraudulently obtained Medicare payments" to unjustly enrich himself and his family.

According to the Department of Justice press release, "if convicted of all charges, Kolodesh faces a statutory maximum sentence of 370 years in prison. The government will also seek restitution to Medicare in the amount of $14.3 million and proceeds from the money laundering."

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October 14, 2011

Hospice Face-to-Face Encounter Requirements Clarified

By way of Transmittal No. 2316 issued on October 7, 2011, CMS clarified the claims processing procedures for hospice services when a required face-to-face encounter does not timely occur. This clarification creates additional administrative burdens to hospice providers when the required face-to-face encounter does not timely occur. Note that the implementation date of the clarified procedures is January 9, 2012.

Pursuant to 42 C.F.R. § 418.20, to be eligible for the Medicare hospice benefit, a beneficiary must have Medicare Part A and must be certified as terminally ill. A Medicare hospice certification is comprised of numerous elements, including a physician's prognosis, a physician's narrative, and clinical information or other documentation supporting the diagnosis. Additionally, as of January 1, 2011, a hospice physician or nurse practitioner must have a face-to-face encounter with each patient prior to the start of the 180th-day recertification and each subsequent recertification in order to determine the beneficiary's continued eligibility for the hospice benefit. The face-to-face encounter must occur prior to, but no more than 30 calendar days prior to, the third benefit period recertification.

Pursuant to Transmittal No. 2316, "If the required face-to-face encounter is not timely, the hospice would be unable to recertify the patient as being terminally ill, and the patient would cease to be eligible for the Medicare hospice benefit. In such instances, the hospice must discharge the patient from the Medicare hospice benefit because he or she is not considered terminally ill for Medicare purposes... The hospice can re-admit the patient to the Medicare hospice benefit once the required encounter occurs, provided the patient continues to meet all of the eligibility requirements and the patient (or representative) files an election statement in accordance with CMS regulations."

Note that this position is a departure from CMS' previous stance on the procedural requirements for processing hospice claims when hospice certification requirements are not satisfied and increases the administrative burden to hospices. Pursuant to the Medicare Benefit Policy Manual (CMS Pub. 100-02), Chapter 9, Section 20.1, if a certification of the beneficiary's prognosis of six months or less is not obtained within the timeframes established by the regulations, "no payment is made for the days prior to the certification. Instead, payment begins with the day of certification." CMS policy does not require that a patient be discharged and re-admitted in this instance; rather, CMS policy simply requires that the dates of service prior to the certification not be billed.

Also of note, Transmittal No. 2316 further states, "Where the only reason the patient ceases to be eligible for the Medicare hospice benefit is the hospice's failure to meet the face-to-face requirement, we would expect the hospice to continue to care for the patient at its own expense until the required encounter occurs."

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August 4, 2011

OIG Report Addresses Concerns Regarding Hospice Care Provided to Nursing Facility Residents

Medicare beneficiaries with a terminal illness may choose to receive palliative care instead of curative treatment under the Medicare hospice benefit. In recent years, the Office of Inspector General ("OIG") has raised some concerns about the Medicare hospice care received by nursing facility residents. As a result, a number of OIG reports are anticipated to address these concerns.

The first report of the series, released in July 2010, describes the growth of hospice care from 2005 to 2009. Specifically, the report focuses on hospices which assisted a large portion of nursing facility residents in 2009.

The primary findings of the report state that:

• From 2005 to 2009, Medicare payments for hospice care provided to nursing facility residents have grown from $2.55 billion to $4.31 billion, a 69 percent increase.
• In 2009, 263 hospices (almost 8 percent of all hospices) had more than two-thirds of their beneficiaries in nursing facilities. Seventy-two percent of these hospices, referred to as high-percentage hospices, were for-profit. These high-percentage hospices "received more Medicare payments per beneficiary and served beneficiaries who spent more time in care." Further, these "hospices typically enrolled beneficiaries whose diagnoses required less complex care and who already lived in nursing facilities."

As a result of its findings, the OIG recommended that CMS "[m]onitor hospices that depend heavily on nursing facility residents" and "modify the payment system for hospice care in nursing facilities." CMS concurred with the two OIG recommendations. The OIG recommendations result from a belief that some hospices may seek out Medicare beneficiaries with particular characteristics because certain conditions require longer but less complex care and could result in higher profits for those hospices.

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August 3, 2011

Hospice Final Rule Issued

The Centers for Medicare & Medicaid Services ("CMS") recently released the final regulation regarding the hospice wage index for the fiscal year ("FY") 2012 ("Final Rule"). As a result of the Final Rule, a 2.5 percent increase in Medicare payments to hospices serving Medicare patients will be implemented for FY 2012.

In addition, the Final Rule includes key changes to the way CMS counts hospice patients beginning with the 2012 cap accounting year. The change comes in the wake of recent lawsuits successfully challenging the hospice cap calculation methodologies and the CMS-1355-R Ruling. The Final Rule allows for retroactive calculations under the new methodology in some circumstances and permits hospice providers to elect to continue using the current counting method.

