[Federal Register Volume 60, Number 212 (Thursday, November 2, 1995)]
[Notices]
[Pages 55720-55722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27217]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General


Publication of the Medicare Advisory Bulletin on Hospice Benefits

AGENCY: Office of Inspector General, HHS.

ACTION: Notice.

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SUMMARY: This Federal Register notice sets forth a recently issued 
Advisory Bulletin, in conjunction with Operation Restore Trust, that 
identifies important eligibility and other information involving the 
current Medicare hospice benefit. This Advisory Bulletin has been made 
available to consumers, health care professionals and health care 
associations, and is now being reprinted in this issue of the Federal 
Register as a means of ensuring public awareness of the purposes of 
hospice care and the consequences of electing the Medicare hospice 
benefit.

FOR FURTHER INFORMATION CONTACT: Joel J. Schaer, Office of Management 
and Policy, (202) 619-0089.

SUPPLEMENTARY INFORMATION: This Medicare Advisory Bulletin is part of 
Operation Restore Trust--a joint effort among the Office of Inspector 
General (OIG), the Health Care Financing Administration (HCFA) and the 
Administration on Aging within the Department of Health and Human 
Services to combat fraud, waste and abuse in the Medicare and Medicaid 
programs. The purpose of this Advisory Bulletin is to inform consumers 
and health care professionals about certain questionable practices 
affecting Medicare's hospice program. The issuance calls specific 
attention to the possible misuse of the hospice benefit, as uncovered 
through collaborative work undertaken by the OIG and HCFA.
    Specifically, the Advisory Bulletin highlights several practices 
which indicate that some hospice providers may have inappropriately 
maximized their Medicare reimbursements at beneficiary expense. These 
practices include:
     Making incorrect determinations of a person's life 
expectancy for purposes of meeting hospice eligibility criteria;
     Engaging in marketing and sales strategies that offer 
incomplete or inadequate information about Medicare entitlement under 
the hospice program to induce beneficiaries to elect hospice and 
thereby waive aggressive treatment options that Medicare would 
otherwise cover; and
     Encouraging hospice beneficiaries to temporarily revoke 
their election of hospice during a period when costly services covered 
by a plan of care are needed in order for the hospice to avoid the 
obligation to pay for such services.
    A reprint of this Medicare Advisory Bulletin follows.

Medicare Advisory Bulletin--Questionable Practices Affecting the 
Hospice Benefit October 1995

    The Department of Health and Human Services administers the 
Medicare program for the benefit of 38 million elderly and disabled 
Americans. In May 1995, the Secretary of Health and Human Services 
announced Operation Restore Trust, a joint project of the Office of 
Inspector General, the Health Care Financing Administration and the 
Administration on Aging. Among its objectives, Operation Restore Trust 
seeks to identify vulnerabilities in the Medicare program, and pursue 
ways to reduce Medicare's exposure to fraud, waste and abuse.
    This Advisory Bulletin is a product of Operation Restore Trust. The 
bulletin describes some potentially abusive practices which have been 
identified through examination of the Medicare hospice benefit.

What Is Medicare's Hospice Program?

    The goal of hospice care is to help terminally ill patients 
continue with their normal activities of daily living as comfortably as 
possible, while remaining primarily in a home environment. To achieve 
this goal, the Medicare program shifts the focus of medical attention 
from curative treatment seeking to reverse an underlying disease or 
condition to palliative or supportive care, including a wide range of 
medical, social, and emotional supportive services.
    To be eligible for hospice services under Medicare, an individual 
must be certified as terminally ill by hospice medical staff and the 
individual's attending physician if he or she has one. Terminal illness 
is defined as a medical prognosis that the patient's life expectancy is 
6 months or less if the terminal illness runs its normal course. The 
Medicare beneficiary's inclusion in a hospice program is voluntary and 
can be revoked by the beneficiary at any time.
    The decision to elect the hospice benefit has significant 
consequences because the beneficiary waives the right to receive 
standard Medicare benefits, related to the terminal illness, including 
all treatment for the purposes of curing a terminal illness. Hospice 
coverage is divided into four discrete election periods, during each of 
which the beneficiary must be certified as terminally ill. The fourth 
and last election period has an indefinite duration, unless or until 
the beneficiary no longer meets the eligibility requirement of a 
prognosis of 6 months or less to live.

What Problems Have Been Identified?

    In the course of reviewing trends in Medicare's hospice program, 
the Office of Inspector General has learned of activities that should 
be of concern to beneficiaries who are in hospice or who are 
considering the option of hospice. These questionable practices 
primarily involve issues of hospice enrollment and are the subject of 
ongoing analysis by the Medicare program and, in appropriate cases, 
investigations and audits by the Office of Inspector General. Some 
hospice providers, in efforts to maximize their Medicare reimbursement, 
may knowingly engage in one or more of the following activities:
     Making incorrect determinations of a person's life 
expectancy, for the purposes of meeting hospice eligibility criteria.
     Engaging in marketing/sales strategies that offer 
incomplete or inadequate information about Medicare entitlement and 
restrictions under the hospice program, in order to induce 
beneficiaries to elect hospice and thereby waive other treatment 
benefits.
     Encouraging hospice beneficiaries or their representatives 
to temporarily revoke their election of hospice during a period when 
costly services covered by the hospice plan of care are needed, so that 
the hospice may avoid the obligation to pay for these services.

