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December 20, 2004 12:00 AM

Fiscal detours

Improper billing continues in hospice cases

Joseph Mantone
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    Hospitals still appear to be improperly billing Medicare for hospitalizations of hospice patients, six years after a report from HHS' inspector general's office exposed irregularities.

    Quality-improvement organizations in at least three states have examined or are looking into the problem, which involves hospitals billing the government for inpatient stays of Medicare hospice beneficiaries when they are supposed to be billing hospices.

    Health Care Excel, the quality-improvement organization that serves Kentucky and Indiana, examined hospital admissions of Medicare hospice beneficiaries from 2000 to 2001 in Kentucky and found that hospitals incorrectly coded patients' billing records 60% of the time. As a result the hospitals had to return $651,098 in payments.

    The problem stems from a lack of education about a billing code that hospitals use to indicate when a DRG payment should be made for the inpatient stay of a Medicare hospice beneficiary, said Judi Lund Person, vice president of the division of quality end-of-life care for the National Hospice and Palliative Care Organization. Hospitals can only bill Medicare if the reason for the admission is unrelated to the patient's terminal illness. If the hospitalization is related to the terminal illness, the hospice is responsible for paying the hospital.

    Person said it's likely that the billing problems could be occurring across the country. With a growing number of hospice patients, the issue could be a greater concern if hospitals are forced to pay back the government.

    Since 1998-when the inspector general's report said the improper payments for treatment of Medicare hospice beneficiaries totaled approximately $21.6 million-the number of hospice admissions has grown to about 950,000 from about 500,000, according to the hospice organization.

    Health Care Excel is replicating its Kentucky study in Indiana and expects to have results in January 2006. Carolina Medical Review, the quality-improvement organization in South Carolina, is conducting a similar study there.

    Studies by the inspector general and Health Care Excel found that in some cases hospitals were mistakenly billing Medicare, even if the reason for admission was related to the patient's terminal illness. Hospices reimburse at a lower rate than Medicare, at about $1 for every $1.50 that the CMS pays.

    Since the inspector general's report, there have been some signs that education efforts have been made to deal with the billing problem, said Mary Helderman, a hospital payment-monitoring program project manager for Health Care Excel.

    "The Kentucky study showed there were some improvements," she said. One improvement has been more communication between hospitals and hospices.

    In the past, hospitals would only ask the hospice provider if the reason for the admission was related to the terminal illness at the time of admission, Helderman added. Now during discharge, it's more likely for hospitals to explain what type of treatment the patient needed and again ask the hospice providers if they think the reason for hospitalization was related to the terminal illness.

    "Hospices would determine whether the hospitalization was related to the terminal illness and the hospital would never question the determination," Helderman said. Now the hospitals are saying, "Give us some rationale," she said.

    Helderman said she would like to see some national guidelines on whether conditions are related to certain terminal illnesses, but she added that every patient is different. Health Care Excel has had some positive feedback on a chart that it designed for hospital workers to use when determining whether an admission was for a symptom related to the terminal illness. The chart lists common symptoms of some terminal illnesses.

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