OIG Special Agents Sound Off on Hospice Fraud, CMS Rules

In one example of hospice fraud, a provider was caught billing for 17 days of general inpatient care for a 70-year-old Medicare beneficiary, though a caregiver had never even visited him.

In another case, an owner a hospice was found to be using recruiters to solicit and enroll beneficiaries for hospice care when they were not eligible in the first place.

These are just a few of the many instances of billing fraud happening throughout the hospice industry, collectively costing the government hundreds of millions of dollars each year, according to the U.S. Department of Health and Human Services’ Office of Inspector General (OIG). As the main federal watchdog tasked with sniffing out misconduct related to Medicare, Medicaid and dozens of other government programs, OIG highlighted the cases in a scathing report released last month.

While egregious, they only reveal a fraction of the Medicare hospice program’s numerous overall vulnerabilities, OIG officials and investigators—including a special agent who works undercover—told Home Health Care News during recent follow-up interviews.

“Increasingly, we’re uncovering fraud schemes that are quite concerning,” Jodi Nudelman, regional inspector general for OIG, told HHCN. “Particularly when beneficiaries are just unaware that they’re even being enrolled in hospice.”

Providers should know that OIG is on the lookout for illicit marketing maneuvers and unlawful physician kickback arrangements.

They should equally note that OIG is trying to get the Centers of Medicare & Medicaid Service (CMS) to crack down on the problems.

Why hospice fraud matters

Hospice services are growing in popularity among Medicare beneficiaries nearing the critical and highly emotional stages of end of life.

In 2016, Medicare paid hospice providers nearly $17 billion. A decade earlier, that total was about $9.2 billion. More money is on the way for hospices, too, as CMS announced in its final rule that it’s increasing payments by about $340 million for fiscal year 2019.

That makes identifying areas of concern for hospice fraud, waste and abuse all the more important, Nancy Harrison, deputy regional inspector general for OIG, told HHCN.

“That’s what [OIG] is trying to highlight,” Harrison, who served as lead author of the July report, said. “We’ve pointed out some instances where hospice services have been inappropriately billed [and] there are instance where hospices are not providing good care.”

Hospice care has the potential to provide great comfort to beneficiaries, sometimes helping to extend patients’ lives. Likewise, hospice care has been shown to reduce health care spending by curbing emergency room visits and intensive care stays.

Besides improper billing, though, OIG has repeatedly found throughout the past decade that hospices do not always provide necessary services, sometimes even skimping on care over weekends or disregarding patients’ care plans.

“We’ve found problems with the plan of care throughout our hospice work,” Harrison said. “Let’s remember that the hospices are the ones that developed the plans of care, so, they basically set their own bar. If they can’t meet that, that’s very concerning.”

Unlike other players in the health care system, hospices are reimbursed on a daily basis, largely irrespective of the number of services or quality of care they provide, according to Harrison. Most of the problems OIG focuses on involve for-profit hospices, she said.

All providers are required to provide distinct levels of care depending on patient needs, ranging from routine and continuous home care services to inpatient respite care and general inpatient care.

“We’ve found that hundreds of hospices only provide one level of care, routine home care, to their beneficiaries … and there are four levels of care,” Harrison said. “When we see hospices only providing one level, it raises questions as to whether their beneficiaries have access to the care they need.”

In 2012, hospices billed one-third of general inpatient care stays inappropriately, costing Medicare $268 million, according to OIG.

Predatory recruiting a top concern for investigators

Hospice fraud is on a spectrum, Derrick Jackson, a longtime HHS investor who currently holds the title of special agent in charge for OIG, told HHCN. Broadly, there is improper billing and similar administrative-level offenses on one end, he said, and then there’s the egregious cases that are possibly criminal on the other.

All shades of fraud are important to OIG, but addressing the more flagrant cases are the top concern of its special agents, according to Jackson, who oversees the agency’s seven-state South East region, which is made up of Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee.

Florida is not included in Jackson’s jurisdiction because it is its own region, being “ground zero” for health care fraud, he said.

“We want to solve all of the hospice problem,” Jackson said. “But first we want to get the [hospice providers] that aren’t even close to legitimate, hospices that aren’t even providing any services. We’ve got to get those off the street.”

