HCFA cost report draft perplexes hospice leaders

Another draft may be needed to fix discrepancies

Hospice leaders have expressed consternation over a draft hospice cost report released for comment in August by the Health Care Financing Administration (HCFA) in Baltimore — especially since hospice representatives had met with HCFA prior to its development to offer input and recommendations.

They say the draft report contains numerous line errors and misstatements, as well as leaving out some of the key recommendations they had discussed with HCFA staff. However, they express hope that the errors are inadvertent, not a reflection of some hidden agenda by the government. It seems probable, based on these concerns, that HCFA will need to issue a second draft of the cost report for additional comment, before finalizing it.

Members of the task force that worked with HCFA on developing the hospice cost report, including representatives from the Arlington, VA-based National Hospice Organization and the Washington, DC-based Hospice Association of America, reconvened in Washington in late September to go through the draft line by line to compile a detailed critique in time for the Sept. 30 deadline for comments. They also hope to meet in person with Tom Hoyer, HCFA’s director of the Office of Chronic Care and Insurance Policy, to amplify their concerns.

"There are multiple errors in the cost report draft, such as references to lines that don’t exist," says Teresa Craig, CPA, vice president for finance and MIS at Hospice Inc. in Wichita, KS, and a member of the cost report task force. A number of pages seem to have been copied straight from skilled nursing facility or home health agency cost reports, with only partial adaptation to hospice regulations, she says. "It’s kind of a mess, and frankly, I’m disappointed. Maybe all of the other things going on in HCFA resulted in the creation of a document that is less than satisfactory," Craig speculates, adding that she hopes the final product will turn out to be easier for hospices to understand and complete.

A new cost report for Medicare-certified hospices was mandated by Congress in last year’s Balanced Budget Act, and was due to go into effect starting with providers whose fiscal years began Oct. 1, 1998, with their first cost reports due 17 months after that date. However, implementation already has been set back six months by HCFA, and likely will need to be delayed even further. There was not enough time to develop electronic standards for submitting the hospice cost report, so the reports will have to be submitted manually.

Do Medicare rates reflect costs?

A primary aim for the new hospice cost report is to determine whether current Medicare reimbursement rates reflect the actual costs of providing hospice care. That is why hospices are vexed over statements in the published draft that bereavement and volunteer services are "required hospice services" but are not reimbursable. The task force hopes to clarify what this really means, given hospice’s all-inclusive per-diem reimbursement structure, Craig says.

Regardless of how the controversies are resolved, she says, time sheets to allocate hospice staff time and costs of providing different levels of care and administrative overhead still will be important. HCFA’s draft cost report does not break down costs between patients residing in nursing homes or their own homes, but she recommends that hospices start tracking such data. Craig urges hospices not currently tracking their professional staff’s time and costs to start doing so because these data eventually will be necessary for completing the mandated cost report. (A sample time sheet for field staff is presented on p. 138.)