I. Introduction
On July 21, 1999, the HHS Office of Inspector General ("OIG") published thirty pages of draft guidelines for hospices seeking to develop internal compliance programs to prevent and detect violations of federal and state law. The draft guidelines appeared in the Federal Register in Volume 64 at page 39150 and on the Internet at www.hhs.gov/progorg/oig/modcomp/hospi799.htm. The Health Care Financing Administration ("HCFA") will accept comments on these draft guidelines until 5 P.M. on August 20, 1999. These draft guidelines are useful because they describe the OIG's position on a wide range of compliance issues, and alert hospices to the enforcement priorities of the OIG and the Department of Justice ("DOJ").
Compliance programs are designed to demonstrate to government authorities that a hospice has made a commitment to adhering to all relevant laws as a matter of everyday practice. In addition, a compliance program that conforms to the criteria in the United States Sentencing Guidelines for Organizations establishes a strong basis for minimizing any penalties should a violation occur notwithstanding the organization's best efforts to comply with the law. This can prove to be a costly pitfall for hospices without effective compliance programs, since many federal investigations now routinely rely on the False Claims Act, which provides for treble damages and fines of up to $10,000 per claim to be paid to the federal government for each offense. Thus, a compliance program that monitors patient care and reimbursement issues can be an effective operational and management tool.
Given the variations in the organization of hospices (i.e., location, size, for-profit or not-for-profit status, hospital-based or freestanding), the guidelines are not a substitute for each hospice developing and implementing a compliance program that is tailored to its individual circumstances. (1) The major sections of the draft guidelines are discussed below.
II. Risk Areas
The OIG has identified twenty-nine risk areas for hospices. These risk areas are listed below and explained in great detail in the footnotes at the end of the draft Compliance Program Guidelines.
This Alert will discuss in greater detail those risk areas highlighted by the OIG.
.uninformed consent to elect the Medicare Hospice Benefit;
.discriminatory admission;
.admitting patients to hospice care who are not terminally ill;
.arrangement with another health care provider who a hospice knows is submitting claims for services already covered by the Medicare Hospice Benefit;
.under-utilization;
.falsified medical records or plans of care;
.untimely and/or forged physician certifications on plans of care;
.inadequate or incomplete services rendered by the Interdisciplinary Group (IDG);
.insufficient oversight of patients receiving more than six consecutive months of hospice care;
.hospice incentives to actual or potential referral sources (e.g., physicians, nursing homes, hospitals, patients, etc.) that may violate the anti-kickback statute or other similar Federal or State statute or regulation, including improper arrangements with nursing homes;
.overlap in the services that a nursing home provides, which results in insufficient care provided by a hospice to a nursing home resident;
.improper relinquishment of core services and professional management responsibilities to nursing homes, volunteers, and privately-paid professionals;
.providing hospice services in a nursing home before a written agreement has been finalized, if required;
.billing for a higher level of services than was necessary;
.knowingly billing for inadequate or substandard care;
.inadequate justification in the medical record when a patient revokes the Medicare Hospice Benefit;
.billing for hospice care provided by unqualified or unlicensed clinical personnel;
.false dating of amendments to medical records;
.high-pressure marketing of hospice care to ineligible beneficiaries;
.improper patient solicitation activities, such as "patient charting;"
.inadequate management and oversight of subcontracted services, which results in improper billing;
.sales commissions based upon length of stay in hospice;
.deficient coordination of volunteers;
.improper indication of the location where hospice services were delivered;
.failure to comply with applicable requirements for verbal orders for hospice services;
.non-response to late hospice referrals by physicians;
.knowing misuse of provider certification numbers, which results in improper billing;
.failure to adhere to hospice licensing requirements and Medicare conditions of participation; and
.knowing failure to return overpayments made by Federal health care programs.
1. Eligibility Requirements
Eligibility requirements have been the frequent subject of investigations and audits. The concern is that only patients who are terminally ill with a life expectancy of six months or less if the illness runs its normal course be admitted under the Medicare Hospice Benefits and services billed to Medicare. Eligibility requirement guidelines focus on policy and procedure requirements, oversight mechanisms to ensure that the patient is terminally ill when admitted and during the patient's care, the plan of care, utilization of hospice services, levels of hospice care, and services provided to hospice patients in nursing homes.
a. Written Policy and Procedures On Medicare Reimbursement for Eligible Patients
Written policies and procedures must create a mechanism for communication between the clinical and reimbursement staff so that billing Medicare only occurs for eligible hospice patients. They should require the following:
.Clinical factors documenting Medicare eligibility must be completely documented and timely. Patients' record must contain hospice admission history, certification assessment, re-certification assessment, plan of care, identification data, consent and election forms, relevant medical history, and documentation of all hospice services including evaluations, treatments, and progress notes.
