Aug 22, 2023

CMS is Taking Action to Address Benefit Integrity Issues Related to Hospice Care

Dara A. Corrigan and Dora L. Hughes, MD, MPH, Centers for Medicare & Medicaid Services

Effective oversight and enforcement are important to protect the integrity of the Medicare program, especially for vulnerable, seriously ill individuals and their families. The Centers for Medicare & Medicaid Services (CMS) has an important role to play in ensuring that hospices are providing necessary and critical, high-quality care to our Medicare beneficiaries at the end of life.

Hospice, at its core, provides palliative care and support for people who are terminally ill and for their families. People who elect to receive hospice care generally receive their care at home by a specially trained team of professionals and caregivers. Hospices provide care for the “whole person,” which means not only providing care directed at meeting the patient’s physical needs, but care that meets their emotional, social, and spiritual needs as well.

Unfortunately, hospices are profiting from fraud at the expense of beneficiaries far too often. Recent media reporting, and research by CMS, have identified instances of hospices certifying patients for hospice care when they were not terminally ill and providing little to no services to patients. The media reports identified that these activities led to a rapid growth in potentially fraudulent hospices, particularly in Arizona, California, Nevada, and Texas. Some of the addresses listed for these hospices also appeared to be non-operational. This reporting also brought attention to a trend of “churn and burn” schemes where a new hospice opens and starts billing, but once that hospice is audited or reaches its statutory yearly payment limit, it shuts down, keeps the money, buys a new Medicare billing number, transfers its patients over to the new Medicare billing number, and starts billing again.

In response to these findings, CMS revisited and revitalized our hospice program integrity strategy, focusing on identifying bad actors and addressing fraudulent activity to minimize impacts to beneficiaries in the Medicare program. As part of this strategy, CMS embarked on a nationwide hospice site visit project, making unannounced site visits to every Medicare-enrolled hospice. Our goal was to protect patients and their families from engaging with fraudulent actors by making sure that each hospice is operational at the address listed on their enrollment form. If a hospice was not operational at the address listed on their Medicare enrollment form, CMS exercised its authority to either deactivate or revoke the hospice’s Medicare billing privileges. As of mid-August, CMS has visited over 7,000 hospices.

As a result of the site visit initiative, nearly 400 hospices are being considered for potential administrative action as of mid-August. While some of these hospices may be able to demonstrate compliance by submitting a valid provider address, others that do not address our findings may be deactivated or revoked. Because of the noted rapid growth in the number of potentially fraudulent hospices in Arizona, California, Nevada, and Texas, CMS is also implementing a provisional period of enhanced oversight in these states. During this period, CMS will conduct a medical review before making payments on claims submitted by newly enrolling hospices. This additional oversight will help ensure that the newly enrolled hospices are treating only patients who truly need hospice care.

With the same goal in mind, CMS is initiating a pilot project to review hospice claims following an individual’s first 90 days of hospice care. Doing this earlier during a patient’s length of stay will help inform future medical review activities aimed at determining whether hospices are submitting claims to Medicare for patients that are eligible for the benefit. This pilot will not be limited to Arizona, California, Nevada, and Texas.

In addition, CMS proposed several regulatory changes this year to better tackle hospice fraud,  some of which were suggested by the hospice industry. This includes proposals that would:

  • Prohibit the transfer of the provider agreement and Medicare billing privileges of a new hospice for 36 months — like the existing rules for home health agencies;
  • Clarify that the definition of “Managing Employee” on the Medicare enrollment application form includes the administrator and medical director of a hospice;
  • Implement a hospice Special Focus Program (SFP), as required in the Consolidated Appropriations Act (CAA), 2021, that would increase oversight of poor-performing hospices that have repeated cycles of serious health and safety deficiencies; and
  • Include criminal background checks for owners upon initial Medicare enrollment.

CMS also recently finalized a requirement allowing us to screen hospice certifying physicians to ensure they are qualified to treat Medicare beneficiaries, including making sure they have active licenses and do not have felony conviction records.

Additionally, CMS has been hard at work implementing new survey and enforcement requirements, with a goal of making sure that hospices enrolled in Medicare are fully able to provide high quality care. State agencies and national accrediting organizations are required to conduct surveys of hospices to make sure they provide all required services and meet all hospice conditions of participation. These surveys must occur before hospices are certified for participation in Medicare and at least every three years thereafter. CMS recently finalized policies, enacted in the CAA, requiring surveyors to use multidisciplinary survey teams, prohibiting surveyor conflicts of interest (such as prohibiting surveyors from performing a survey of a provider where they have an ownership interest or are employed), and requiring surveyors from accrediting organizations (AOs) to complete comprehensive training and testing. Additionally, AOs are now required to collect standardized survey deficiency information in the same manner and format used by State Survey Agencies, and this information is disclosed on the Quality, Certification, and Oversight Reports (QCOR) public facing website. We also intend to publicly post survey information on Care Compare to offer patients and their families even more information and transparency into the quality of care provided by hospices in their area.

CMS is committed to addressing benefit integrity and quality issues across our programs to protect Medicare beneficiaries and their families. We take our role as stewards of the Medicare Trust Funds seriously, and we work to ensure that taxpayer dollars are spent on high quality, necessary care for each beneficiary. Part of this includes preventing fraud, waste, and abuse from taking place in the first place. CMS has adopted new policies and safeguards to quickly identify and take action against hospices engaged in such practices, to ensure they are providing critical, quality care to some of our most vulnerable beneficiaries at end of life. 

The CMS Center for Program Integrity’s mission is to detect and combat fraud, waste, and abuse across Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Marketplace. We do this by working with providers, states, and other interested parties to support proper enrollment and accurate billing practices to make sure CMS is paying the right provider the right amount for services covered under our programs.

The CMS Center for Clinical Standards and Quality oversees compliance with the Medicare health and safety standards for laboratories and all providers and suppliers, including hospices, hospitals, nursing homes, home health agencies, end-stage renal disease facilities, and other providers and suppliers serving individuals with Medicare and Medicaid/CHIP.