HHS OIG Report Finds Significant Non-Compliance in Hospice Documentation

On September 15, 2016, the Department of Health & Human Services issued a report that found significant non-compliance in the two prerequisite processes necessary for a beneficiary to receive hospice care.  These inadequacies are often the manner and method by which companies commit hospice fraud.  The Department’s report found problems with and recommended improving the Election Statement, which is a form written by the hospice that a patient or caregiver signs to choose to enroll in hospice care and the Certification of Terminal Illness, which is the form that a physician must sign to certify that they are adequately involved in observing the patient and that the patient is eligible for hospice care.  Considering the massive growth in the hospice industry and continued focus on hospice fraud, correcting problems with these two “gatekeeper” certification forms is essential to limiting hospice fraud.  Effectively, these two documents serve as the “admission ticket” that hospice companies need to submit to Medicare in order to bill for hospice services, hence the significance of adequate documentation.

The report examined a sample of 563 Medicare hospice patients from 2012 and found that for 34.9 percent of those patients the hospice Election Statement lacked required information or had other vulnerabilities.  This is a significant problem considering the magnitude of a hospice election decision.  When a patient signs an election statement to enter hospice care they are electing to choose palliative treatment, which is focused on pain management and comfort.  By making this decision, they are also electing to forgo their right to have Medicare cover many curative treatments.  The election statement is supposed to clearly communicate this decision and provide the patient and their family with a full understanding of what hospice care is and what it is not. However, 12 percent of the sampled election statements did not even mention that the patient was waiving their right to other Medicare services or inaccurately stated what benefits were being waived.  Further, 9 percent of the statements did not state that hospice care is palliative rather than curative.

The report also found significant problems with hospice Certifications of Terminal Illness, the document that a physician must sign to certify that a patient is terminally ill with a life expectancy of six months or less, and thus eligible for the Medicare hospice benefit.  Certifications of Terminal Illness have several requirements to ensure physicians are involved in determining that the beneficiary is hospice eligible.  Yet, in 14 percent of the sample, the certifying physicians did not meet at least one of these requirements.  Raising serious questions about the physician’s involvement in the patient’s care, 10 percent of the sampled certifications did not include the required narrative of why the patient was hospice eligible.  Another 5 percent of the sample did not include the required physician attestation that the narrative was based on review of the patients’ medical records.

The HHS OIG report is illuminating to the fact that inadequate documentation is a significant problem in the hospice industry.  Throughout the nearly ten years that Frohsin Barger & Walthall have been leading hospice fraud specialists, we have seen that inadequate documentation is intrinsically tied to hospice fraud and is often the manner and means by which hospice fraud is perpetrated.  Specifically, we have repeatedly seen a lack of compliance and lack of physician involvement in Certifications of Terminal Illness as well as inadequate disclosure of the hospice decision in Election Statements.  Unscrupulous hospice companies often shuffle these forms in front of the designated signatory and have them signed as quickly as possible; completely forgoing the due care required to ensure eligibility and willingness to enter hospice care.  For instance, in our first hospice fraud case against SouthernCare filed in 2007, our client alleged that patients’ Certifications of Terminal Illness were so often in direct contradiction to the patient’s actual condition that false certification of terminal illness was a “systematic practice endemic to SouthernCare.” That case ultimately settled for $24.7 million.

Perhaps the most egregious use of inadequate election statements was the wholesale fabrication of patient election forms we discovered in United States ex. rel. Numbers v. Hernando-Pasco Hospice et. al.  In that case, our clients alleged that Hernando-Pasco Hospice (HPH) obtained signed, blank election and revocation forms for each patient at the time of admission.  After receiving the signed but blank forms, HPH kept a stockpile of signed, blank election and revocation forms to “discharge” patients from hospice when they had been on service far too long.  HPH would then “re-admit” the patient on a new term of care in order to subvert detection that the patients were not hospice eligible in the first place.  That case ultimately settled for $1 million.

The HHS OIG report makes several recommendations that designed to help remedy the problem of insufficient hospice documentation and limit the use of inadequate documentation as a vehicle for hospice fraud.  Specifically, the report recommends that CMS 1) Develop and disseminate model text for election statements; 2) Instruct surveyors to strengthen their review of election statements and certifications of terminal illness; 3) Educate hospices about election statements and certifications of terminal illness; 4) Provide guidance to hospices regarding the effects on beneficiaries when they revoke their election and when they are discharged from hospice care.

Hospice care is growing, in 2013, Medicare paid $15.1 billion for hospice care for roughly 1.3 million people who were treated by 3,925 for-profit and non-profit programs throughout the country.  Enforcing these recommended stricter documentation requirements and fraud detection programs will hopefully help restrict hospice fraud from becoming an even larger bane of the Medicare system.