Predatory recruiting has become a mounting concern for OIG as part of those efforts. Predatory recruiting is when hospice providers target and enroll beneficiaries by using deceitful and aggressive tactics.

“You’ve got patients—some who can’t even read and write—signing election statements to be put on hospice when they don’t even know what it is,” an OIG special agent who operates throughout the state of Mississippi told HHCN. “This is because they’re solicited door-to-door by a recruiter offering house cleaning, free drugs and trips to the doctor.”

The special agent, who deals almost exclusively with routine home care cases, requested anonymity for this story due to the undercover nature of his work.

“These recruiters knock on the door and essentially lie to these patients,” the special agent said. “A lot of times, recruiters don’t even use the word ‘hospice’ because patients know what that means and would turn them away.”

OIG found in at least one case that the person doing the recruiting for a hospice was a convicted rapist, the special agent said. In Mississippi, hospice fraud and abuse has become such a problem that policymakers implemented a statewide moratorium preventing new hospices from opening.

In general, an individual who meets hospice eligibility requirements files an election statement with a particular hospice to confirm that he or she is forgoing rights to curative care in favor of palliative care. The statement itself is put together by a hospice provider and must be signed by a beneficiary or authorized representative before care begins.

OIG has reported in the past that hospice election statements commonly lack required information or contain other vulnerabilities. In one recent analysis, and random sampling, OIG found issues with 35% of election statements associated with general inpatient care stays.

“The fact that beneficiaries and their families don’t get important information that they need to make decisions about their care, that’s another major vulnerability,” Harrison said.

In addition to predatory recruiting tactics, physician kickbacks in exchange for patient referrals are also a top concern for OIG.

“We’re looking at kickbacks and dirty docs who get into agreements where for every patient they [refer], they get $500, $600 or $700,” Jackson said. “Hospices might cut a kickback arrangement with a dirty doc who doesn’t know the patient, has no relationship.”

The undercover special agent operating in Mississippi said he’s seen a kickback case where a doctor living in a mobile home was getting paid $18,000 per month for signing hospice orders.

“The doctor would sign anything you put in front of him,” the special agent said.

Hospice Compare offerings too ‘limited,’ officials say

To help hold hospices accountable, OIG can conduct audits and national inspections, also known as evaluations. The agency also gets involved in False Claims Act legal battles and launches its own investigations.

OIG identifies hospices for follow-up investigations in a handful of ways, according to Jackson. Those methods include following up on tips filed via Health and Human Services’ fraud hotline, using data analysis to analyze claims, monitoring whistleblower lawsuits and pursuing special agents’ independent leads.

In the report issued last month, OIG compiled 15 recommendations to CMS on how the Medicare hospice program could be improved from a vulnerability perspective. In a response letter from Administrator Seema Verma, CMS disagreed with more than half of those recommendations.

Recommendations included furthering refining Hospice Compare to provide more transparent information for beneficiaries and their families. Specifically, OIG would like CMS to include claims-based and deficiency data from surveys.

“I think it’s important for providers who are playing by the rules and going things right to let people know that,” Harrison said. “They can support this idea of having more information up on the compare site. I think that a provider who’s following all the rules would want to tout their success and be eager to be compared to other hospices.”

From his position in Mississippi, the anonymous special agent who spoke with HHCN also said he’d like CMS to implement stricter rules for how, when and where hospice providers can market to beneficiaries.

For example, while CMS prohibits door-to-door sales by providers of durable medical equipment (DME), it does not prohibit door-to-door hospice recruiting, he said.

“You cannot own a DME and go knock on somebody’s door because that’s prohibited,” the special agent said. “What’s frustrating for me as an investigator is that CMS does not prohibit door-to-door solicitation of hospice, so [recruiters] go door-to-door selling a death service … it makes no sense.”

Written by Robert Holly

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Robert Holly
When Robert's not covering the latest in home health care news, you can likely find him rooting for the White Sox or roaming his neighborhood streets playing Pokemon Go. Before joining HHCN, Robert covered everything from big agribusiness to the hottest tech startups. 

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