.Identify who has the authority to make entries in the hospice patient records.
.Documentation of clinical condition should demonstrate that patient is terminally ill as defined in Medicare eligibility criteria; be legible, organized and consistent; available for audit; record the activity leading to the record entry and identify the person providing the service; and reconcile discrepancies.
.Diagnosis, and procedure codes for hospice services on reimbursement claims must be supported by documentation of clinical condition in the patient's record. The billing must be accurate and comply with all rules.
.Compensation for admission and billing personnel or consultants should not offer any financial incentives to bill for hospice care regardless of whether patient meets eligibility requirements.
b. Terminal Illness As An Eligibility Requirement and Informed Consent
The OIG makes a distinction between admitting a patient to the hospice program and certifying a patient for the Medicare Hospice Benefit. Some patients may be admitted prior to a six month prognosis so long as the hospice is paid fair market value for its services from payors other than Medicare, for example community support. However, if a patient is certified under the Medicare Hospice Benefit the fiscal intermediary will require the physician's "input and rationale beyond a signature on a certification form". If the physician does not examine the patient prior to certification there must be a summary of the physician's review of a recent medical history and physical, or physician documentation of his role in the IDG Group meeting. The final determination of hospice eligibility is the responsibility of the hospice physician.
.Oversight mechanisms to assess that the patient is terminally ill when admitted, at re-certifications and during their hospice care must be made prior to billing Medicare, and be documented.
.Informed Consent Forms must outline the patient's legal rights. The hospice must discuss the terminal illness requirements with the patient and family at the time of election, and repeated during the patient's hospice care. An informed consent must include the name of the hospice providing care; that the patient understands the nature of palliative care; the waiver of standard Medicare benefits related to the terminal illness; the date of election; and the patient or legal representative's signature.
.Written policies and procedures on eligibility requirements must at a minimum require: that prior to hospice admission the hospice physician and attending physician review and certify the admitting diagnosis and prognosis; the medical record contain clinical documentation to support the physicians' certification; the patient or legal representative is informed of the terminal prognosis and the palliative nature of hospice care; the patient's condition is completely reviewed at the IDG meeting; and that the clinical progression and status of the patient's disease and medical condition is documented.
c. Plan of Care
The attending physician, hospice physician and IDG must establish a written plan of care which addresses the individual patient's needs and hospice services to be provided.
.The plan of care must be established before billing.
.The plan of care must include an assessment of the patient, identification of the services provided to relieve symptoms, and detailed description of the scope and frequency of services for patient and family needs.
.The plan of care must be continuously assessed and revised by the attending physician, hospice physician and IDG. These reviews must be documented.
.The hospice must review the appropriateness of the IDG's level of services, treatment modalities, admissions and patient length of stay.
d. Utilization of Hospice Services
A hospice is responsible for providing core services directly, and non-core services either directly or through a contract arrangement, as they relate to the patient's terminal condition. This includes medical, social and emotional support services. A hospice patient should not be compelled to obtain and pay for such care from non hospice providers. A hospice must monitor, evaluate and resolve problems with utilization of services, personnel or facilities. These steps can be accomplished through the IDG conferences, and the application of objective written treatment protocols. According to the OIG, utilization problems may be an indication that the patient is not eligible for the Medicare Hospice Benefit.
e. Levels of Hospice Care
The OIG's basic concern is that the patient's medical condition justify the level of services provided and billed. Under the Medicare Hospice Benefit there are four levels of hospice care with different levels of reimbursement. They are routine home care day, continuous home care day, inpatient respite care day and general inpatient care day. For hospice services to be covered by Medicare they must be reasonable and necessary for the palliation or management of the patient's terminal illness, and ordered by a physician. An example of this abuse is a hospice that provides and bills for continuous care where only routine home care is necessary.
f. Hospices and Nursing Homes
The draft guidelines emphasize that hospice arrangements with nursing homes are a particular risk area, in part because nursing homes have control over hospices permitted to provide services to a facility's residents. Among the specific practices identified as problematic are:
.Potential kickbacks between hospices and nursing homes to influence the referral of patients. Payments by a hospice to a nursing home for the "room and board" component of hospice care to Medicaid recipients should not exceed the amount the nursing home would otherwise receive from Medicaid if the patient were not enrolled in hospice. Any additional payment to the nursing home for the provision of non core services must represent the fair market value of additional services provided to the patient by the facility that are not included in the facility's Medicaid per diem rate.
