The Department of Health and Human Services Office of the Inspector General (HHS-OIG) conducted an audit to determine whether Medicare properly paid acute-care hospitals for outpatient services provided to hospice enrollees for a 5 year period spanning calendar years 2017 through 2021. Out of 100 outpatient claim service lines billed with condition code 07 indicating that the outpatient services were not related to the enrollees’ terminal illnesses and conditions, the audit found that 70 of those paid claim lines did not comply with Medicare’s requirements and indeed related to the hospice’s primary diagnosis code. The OIG audit estimated that Medicare could have saved $190.1 million for this audit period if payments had not been made to acute-care hospitals that provided outpatient services to hospice enrollees because these services were already covered as part of the hospices’ per diem payments and should have been provided directly by the hospices or under arrangements between the hospices and acute-care hospitals. In addition, enrollees could have saved $43.6 million in Medicare deductibles and coinsurance that may have been incorrectly collected from them or from someone on their behalf.
From this audit, the OIG made several recommendations to the Centers for Medicare & Medicaid Services (CMS), including that CMS: (1) improve system edit processes to help reduce improper payments for outpatient services provided by acute-care hospitals to hospice enrollees; (2) educate acute-care hospitals to analyze whether outpatient services palliated or managed conditions related to enrollees’ terminal illnesses; and (3) clarify Medicare guidance to specifically mention “related conditions.1”
Most health plans offer benefits for hospice services that can vary in some elements from CMS’ reimbursement policies. Regardless, hospice providers are responsible for caring for terminal hospice diagnosis of the commercial beneficiary, therefore acute care hospitals should not be compensated for treatment related to the terminal diagnosis. We recommend each health plan clearly defines its hospice policy, including how related conditions apply. Also, vital to health plan compliance is monitoring of claims for date of service overlap between outpatient hospital claims and hospice claims for the same beneficiary, focusing on services that relate to the hospice diagnosis. Don’t pay a hospice provider to care for your beneficiary’s terminal condition and additionally pay a hospital for the same. In this healthcare environment, your health plan must have a plan to prevent this. Include focused edits designed to prevent duplicitous payments for care related to the terminal condition of your hospice beneficiaries.
Context4 Healthcare (C4H) has edits that alert our users of overlap between hospice claims and hospital claims (both outpatient and inpatient). If your health plan is vulnerable to such overlap, consider the Payment Integrity Solutions that C4H has to offer.