The Final Rule also includes revisions to the hospice face-to-face requirement. Under the regulation, the hospice physician who performs the face-to-face encounter would not necessarily be the same physician who certifies the patient's terminal illness.

Lastly, the Final Rule implements a hospice quality reporting program. The program stems from Section 3004 of the Affordable Care Act. Hospices will be required to begin quality data collection in October 2012 and will need to submit the data in 2013. Hospices have the option of earlier voluntary data collection (beginning in October 2011) and submission (2012), but hospices which fail to report quality data in 2013 will be penalized.

The entire text of the Final Rule may be viewed here.

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June 1, 2011

HHS Hospice Cap Regulation Held Invalid by New Mexico District Court

In Zia Hospice v. Sebelius, CV 09-0055 CG/LFG and CV 09-1108 CG/ACT, the New Mexico District Court followed the trend set by numerous other courts, including the 5th and 9th Circuit Courts, in relation to the hospice cap regulation, 42 C.F.R. §418.309(b)(1). The Court held 42 C.F.R. §418.309(b)(1) invalid because the regulation does not comply with the relevant federal statute, 42 U.S.C. §1395f(i)(2).

According to the Court, the statute requires the Department of Health and Human Services ("HHS") to "count hospice care beneficiaries proportionally over the number of years in which they received such care." The regulation, on the other hand, allows HHS to only count "hospice care recipients in the year in which they received the bulk of their hospice care." Based on the plain language of the statute, the Court determined that since Congress has spoken to the exact matter of the hospice cap calculation, no deference was due to the regulation. The Court rejected the Defendant's argument that the statute is ambiguous.

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May 9, 2011

Hospice Wage Index to Rise in FY 2012 under CMS' Proposed Rule

The Centers for Medicare & Medicaid Services ("CMS") recently proposed a rule regarding the hospice wage index for the fiscal year ("FY") 2012 ("Proposed Rule"). The rule would result in a 2.3 percent increase in Medicare payments to hospices for FY 2012 and implement a new quality reporting system as required by the Affordable Care Act.

In addition, the Proposed Rule includes key changes for the hospice cap calculations (based upon the recent lawsuits successfully challenging the hospice cap calculation methodologies) and revisions to the hospice face-to-face encounter requirements.

Under federal law, CMS must impose limits on the aggregate Medicare payments received yearly by hospice organizations. Beginning with the 2012 cap year, the Proposed Rule would modify how the cap is calculated by changing the way hospice patients are counted. The law would also allow for retroactive calculations under the new methodology in some circumstances. Hospice providers would be permitted to elect to continue using the current counting method under the Proposed Rule. See also Ruling CMS-1355-R, mirroring provisions of the Proposed Rule.

Lastly, the Proposed Rule includes revisions to the hospice face-to-face requirement. Under the Proposed Rule, the hospice physician who performs the face-to-face encounter would not necessarily be the same physician who certifies the patient's terminal illness.

The Proposed Rule may be viewed here. Comments on the rule will be accepted by CMS until June 27, 2011.

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April 4, 2011

Face-to-Face Encounter Requirement for Hospice and Home Health Providers Effective NOW

Effective April 1, 2011, hospice and home health providers will be required to comply with the face-to-face rule for purposes of verification of a patient's eligibility for Medicare home health services and of recertification for Medicare hospice services. Enforcement of this requirement was delayed from January 1, 2011, in order to allow home health and hospice providers time to work out any systemic issues associated with implementation of the face-to-face visit requirement. According to CMS, "the face-to-face requirement ensures that the orders and certification for home health services are based on a physician's current knowledge of the patient's clinical condition." These encounters must then be documented on patients' certifications. Moreover, where the home health encounter must occur within the 90 days prior to the stat of care or within the 30 days after the start of care, the hospice encounter must occur prior to the patient's 180th day recertification, and each subsequent recertification. The hospice encounter must occur no more than 30 calendar days prior to the start of the hospice patient's third benefit period.