.Overlap with services that a nursing home provides. Recent OIG reports, referred to in the Guidelines, have described circumstances where services of either the hospice or the nursing home overlap, providing one party the opportunity to reduce services and costs. As a result, according to the OIG, many hospice patients in nursing homes do not receive adequate care. As hospices receive a fixed daily payment, the OIG notes that fewer services may result in higher profits per patient. In addition, if the hospice provides staff at its expense to the nursing home to perform duties that otherwise would be performed by the facility, the practice may constitute an illegal kickback.
.Failure of the hospice to retain management for contracted services provided by the nursing home. While the hospice must provide "core services," such as nursing, medical, social work and counseling services, non-core hospice services may be provided by other providers under contract with the hospice. However, the hospice must be responsible for professional management of all contracted services.
.Coordination of services. The hospice and nursing home together should establish a coordinated plan of care that is based on an assessment of the individual's needs and "unique living situation" in the nursing home. In addition to ensuring that the requisite terminal condition is present (and that hospice services are not premature due to the patient's stable condition), a hospice should have in place policies and procedures that cover in detail the hospice's professional responsibility for services to individuals in nursing homes, including personal and nursing care and administration of medication for pain control.
.Access to medical records. The OIG warns that hospices should not review nursing home patients' medical records in an effort to identify patients for hospice services.
2. Anti-Kickback and Self-Referral Concerns
In order to protect itself from violations of anti kickback and self referral laws on the Federal and State level, the OIG recommends that all hospice contracts with potential referral sources are reviewed by counsel; that the hospice does not claim reimbursement from Federal health care programs for patients who were referred to hospice pursuant to a contract or financial arrangement designed to induce such referrals; and that the hospice does not offer gifts, free services, or other incentives to patients, relatives, physicians, nursing facilities, hospitals, contractors or other referral sources. Potential kickback situations exist in relationships between hospices and nursing homes. Examples are:
.Hospice offering free or below fair market value ("FMV") services or goods to nursing homes to induce referrals.
.Hospice offering free or below FMV services to nursing homes for patients who are receiving care under the Medicare Skilled Nursing Facility Benefit with the expectation that once the benefit is exhausted the patient will be referred to the hospice.
.Hospice referring its patients to a nursing home in return for the nursing home referring its patients to the hospice.
.Hospice payment to nursing homes above the room and board rate for dually eligible patients. Other examples are discussed above.
3. Retention of Records
Hospice compliance programs should include a record system with policies for the creation, distribution, retention, storage, retrieval and destruction of medical and billing documents, and all documents necessary to protect the integrity of the compliance program. Examples are: employee training verifications, hotline reports and investigations, corrective actions, disciplinary actions, internal investigations or audits, modifications to the compliance program, self-disclosures, and auditing and monitoring results.
4. Compliance as An Element of an Employee Performance Plan
An element of an employee's performance evaluation should include complying with, and promotion of, the hospice compliance program. Employees should be periodically trained in compliance policies and procedures. Employees should be given written job descriptions or a checklist describing the employee's compliance responsibilities. These documents should be signed by the employee indicating receipt, and that he will abide with the compliance program.
Managers and supervisors must discuss with their personnel and contractors the compliance policies and legal requirements relevant to their function; that compliance is a condition of employment and that disciplinary action will be taken, including termination, for violations. Managers and supervisors should be sanctioned for failing to instruct their personnel, and for failing to detect noncompliance where reasonable due diligence would have led to the discovery of a violation.
III. Written Standards of Conduct and Policies and Procedures
Every compliance program must contain written standards of conduct for the hospice that have been endorsed by its senior management and its governing body. The standards should be binding on all employees and other professionals, independent contractors, and volunteers performing services for the hospice, as well as other providers operating under the hospice's control, such as pharmacies, durable medical equipment providers, and nursing homes. This element is crucial to demonstrating the organization's commitment to compliance and to deterring fraud and abuse. The OIG has recommended that at a minimum the hospice's procedures address those practices that expose it to a high risk of civil or criminal liability under the fraud and abuse laws. It should come as no surprise that most areas have been addressed in OIG reports, advisory opinions, and fraud alerts.
