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April 23, 2014

SNF - Hospice Contracts Under the New Hospice Medicare Conditions of Participation

Our article in the December 2008 issue of Shorts on Long Term Care, about CMS’s revised hospice Medicare Conditions of Participation (CoPs) and their impact on the existing contracts that nursing homes may have with hospice agencies, generated some questions. Here are some of the questions we’ve heard and the answers:

Q: Do the new CoPs apply only to hospices or also to the SNF, where the SNF has a contract with a hospice agency to provide hospice care to a resident of the facility?
A: This question came from an SNF provider that expressed concern over some of the new language it was seeing in revised contracts sent by the hospice to be executed. The gist of the question was “if we choose not to accept the revised contracts, what happens?” Technically, these new CoPs apply to the hospice, not to the SNF. However, the new CoPs are very specific about issues that must be addressed in any SNFhospice contract (see our December 2008 article for details). So the hospice is required to include these new provisions in all their contracts with SNFs, and those requirements do impose some additional burdens on the nursing home as well as the hospice. For example, both parties must coordinate their care of a hospice SNF resident more closely, with specific documentation of how they plan to do this. There are other areas where the SNF will have to work closely with the hospice to meet the new CoPs. Because the hospice is required to meet the new CoPs, including the contract requirements, if an SNF refuses to enter into a new agreement with a hospice that complies with the new CoPs, that hospice would be within its rights to cancel any existing agreement and discontinue services. In addition, since nursing homes are required under state and federal law to provide care that is appropriate for and needed by a resident, a refusal to treat hospice patients consistent with the new CoPs could be a basis for deficiency citations against the nursing home. So, if they plan to continue offering hospice in the nursing facility, both parties need to find language they can live with that also complies with the new CoPs.

Q: If my nursing home already has a contract with our hospice agency that is not scheduled to expire or be renewed at this time, are we still required to enter into a new agreement with the hospice now, or can we wait until our current contract term ends?  
A: Generally, you are not required to execute a new contract with an entity with which you already have an existing, ongoing agreement. However, most contracts contain language stating that if the existing contract is inconsistent with applicable law, the parties agree to negotiate in good faith to revise the contract to remedy any such noncompliance. Given the fairly extensive changes made by the new hospice CoPs to various types of contracts, hospice agencies have a pretty good argument that the contracts they had in place under the old regulations probably are not totally compliant with the revised CoPs. As a result, those agencies will need either to amend those contracts to meet the new CoPs, replace them entirely (which many hospices are opting to do, given the scope of changes required by the new CoPs) or terminate the services they were offering under the old agreement. Continuing to use contracts that are not fully compliant with the CoPs puts hospices at risk for deficiency citations, potential loss of payment and, at least in theory, loss of Medicare certification.  

Q: When should my new or amended contract with my hospice agency be in place?  
A: Technically, the effective date of the new CoPs was December 2, 2008. So, ideally, those revised contracts should already be executed by both parties and in place. Realistically, we don’t expect state surveyors to be out checking the detailed language of providers’ contracts right away, since the providers are still getting used to the new CoPs themselves. However, we have been told that if a complaint by a patient, family member or staff member leads the survey team to a contract as part of the problem, it’s fair game for the team members to request and review all contracts in detail, if they choose. Also, hospice surveyors are directed to request a list of certain hospice contracts during the survey entrance conference, so they can easily request copies as well, if they choose.

© 2009 Poyner Spruill LLP. All rights reserved

About the Author

Partner

Ken is a long term care attorney advising clients on a wide variety of legal planning issues arising in the skilled nursing facility setting, assisted living setting, and other spheres of long term care. He is a frequent national lecturer and author of industry manuals, national trade journal magazine articles and similar training tools. He serves Poyner Spruill clients by focusing on legal issues impacting the long term care and health services sector. Ken also serves as head of Poyner Spruill's Health Law Section.

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