Important Features of the Medicare Hospice Benefit

     The hospice benefit is restricted to patients with a 
diagnosis of terminal illness and prognosis of 6 months or less to 
live.
    In several recent medical reviews of beneficiary eligibility for 
hospice, the Office of Inspector General has found significant 
inaccuracies in the determinations of terminal illness. These findings 
have prompted a concern that some hospices may intentionally 
misrepresent a condition as terminal in order to secure Medicare 
reimbursement. For instance, investigators have encountered hospices 
that asked nurse employees to alter notes in patients' records or to 
otherwise misrepresent patients' medical conditions, in order to 
falsify the existence of a terminal condition.
    There have also been cases where physician certifications of 
terminal illness have been medically questionable. If a hospice submits 
claims to Medicare under circumstances 

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where it knows of the absence of a terminal condition, the hospice may 
be liable for the submission of false claims. Criminal penalties can 
also be imposed against persons who knowingly and willfully make false 
representations about a patient's medical condition which are used to 
determine eligibility for payment of Medicare or Medicaid benefits.
     A hospice should not refuse to address health care needs 
relating to a beneficiary's terminal diagnosis.
    Once a Medicare beneficiary elects hospice care, the hospice is 
responsible for furnishing directly, or arranging for, all supplies and 
services that relate to the beneficiary's terminal condition, except 
the services of an attending physician. Hospice beneficiaries have the 
right to receive covered medical, social and emotional support services 
from the hospice directly, or through arrangements made by the hospice, 
and should not be forced to seek or pay for such care from non-hospice 
providers.
    When a beneficiary is receiving hospice care, the hospice is paid a 
predetermined fee for each day during the length of care, no matter how 
much care the hospice actually provides. This means that a hospice may 
have a financial incentive to reduce the number of services provided to 
each patient, since the hospice will get paid the same amount 
regardless of the number of services provided.
    Medicare has received complaints about hospices neglecting patient 
needs and ignoring reasonable requests for treatment. One individual 
reported that his wife's hospice failed on three separate occasions to 
respond to telephonic requests for emergency services. He was forced to 
call a non-hospice physician who arranged for hospitalization. His 
wife's care required a 26-day length of stay. Although the hospital 
contacted the hospice the day following admission, the hospice did not 
visit the patient or in any way coordinate her care during the hospital 
stay.
    The Office of Inspector General also has uncovered situations where 
duplicate claims were submitted by a hospice and other providers (such 
as skilled nursing homes and hospitals) for services related to the 
beneficiary's terminal illness. In a nationwide audit of services 
provided to Medicare beneficiaries enrolled in hospice programs, 
approximately $21.6 million was improperly paid to hospitals and 
nursing homes for the treatment of hospice beneficiaries. Hospices are 
required to make financial arrangements for hospitalization, nursing 
services and all other health care needs related to the beneficiary's 
terminal illness and included in the hospice plan of care. The cost of 
these services should be paid by the hospices.
     A beneficiary has a right to expect a hospice to provide 
complete and accurate information about the consequences of hospice 
election and revocation.
    A hospice is obligated to inform beneficiaries or their 
representatives that by electing the hospice benefit, they waive all 
rights to curative treatment or other standard Medicare benefits 
related to the terminal illness, except for the services of an 
attending physician. Some hospices inappropriately induce beneficiaries 
or their representatives to enroll in the hospice program without 
explaining that hospice election results in forfeiture of curative 
treatment benefits under Medicare. For instance, some hospices have 
solicited the beneficiary's neighbors and friends, who in some 
jurisdictions may act as beneficiary representatives, and who may not 
be familiar with the beneficiary's medical condition. In these 
situations, the beneficiary and/or representative may not appreciate 
that traditional Medicare benefits will be denied once the hospice 
benefit is elected.
    The Office of Inspector General also has learned of hospices which 
induce beneficiaries to revoke the hospice election if expensive 
palliative treatment, even for a temporary period, becomes necessary. 
As a consequence, beneficiaries may then be burdened with substantial 
co-payments that would not be charged under hospice. It is especially 
important to note that when a beneficiary revokes the hospice election 
during the last election period, re-enrollment in the Medicare hospice 
benefit will be precluded permanently.

You Should Be Alert to the Following Questionable Activities

     Hospice recruiters failing to notify prospective patients 
or their representatives that they will no longer be entitled to 
Medicare coverage of curative treatment if they elect the hospice 
benefit.
     Hospice personnel inducing beneficiaries to revoke their 
hospice election when more costly treatment is needed.
     A hospice refusing or failing to provide or arrange for 
needed care;
     Nursing home residents being induced to elect hospice but 
not receiving the additional benefits of hospice care;
     Non-hospice providers charging Medicare for services to 
hospice patients that hospices can and should provide, such as 
counseling or medical equipment.

What To Do With Information About Questionable Practices Involving 
Hospice

    If you have questions about the scope of the hospice benefit or the 
care you are receiving in hospice, you should first consider discussing 
these matters with your attending physician or the hospice provider. If 
you wish to report questionable practices, call or write: 1-800-HHS-
TIPS, Department of Health and Human Services, Office of Inspector 
General, P.O. Box 23489, L'Enfant Plaza Station, Washington, D.C. 
20026-3489.

    Dated: October 23, 1995.
June Gibbs Brown,
Inspector General.
[FR Doc. 95-27217 Filed 11-1-95; 8:45 am]
BILLING CODE 4150-04-P