The OIG announced a new focused audit that will be conducted in FY 2023. The audit focuses on beneficiary eligibility for hospice services in the absence of a recent hospital encounter. How will your organization respond to this news?

Both the Centers for Medicare and Medicaid Services (CMS) and the Health and Human Services Office of Inspector General (OIG) are charged with preventing fraud and abuse related to federal healthcare spending. Audits and focused reviews are two of the tools used to identify instances of fraud and abuse and educate providers with a goal of minimizing further fraud and abuse in the future. Hospice industry leaders routinely find themselves responding to new or changing regulatory oversight.

The OIG announced a new focused audit that will be conducted in FY 2023. The audit focuses on beneficiary eligibility for hospice services in the absence of a recent hospital encounter. Questions about the audit abound and there are as many different responses to this news as there are different hospice organizations.

How will your organization respond to this news? Let’s explore how to respond to the new audit through the eyes of one CEO.

Michah’s Story Begins:

It is January 2022, and hospice agencies are still struggling to provide care in the midst of a pandemic. Everyone is doing the best they can with ever-shrinking resources. Michah, the CEO of a mid-size hospice, is reviewing hospice industry news update emails when he comes across the following announcement.

OIG Nationwide Review of Hospice Beneficiary Eligibility

nationwide hospice review of eligibility

Michah reads further and learns that the Health and Human Services Office of Inspector General (OIG), is acting in response to compliance audits performed by the Office of Audit Services (OAS), which showed negative findings related to beneficiary eligibility. The OIG’s response is a nationwide review of hospice eligibility, focusing on patients admitted to hospice who have not had an inpatient or outpatient hospital encounter in “certain periods” prior to their hospice admission.

A Hospice CEO’s First Reactions

Michah is stunned! First, Michah works his way through the many three-letter abbreviations, ensuring he understands the players involved. These are Michah’s top concerns:

  • Does “Nationwide audit” mean every admission who didn’t come from a hospital or emergency department?

  • What does “Certain periods” mean? Does it mean within the prior month, year, two years?

  • How will this affect my census? How will this affect my organization’s strained cash flow?

  • I don’t have the resources to handle this now!

  • Why is the OIG doing this?


Why Did the OIG Pick this Topic?

Michah should take a deep breath and think through the focus of the audit. The OIG does not conduct random audits; there is a purpose behind each item on their work plan. Here are some facts that may explain why this item was added to their work plan:

  • Overall, the top Additional Determination Request (ADR) denial reason is lack of documentation to support a prognosis of 6 months or less.

  • OAS hospice audits also show issues with eligibility.

  • Financial reasons:

    • Medicare spends 72.10% of their payments for patients with a length of stay greater than 180 days.
    • In 2018, that amounted to just over 13.8 billion Medicare dollars.


Michah’s Gut Response to Mitigate Risk

Michah’s initial reaction is to slow admissions for patients who are not coming from the hospital, the type of patients which are the focus of the audit. The intake team will be instructed to gather data from other medical providers and present it to the hospice medical director for her review prior to scheduling an admission.

Michah is confident this approach will mitigate any risk.

A More Measured Response, by the Numbers

Michah’s gut response is not going to be helpful to his agency. Instead, Michah needs to understand his agency’s risk. This requires a close look at the agency’s data.

  • Average daily census: 52

  • Approximate number of admissions per year: 600

  • Michah’s data: Hospice Item Set Data A180, Place of care prior to hospice

    • 30% inpatient hospital = 180 patients
    • 12% outpatient hospital = 72 patients
    • 58% of admission at risk = 348 patients

Michah now knows he has 348 patient admissions at risk for the OIG eligibility audit. The intake team data shows that it takes an average of 72 hours for referral information to be received once it is requested. Michah uses this data to evaluate the impact of his initial plan.

  • Admission delayed by 3 days for 348 patients means:

    • 1044 fewer patient days for the year
    • Reimbursement rate in Michah’s county for Routine Home Care Days 1-60 = $188
    • Potential lost revenue of $196,272
  • Impact to the agency when process changes were put into place to respond quickly to referral sources:

    • 5% increase in admissions = 30 patients
    • Average length of stay increased by 2 days = a $376 increase in reimbursement per patient
    • Preferred provider for the biggest health system in the area


What Else Should Michah Consider?

Michah met with the agency’s performance improvement team to discuss the upcoming OIG audit. The team decided they needed to review and document the following data points prior to coming up with a plan to address their risks:

  • The agency’s audit history

    • No Targeted Probe and Educate audits 
    • 6-9 ADRs per year, with a successful appeal rate of 85% 
    • No history of other regulatory oversight, such as prepayment reviews, corporate integrity agreements, etc. 
  • A quality improvement project focusing on Certificate of Terminal Illness, which showed a 20% improvement in the number of records for which the Certificate of Terminal Illness was complete, accurate, meet CMS requirements and supported hospice eligibility. They noted this is an on-going improvement project.

  • 60% of their admissions are patients with Circulatory/Heart Disease, Respiratory Disease, and Dementia. This category of patients tends to have longer lengths of stay and can be more difficult to document eligibility.


For more about documentation, check out our Successful Documentation series. 

Preparing Together for Increased Oversight of Eligibility Documentation

Michah and the team worked together to begin outlining a plan to prepare the agency for increased oversight of eligibility documentation. The used these important points as a starting point for their planning.

  • Know your agency’s data and how you compare to national trends.

  • Know your agency’s risks.

  • Respond to your agency’s data, not your gut reaction!


An Opportunity for Immediate and Ongoing Improvement

Michah has a solid plan for success for his hospice agency. Michah knows October 1, 2022, will be here before he knows it—and that he and his team will be ready. They decide to:

  • Audit 100% of admissions not coming from the hospital (inpatient or outpatient) for two months. (approximately 60 charts).

  • Evaluate the strength of the documentation related to eligibility, including: 

    • Initial assessment 
    • Certificate of Terminal Illness documentation, including the narrative 
    • Presence and strength of supporting documentation received from the community providers 
  • Analyze data for strengths as well as opportunities for improvement. 

  • Use the agency’s quality improvement process (Plan-Do-Study-Act) to drive the improvement process. 

  • Connect regularly with industry thought leaders to share best practices and learn new techniques for staying compliant.


Are You Prepared?

Have you taken any steps to prepare for the OIG eligibility review? Any steps beyond an initial panicked response?

Rest assured you are not alone. There is still time to respond with positive action. Gather your data, then build a plan that addresses your organization’s risks. Use your organization’s performance improvement process to strengthen your organization where needed. Consider Michah’s response and utilize the aspects that work for you!

If you want to learn more, check out our webinar, Prepping for Pending Audits: Hospice Eligibility in 2023. We’ll cover what you need to know about the audit, best practices to prepare, and industry tools that can help support your eligibility process.

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