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Articles Posted in Hospice

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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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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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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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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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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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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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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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In its November 3, 2010 release of the final 2011 Home Health Prospective Payment System (“2011 HHPPS”), the Centers for Medicare and Medicaid Services (“CMS”) updated its hospice recertification requirement. Beginning January 1, 2011, the Affordable Care Act requires that physicians and non-physician practitioners attest to a beneficiary’s recertification for hospice eligibility through a documented face-to-face encounter. This documentation is required to be signed and dated and is separate and distinct from recertification.

Many hospices and providers were concerned about the burden this new requirement would place on hospices. CMS responded, in part, by providing that “[t]he burden for completing the attestation form is estimated at 30 seconds for each recertification at 180 days or beyond.”

Whereas the requirement for 2010 merely required that “the recertifying physician include a brief narrative explanation of the clinical findings…support[ing] continued hospice eligibility,” the 2011 requirements expand this “to require this narrative to describe why the clinical findings of the face-to-face encounter, occurring at the 180-day recertification and all subsequent recertifications, continue to support hospice eligibility.”

This final rule will be posted in the Federal Register on November 17.
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The OIG will review hospice services in connection with nursing facilities. According to the Work Plan, “in a recent report, OIG found that 82 percent of hospice claims for beneficiaries in nursing facilities did not meet Medicare coverage requirements.” As a result, the OIG will look closely to nursing facilities that utilize hospice care. Furthermore, the OIG will examine the business relationships between hospices and nursing facilities “and assess the marketing practices and materials of hospices associated with high utilization patterns.” Additionally, the OIG will look at the services provided by both hospices and nursing facilities to hospice beneficiaries residing in nursing facilities to determine the extent to which the two entities coordinate care, service, and payment arrangements.
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On October 4, 2010, the OIG released its Work Plan for the FY of 2011. 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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