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The Office of Inspector General (OIG) has issued a special fraud alert, alerting the public to the high potential for fraud between hospices and nursing home operators.
How Does the System Work?Medicare provides palliative care in the form of hospice benefits to individuals who are terminally ill. That means the emphasis is on pain control, symptom management, and individualized counseling for not only the patient but her family too.
Medicare hospice payments have exploded, increasing from about $958 million for fiscal year 1993 to over $1.8 billion for fiscal year 1995. That still represented only about 1.5 percent of Medicare Part A benefits, but with an ever-growing old-age community, it’s bound to continue a meteoric growth trajectory.
A Medicare patient is eligible for Medicare Part A services only if he is entitled to these services (usually age 65) and his doctor has certified he’s terminally ill.
That means he’s received a prognosis of life expectancy than less six months for his particular disease if it runs its normal course. Enrolment also disqualifies him from receiving any curative care for his diagnosis. Now, he can still receive treatment from his non-hospice physician for treatment of conditions unrelated to his terminal illness.
The hospice must meet level and type of service requirements as well and have a written plan to fulfill them. Typical service requirements include physician and nursing services, speech, physical and occupational therapy, counseling and respite care as examples.
Although some of the core hospice services must be provided by the hospice directly to the beneficiary, others may be provided by other caregivers. However all must be under the management of the hospice provider.
How is Hospice Care Reimbursed in Nursing HomesMost of the time, hospice care services are provided to beneficiaries in their home. As a result, Medicare makes no special allowances for such services when provided in a nursing home.
As such, hospices receive the same rates when they provide their services in a nursing home as they would in a home-based delivery. This is a fixed amount per day regardless of the quantity or intensity of services delivered.
However, there’s a small twist. The beneficiary must pay his own room and board, unless he’s eligible for Medicaid benefits for those charges. When he receives hospice care in the nursing home, however, Medicaid pays the hospice 95% of the state’s daily nursing home rate and the hospice pays the beneficiary’s room and board.
Each state’s own Medicaid program determines which services must be included in the hospice’s program. One other thing: the hospice may contract with the nursing home to provide some of the non-core hospice services which it may lawfully outsource.
Potential for Abuse and Medicare fraud in the Nursing Home-Hospice RelationshipThe largest area for potential abuse in this cozy relationship between hospices and nursing homes stems from the nursing home’s control over whom it will allow to provide hospice services in its facilities.
A hospice can derive substantial and recurring revenue if it has an ongoing exclusive contract to serve a large nursing home’s patient base. This situation is ripe for the offer or request of financial kickbacks, incentives and other lucrative means to both parties.
Think about it. A nursing home’s captive residents can represent an endless supply of hospice patients.
Here’s another thing. Records show that patients receiving hospice care in nursing homes, on average, receive a longer course of treatment than home-bound hospice patients.
Another problem is that an overlap of services may exist in a nursing home. In this scenario, some of the services the hospice would be obliged to provide to its home-bound patients may be provided, either inadvertently or by design, by nursing home staff.
An OIG study showed that it’s sometimes the case that nursing home hospice patients receive fewer services than their home-bound counterparts. And since hospice providers are paid a flat rate, providing fewer services may positively affect their profitability and lessen their operating costs.
Kickbacks to Influence Medicare or Medicaid ReferralsAs in many health care fields, kickbacks are strictly prohibited by federal health care program, including Medicare and Medicaid.
The ant kickback statute strictly prohibits the solicitation, receipt, offer or payment of “anything of value” to induce referrals of items or services payable by any federal health care program.
One particular area the OIG has observed as a potential source of abuse is when a hospice is paid a higher daily rate for a patient it refers to a nursing home. The law states that a hospice patient should be charged no more than if he had been enrolled as a non-hospice patient.
Any additional charges must be in line with the fair market value for the services he received and they must NOT be included in the Medicaid daily rate.
The alert mentioned some practices that seem to prevail in these fraudulent schemes:
The report pointed out that anti-kickback violators face severe consequences, including criminal prosecution, monetary penalties and possible exclusion from federal health care programs and benefits.