Hospice stay unlikely to bring charges of fraud

A recent letter from the former administrator of the Health Care Financing Administration (HCFA) appears to dispel fears that hospice referrals could inadvertently lead to charges of health care fraud.

Nancy-Ann DeParle recently issued a letter to hospices explaining that the government will not consider a stay of longer than six months reason to suspect health care fraud. The letter was issued in response to concerns in the health care community that a physician could refer a patient to a hospice, thinking that the patient would not live longer than six months, and then be charged with fraud if the patient lived substantially longer.

The concern partly arose because the federal government’s continuing crackdown on fraud in health care has included an emphasis on hospice care. In the Office of Inspector General’s "Compliance Program Guidance for Hospices," regulators make it clear that there are many ways in which hospice programs can result in fraud charges, but the guidance documents specifies one risk area as "admitting patients to hospice care who are not terminally ill." (The compliance guide can be found on the Internet at www.hhs.gov/progorg/oig/modcomp/hospic99.htm.)

The key is that a hospice patient may receive reimbursement for hospice services under Medicare only if he or she is "terminally ill." That term has generally been interpreted as meaning the patient will die within six months. But even the most experienced physician can find it difficult to pinpoint the time remaining.

The compliance guide says "it is important to make a distinction between admitting a patient to a hospice program and certifying a patient for the Medicare Hospice Benefit. Based on an individual hospice’s admission criteria, some patients may be admitted to hospice care prior to an estimated six months before death, as long as the hospice is paid fair-market value for its services. Regardless, patients can be certified for the Medicare Hospice Benefit only when it is reasonable to conclude that a patient’s life expectancy is six months or less if the illness runs its normal course. In other cases, alternative modes of reimbursement, often provided through community support, should be sought outside the Medicare Hospice Benefit."

Congress critical of short hospice stays

Partly as a result of the way health care professionals interpret those rules, patients are entering hospices only at the end of their lives, according to a new report from the General Accounting Office (GAO), the investigative arm of Congress. The GAO report says that 28% of all Medicare beneficiaries in the hospice program received hospice care for one week or less.

The director of health care studies for the GAO, William Scanlon, says the health care community has been dissuaded from referring patients to hospice early enough for them to truly benefit. The average Medicare patient in the hospice program received 59 days of hospice care in 1998, down 20% from an average of 74 days in 1992, Scanlon reports.

"Although more Medicare beneficiaries are receiving hospice services, they are, on average, receiving fewer days of care than did beneficiaries in the past," he says.

Part of the problem may involve the changes in the overall hospice population, Scanlon says. Hospices used to care primarily for cancer patients, which accounted for 75% of all Medicare hospice patients in 1992, according to the GAO report. But now cancer patients account for only about half of Medicare hospice care, with 43% of the patients dying from heart and lung disease, stroke, and other ailments.

Some of the conditions now commonly found in hospice programs pose more of a challenge to physicians attempting to estimate the patient’s life expectancy, Scanlon says.

There is no six-month time limit

In her letter to hospices, DeParle acknowledged that the health care community has been spooked by the possibility of such fraud charges and clarifies that there is little to fear.

"Under the law, Medicare beneficiaries are eligible for hospice care when they decide to choose palliative and other care from a hospice, and a physician and the hospice medical director certify that they have a medical prognosis of six or fewer months to live if their illness runs its normal course," DeParle wrote. "The Balanced Budget Act of 1997 made important changes to the law to ensure that patients whose prognosis improves or who choose to resume curative care can leave hospice and return at a later date.

"However, I am concerned that some individuals who want and could benefit from hospice care may not be receiving it or may be receiving it late in the course of their illness because the difficulty in making end-of-life prognoses may affect their access to hospice care. There also is a disturbing misperception that hospices and beneficiaries will be penalized if a patient lives longer than six months. Nothing could be further from the truth.

"There have been a handful of cases in which beneficiaries who were not carefully diagnosed in the first place were inappropriately enrolled in hospice. Nevertheless, that is very different from situations in which a terminally ill patient has had the good fortune to live longer than predicted by a well-intentioned physician.

"Let me be clear:

" In no way are hospice beneficiaries restricted to six months of coverage.

" There is no limit on how long an individual beneficiary can receive hospice services, as long as they meet the eligibility criteria.

"As long as a physician continues to properly and conscientiously recertify the six-month prognosis, a beneficiary can continue to receive the hospice benefit."

DeParle pointed out in the letter that about 10% of Medicare hospice beneficiaries stay longer than six months. She also announced that HCFA may develop a voluntary program in which physicians and hospice directors can seek confirmation from Medicare contractors before enrolling beneficiaries in a hospice.

"A preauthorization program would help beneficiaries and providers, in cases where prognosis is difficult, by pre-empting concerns about denial of claims and thereby promoting earlier enrollment for more beneficiaries who want and are eligible for hospice care."