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Hospices that provided inpatient care in their own units recorded 50% longer patient stays and three times the proportion of Medicare revenue for those services than those that sent hospice clients outside for inpatient care, according to federal research.
Hospices that provided inpatient care in their own units recorded 50% longer patient stays and three times the proportion of Medicare revenue for those services than those that sent hospice clients outside for inpatient care, according to federal research.

Unusual billing patterns spur probe of inpatient hospice care


By Joe Carlson
Posted: May 6, 2013 - 4:00 pm ET
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HHS' inspector general's office is launching an in-depth investigation into cases where Medicare hospice beneficiaries get inpatient care, following unusual billing patterns that surfaced during recent research on the $1.1 billion industry.

Medicare hospice is designed to provide comfort to patients with six months to live, not life-saving treatments. However, in some cases, Medicare hospice patients do qualify for palliative inpatient care—and a new OIG study found that a high proportion of those lucrative services go to patients who stay in a certain type of provider, raising questions about the bills in those settings.

Specifically, an OIG data-mining project found that hospices that owned or leased their own inpatient units provided that care to 35% of their Medicare patients. In contrast, hospices that had to send their inpatients to other companies' hospitals or skilled-nursing facilities did so for only 12% of their Medicare beneficiaries, according to the results of the data-based report released Monday (PDF).

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The hospices that provided inpatient care in their own units recorded 50% longer patient stays and three times the proportion of Medicare revenue for those services than those that sent hospice clients outside for inpatient care. Medicare paid providers a daily rate of $652 a patient for inpatient hospice care in 2011.

“These results raise several questions about GIP,” Monday's OIG report says, using the abbreviation GIP for general inpatient care. “Long lengths of stay and the use of GIP in inpatient units need further review to ensure that hospices are using GIP as intended and providing the appropriate level of care.”

The follow-up study, which will use actual patient medical records to look for reimbursement irregularities, is ongoing.

Andrew Wachler, managing partner of Royal Oak, Mich.-based Wachler & Associates, said he has represented hospice companies that have been questioned about GIP utilization rates, and he found that the medical records in those cases did justify the billing practices at issue.

“I think generally, the OIG has found that when individuals or entities have ownership interest, that they tend to see a higher utilization. That has been their position,” Wachler said. “That doesn't mean that those that own their own inpatient hospital systems are over-utilizing. They may be utilizing quite appropriately and are sensitive to the needs of their patients.”

The report also urged the CMS to examine why more than a quarter of all hospices provided no inpatient care at all.

The report comes less than a week after the Justice Department filed a False Claims Act lawsuit against for-profit hospital giant Vitas Healthcare Corp. for alleged overuse in another category of lucrative hospice care known as “crisis care” or “continuous home care,” which had a daily rate of $856 in 2011.

The lawsuit accuses the company of billing Medicare for continuous home care that was either not needed or never provided, after Vitas executives set internal goals for the number of continuous home-care visits per year.

“For example, the complaint contends that Vitas billed three straight days of crisis care for a patient, even though the patient's medical records do not indicate that the patient required crisis care and, indeed, reflect that the patient was playing bingo part of the time,” the Justice Department news release said.

Chemed, the publicly traded company that owns Vitas, said in a written statement that the firm intends to vigorously fight the government's allegations.

“Chemed and Vitas have made significant investments in controls, systems and procedures to uphold the highest industry standards and to maintain compliance with all regulatory requirements. Our compliance efforts are designed to ensure our services are provided only to eligible patients.”

Healthcare compliance attorneys said Monday's report and last week's lawsuit against Vitas underscored the degree of attention that government investigators are focusing on hospice, which is expected to grow rapidly in coming years along with the aging of the baby boomer population. In 2011, Medicare paid $13.7 billion for hospice services, including crisis care and general inpatient care, as well as the routine care that paid $146 a day.

That year, Medicare paid 3,585 hospices, nearly 60% of which were for-profit companies.

“The lesson for providers is to proactively address compliance issues when they arise, whether those issues are in the form of questionable marketing practices or data that might suggest the provider is an outlier,” said Matt Curley, a partner at Bass, Berry & Sims. “Proactively addressing those issues is the best way to head off a government enforcement action or a whistleblower lawsuit.”

Follow Joe Carlson on Twitter: @MHJCarlson


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