The Standards of Conduct should be implemented by written policies that articulate the specific procedures hospice staff should follow. Policies should focus on those risk areas discussed above and should be made available to appropriate staff. Although hospices are reimbursed by Medicare on a predetermined fee for each day during the length of care according to the level of care provided, a claim for reimbursement must be developed and submitted. This claim is an indispensable element of many federal and state laws addressing fraud and abuse, and is subject to intense scrutiny in any investigation. In addition to formal written policies, a hospice should strive to ensure that physicians, its clinical staff, volunteers, and billing and reimbursement staff can communicate efficiently and resolve questionable issues before the claim is submitted. As discussed above examples of the key areas of concern to the OIG include:
.adherence to Medicare eligibility requirements;
.development and adherence to a written plan of care for each patient;
.available documentation to support the utilization of hospice services and level of care provided to patients; and
.appropriate billing for patients receiving hospice services in nursing homes.
IV. Compliance Committees and Compliance Officers
Because a compliance plan affects so many segments of a hospice's operations, the functioning of a compliance plan requires the direction of a compliance officer, whose responsibilities include:
.overseeing the implementation of a compliance program;
.reporting to the hospice's compliance committee and governing body;
.reviewing and revising the organization's procedures to conform to changes in the law;
.developing and executing training programs on compliance issues;
.ensuring that independent contractors, agents, and volunteers are aware of its compliance policies;
.coordinating efforts with the agency's human resources staff to prevent employment of sanctioned individuals or entities;
.assisting financial management staff in monitoring internal practices;
.implementing policies to encourage confidential reports of problems or suspected violations; and
.conducting or coordinating internal investigations in response to any such reports and adopting appropriate corrective actions.
The compliance officer should be a high-level official within the hospice with direct access to its CEO or Executive Director and governing body. Notwithstanding this goal, the OIG recommends against the CFO, comptroller, or general counsel (if any) as the compliance officer. Because of concerns about confidentiality, the hospice should work closely with outside health regulatory counsel before it selects its compliance officer and while it performs any preliminary reviews and audits.
Where possible, the guidelines suggest that the compliance officer should be assisted by a compliance committee approved by the hospice's governing body or board of directors. The compliance committee can advise the compliance officer and provide assistance in analyzing strategies for promoting compliance activities and monitoring the functioning of the compliance program in specific areas.
V. Effective Training and Communication
Even the best crafted compliance plan will be useless or even harmful to a hospice without comprehensive training and education of all staff who have any impact on the agency's ability to provide services in accordance with relevant law. Accordingly, the guidelines recommend that all employees, agents, independent contractors, and volunteers receive periodic training covering federal and state law, as well as rules developed by private payors. In the past, when the OIG has settled investigations, it has typically imposed corporate integrity agreements on providers that mandate a minimum of one to three hours of basic annual training for all employees and additional training for coding and billing staff.
In the draft guidelines, The OIG has recommended that training be a condition of employment, and that familiarity with compliance issues should be part of employee's performance evaluation. Of course, the level of training should correspond to the employee's job description and responsibilities; for example, the hospice officers and managers should become familiar with the basic rules for Medicare participation and duties under the fraud and abuse laws, including the rules for appropriate marketing activities. The training for professional staff might emphasize appropriate medical necessity and documentation rules, while the financial staff might receive additional training in proper review of documentation, coding of hospice physician services, and determining the proper level of hospice care. All training sessions should be documented, and the hospice should retain attendance lists and copies of materials distributed to staff. In appropriate cases, failure to comply with training requirements may be the basis for disciplinary action by the hospice.
VI. Effective Lines of Communication
The Sentencing Guidelines require that a compliance plan include a mechanism for employees and agents of an organization to report suspected illegal conduct without fear of retaliation. The OIG guidelines expand on this concept by recommending that a hospice inform all employees of the means by which a confidential report may be made to the compliance officer without fear of retribution or retaliation. Such communications may include (1) reports of suspected fraud, waste, or abuse, or (2) requests for clarification of appropriate procedures or relevant legal requirements. Methods of encouraging confidential reports to the compliance officer that have been endorsed by the OIG include the use of a hotline telephone number, e-mail address, or suggestion box accessible by all employees and agents. The compliance officer should maintain a record of all reports received; this should be incorporated into periodic reports to the board or governing body. Even though confidentiality is recognized by the OIG as a means of promoting prompt and effective reporting, it properly cautions that the identity of a caller may become known and may be revealed in certain circumstances should a government agency investigate the matter.
VII. Disciplinary Action
An effective compliance program should include enforcement of the organization's standards of conduct through written disciplinary criteria. The consistency of enforcement is a key element in ensuring that employees and agents understand the organization's commitment to compliance with the law. In addition, consistent enforcement demonstrates the organization's commitment to government authorities should the organization be investigated by a government agency such as the OIG.
