In yet another blow to the reputation of the home-care and hospice industry, HHS' inspector general's office in a new report said Medicare has overpaid 12 large hospice providers some $83 million for long-term patients who were not terminally ill.
The conclusion of the report, released last week, was based on a review of the medical files of 12 large hospices in Illinois, California, Florida and Texas. The review was conducted as part of the agency's ongoing Project Operation Restore Trust.
The findings are the latest in a long line of reports and government actions critical of the business practices of the burgeoning hospice and home-care industries (See story, p. 50).
The agency said it worked with physicians from Medicare peer review organizations to review the files of 2,109 long-term beneficiaries who had been in the care of the targeted hospices for more than 210 days, which is the reimbursable limit under Medicare.
The physicians determined that 65%, or 1,373, of the selected beneficiaries were ineligible for hospice care because at the time of initial diagnosis they were not terminally ill as defined by Medicare. Under Medicare rules, terminally ill means having a life expectancy of six months or less.
To date, the agency said it has recommended that HCFA recover about $17.2 million for ineligible payments made to five of the hospices. Recommendations for the remaining seven hospices are pending further review of their activities.
Based on an analysis of the HCFA database for hospice beneficiaries, the inspector general's office determined that as of February 1996, some 14%, or 11,000, of hospice beneficiaries nationwide had been in care for more than 210 days.
The agency blamed lax enforcement of the six-month prognosis requirement, complex regulations and weak internal controls for the problems.
The inspector general's office singled out one unnamed nationwide hospice chain for using marketing materials that downplayed the six-month requirement. The agency said the chain also had a large sales staff that was paid commissions based on the length of the patient's stay.
The inspector general's office specifically recommended that HCFA reinforce the six-month requirement, inform hospices that marketing materials should prominently feature Medicare eligibility requirements, make hospice physicians more accountable for their prognosis decisions, and strengthen claims processing controls.
On the legislative front, the inspector general's office recommended HCFA seek a stricter cap on the maximum amount of hospice payments, a restructuring of the benefit periods, and a change to the payment methodology for dually eligible nursing facility residents.