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March 21, 2011

5th and 9th Circuits Rule the HHS Hospice Cap Invalid

Following a December challenge in the Northern District of Texas, the ninth circuit (Los Angeles Haven Hospice, Inc. v. Sebelius, No. 09-56391 (9th Cir. Mar. 15, 2011)) and the fifth circuit (Lion Health Servs. V. Sebelius, No. 10-10414 (5th Cir. Mar. 11, 2011)) have both ruled that the hospice cap regulation (42 CFR 418.309(b)) is unlawful and must be set aside as it conflicts with the unambiguous statute requiring a proportional versus a single-year allocation method for the hospice cap. 42 USC 1395(i)(2) requires the amount of payment made for hospice care provided by (or under arrangements made by) a hospice program for an accounting year may not exceed the "cap amount" for the year multiplied by the number of Medicare beneficiaries in the hospice program in that year. The "number of Medicare beneficiaries" is defined as the number of individuals who have made an election with respect to the hospice program and have been provided hospice care by (or under arrangements made by) the hospice program in the accounting year, such number reduced to reflect the proportion of hospice care that each such individual was provided in a previous or subsequent accounting year or under a plan of care established by another hospice program. The corresponding regulation, 42 CFR 418.309(b), provides that the hospice cap amount is calculated by multiplying the adjusted cap amount by the number of Medicare beneficiaries who elected to receive hospice care from that hospice during the cap period. According to the 9th Circuit appeals court, "The regulation is at odds with the plain language of the statute in that it omits the individualized proportional allocation calculation expressly called for in the statute, and substitutes an 'alternative' that HHS considers more convenient and less burdensome."

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March 19, 2011

Advocacy Groups Pushing to Delay Face-to-Face Rule

Section 6407 of the Patient Protection and Affordable Care Act requires a face-to-face encounter for home health and hospice patients to qualify for Medicare coverage. On March 12, 13 prominent medical societies and advocacy groups sent a letter to the Centers for Medicare and Medicaid Services (CMS) requesting a postponement until, at least, July 1 due to industry and physician confusion in implementing the requirement. In the letter, the societies and advocacy groups request administrative simplification stating, "[w]hile section 6407 of PPACA requires that the physician document that the encounter took place, the CMS rule and interpretive guidance requires much more, including a narrative as to why the patient clinical findings specifically support Medicare coverage. As has been reported in our meetings with CMS, many physicians see this added documentation component as unnecessary, duplicative, and unduly burdensome." The letter closes with recommendations for reducing the paperwork burden on physicians in addition to increasing patients' access to the physician encounter.

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February 2, 2011

Report Compares For-Profit Hospice with Not-For Profit Hospice Patient Populations

A report published in the February 2, 2011 edition of the Journal of the American Medical Association, compared the patient diagnoses, length of stay, and location of service for hospice patients receiving care from for-profit and not-for-profit hospices.

The researchers found that for-profit hospices had a higher percentage of patients with non-cancer primary diagnoses, and specifically found that for-profit hospices had a higher percentage of patients with dementia. The researchers also found that the median length of stay for patients receiving care from for-profit hospices was slightly longer than the median length of stay for patients receiving care from not-for profit hospices (i.e., 16 days versus 20 days). However, it should be noted that the median length of stay for both for-profit and not-for-profit hospices was well below 180 days. The researchers did not find significant differences in the location of service for hospice patients receiving care from for profit and not-for-profit hospices.

Based upon the above findings, the researchers concluded that the Medicare "per diem payment structure may create financial incentives to select patients who require less resource-intensive care and have longer hospice stays."

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December 20, 2010

Medicare Hospice Cap Challenged by Texas Lawsuit

Last week, a lawsuit was filed in the Northern District of Texas federal court, challenging the validity of the aggregate annual cap for hospice reimbursement.

Medicare provides reimbursement for hospice services rendered on a per beneficiary, per diem basis, subject to an aggregate annual cap. This cap is based upon the product of a per-beneficiary amount and the number of Medicare beneficiaries in a hospice program during a given accounting year. Any provider whose Medicare revenues exceed the cap are subject to demands for repayment of the difference from Medicare.

In the case of Dallas Nursing Home LLC d/b/a Golden Acres v. Kathleen Sebelius, Secretary of United States Department of Health and Human Services, Golden Acres Nursing Home asks the court to rule that "the hospice cap regulation is invalid." In its complaint, Golden Acres Nursing Home alleges that, in calculating the cap, Medicare has failed to follow the Congressional mandate to allocate the cap proportionally across years of care, which subjects hospice providers to improper repayment demands.

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December 7, 2010

Kansas Hospice Provider Accused of False Claims

On December 7, 2010, the U.S. District Court for the District of Kansas refused to dismiss False Claims Act (FCA) claims against a hospice provider.

The defendant, Hospice Care of Kansas, Inc. (HCK), which was purchased by defendant Voyager Hospicecare, Inc. in 2004, provides hospice care to Medicare beneficiaries. The suit contends that the defendants submitted Medicare claims for ineligible hospice patients and followed business practices that caused the "admission, retention, and submission of claims to Medicare for patients that were ineligible for the hospice benefit."

In arguing that the complaint fails to state a claim, the defendants argue that a medical opinion regarding whether a patient is terminally ill--meaning they have a life expectancy of less than six months--is a subjective medical opinion that cannot be false. But the court noted that "facts that rely upon clinical medical judgments are not automatically excluded from liability under the FCA."

In refusing to dismiss the complaint, the Court noted that the complaint identifies 27 hospice beneficiaries alleged not to be terminally ill, but for whom defendants submitted Medicare claims. The complaint also sets forth factual details underlying the patients' alleged false certifications, the claims submitted by defendants, and the reimbursements paid by Medicare.

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