The OIG has opined that disciplinary action is appropriate whenever there is a violation of the hospice's code of conduct. The OIG would include in this definition an employee's failure to detect a violation as a result of his or her negligence or reckless misconduct.
While not technically part of an enforcement mechanism, the OIG has also recommended that a hospice conduct a background check of all prospective employees and independent contractors who may be delegated the authority to make decisions that may involve the hospice's compliance with the law or adherence to the compliance program. Background information would include disclosure by the individual or entity of any criminal offense or administrative sanction by the OIG. Moreover, the OIG has recommended that the hospice bar any individual or entity from involvement in any federally funded health care program if any criminal charges are pending or if an administrative agency is proposing to sanction that individual or entity. In some states, however, employment laws may preclude any actions on pending charges.
VIII. Auditing and Monitoring
A compliance program will not be effective if it remains static. Although the United States Sentencing Guidelines do not touch on this subject, the OIG's guidelines recommend that hospices monitor the success of their compliance programs through periodic (at least annual) audits conducted by internal or external auditors experienced in the application of federal and state laws, regulations, and policies. The draft guidelines suggest various auditing techniques, such as visits and interviews with patients and their families, analysis of service utilization patterns, unannounced mock audits, review of clinical documentation and financial records, and validation of the qualifications of clinical staff. The guidelines, however, do not endorse any particular audit method and do not address the cost of performing such audits. The suggested areas for audit include:
.dissemination of the hospice's standards of conduct and compliance training and education;
.overall staff awareness and effectiveness of the compliance program;
.compliance with anti-kickback and self-referral laws and regulations;
.hospice eligibility;
.marketing practices;
.claim development and submission;
.matters highlighted by past internal audits; and
.special alerts published by the OIG, fiscal intermediaries, or carriers.
Once an audit is complete, the OIG recommends that any overpayments by Medicare, Medicaid, or other federally funded health program that are identified by the auditors be refunded promptly to the appropriate payor regardless of whether or not a demand for repayment has been made. However, since voluntary disclosure cannot be considered a guarantee against further criminal, civil, and administrative actions by government agencies, any contemplated disclosure should be undertaken after careful evaluation with counsel.
In addition to periodic audits, the OIG has also recommended that the hospice document its efforts to comply with the law. For example, when the hospice seeks additional information or clarification from HCFA, a fiscal intermediary, or a carrier, it should retain copies of all relevant correspondence and notes of oral information. These records can be valuable in demonstrating that the hospice has made a good faith effort to obtain accurate information and had a basis for relying on that information.
IX. Responding To Detected Offenses and Developing Corrective Actions
No compliance plan can guarantee that offenses will not occur in the future; therefore, a good plan will establish a mechanism for responding appropriately to offenses discovered as the result of compliance activities. The United States Sentencing Guidelines only direct that the organization take "reasonable steps to respond appropriately to the offense and prevent further similar offenses. . . ." Indeed, the hospice's response to detected offenses is often the litmus test for measuring the effectiveness of a compliance plan. However, the OIG's model is a significant departure from the sentencing guidelines, as it emphasizes voluntary disclosure even while the hospice is developing an appropriate response and remedy to a true violation.
Any response to a detected violation of the law or of the hospice's standards of conduct will ordinarily demand a prompt response and consultation with counsel as necessary. The existence of an overpayment should not be solely determinative of whether or not the conduct should be investigated. The OIG's guidelines take this concept one step further and suggest that when a compliance officer has credible information about a violation of criminal, civil, or administrative law, the appropriate response should include a report to the appropriate government authority within a reasonable time that should not exceed sixty days. These reports should include a discussion of the potential financial impact and should include all relevant evidence. When the compliance officer's investigation is complete, the OIG also recommends that the compliance officer be required to notify the appropriate government agencies of the outcome of the investigation. In return, the OIG has suggested that prompt reporting may be considered as a mitigating factor should sanctions be considered.
While in some cases prompt disclosure may mitigate the hospice's exposure under the False Claims Act, the OIG's recommendation can also be construed as an attempt by the OIG to interject itself into an internal investigation before the hospice knows whether or not the matter is significant. This may have the unintended effect of undercutting the ability of a well-run compliance program to remedy the cause of detected violations through internal responses by chilling future disclosure and cooperation by hospice staff. Even though expedited disclosure to a government agency may be appropriate in some circumstances, these and other decisions relating to disclosure should be determined on an individual basis in consultation with counsel.
Endnote:
1. For example, a hospital-based hospice might develop specialized standards and training to integrate its compliance efforts into the hospital's overall compliance program.