In 2013, the Department of Justice (“DOJ”) and Office of Inspector General (“OIG”) charged the nation’s largest for-profit hospice chain, Vitas Innovative Hospice Care (“Vitas”), with false Medicare billings, inappropriately admitting patients with “aggressive marketing tactics,” and misleading patients and families about Medicare hospice benefits. This suit is just one of many recently filed against hospice providers, indicating that they are being watched keenly by enforcement authorities and government agencies.

According to a report released in 2012 by the U.S. Department of Health and Human Services (“HHS”) and the DOJ, Medicare spending on hospice care for nursing home residents increased by 70% between 2005 and 2011. In 2011 alone, Medicare spent $13.7 million on hospice services in 2011. It should be no surprise in light of these high spending on hospice care that audits will increase in order to reduce health care costs and curtail fraud and abuse. In fact, the 2014 OIG Work Plan made it readily apparent that the agency would be focused on (1) hospice services provided in assisted living facilities with special attention to the length of stay, levels of care, and common terminal illnesses; (2) hospice marketing, referrals, and Anti-Kickback in nursing home care; and (3) hospice inpatient care. Specifically, auditors are interested in reviewing:

(1)    Extensive lengths of stay

(2)    Excessive units of physician services

(3)    Credentials and qualifications

(4)    Care plans, and

(5)    Beneficiary contributions

It is imperative that providers remember the strict requirements that accompany hospice care. To qualify, beneficiaries must (1) be eligible for Medicare Part A; (2) have a terminal illness with a prognosis of six months or less as certified by a physician; (3) receive treatment from a Medicare-approved hospice; and (4) consent to waive his/her right to curative treatment for the terminal condition.

If you are a provider of hospice care, the question is not if, but when, an auditor will show up at your door. Before that happens, you need to enact a comprehensive compliance program that addresses all targeted areas of concern, as expressed by the OIG, DOJ, and HHS. An audit can lead to hefty fines, burdensome corporate integrity agreements, exclusion from Medicare, or indictments. When you hear that knock upon the door, immediately contact your designated compliance officer and legal counsel, if necessary, to determine how to proceed.