[Federal Register Volume 63, Number 79 (Friday, April 24, 1998)]
[Notices]
[Pages 20415-20417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10907]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of OIG Special Fraud Alert: Fraud and Abuse in
Nursing Home Arrangements With Hospices
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: This Federal Register notice sets forth a recently issued OIG
Special Fraud Alert concerning fraud and abuse practices involving
nursing home arrangements with hospices. For the most part, OIG Special
Fraud Alerts address national trends in health care fraud, including
potential violations of the Medicare anti-kickback statute. This
Special Fraud Alert, issued to the health care provider community and
now being reprinted in this issue of the Federal Register, specifically
identifies and highlights some vulnerabilities in nursing home
arrangements with hospices and instances of potential kickbacks between
nursing homes and hospices to influence the referral of patients.
FOR FURTHER INFORMATION CONTACT: Joel J. Schaer, Office of Counsel to
the Inspector General, (202) 610-0089.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Inspector General (OIG) issues Special Fraud Alerts
based on information it obtains concerning particular fraudulent and
abusive practices within the health care industry. These Special Fraud
Alerts provide the OIG with a means of notifying the industry that we
have become aware of certain abusive practices which we plan to pursue
and prosecute, or bring civil and administrative action, as
appropriate. The Special Fraud Alerts also serve as an effective tool
to encourage industry compliance by giving providers an opportunity to
examine their own practices.
Special Fraud Alerts are intended for extensive distribution to the
health care provider community, as well as those charged with
administering the Medicare and Medicaid programs. To date, the OIG has
published in the Federal Register the texts of 8 previously-issued
Special Fraud Alerts (December 19, 1994, 59 FR 65372; August 10, 1995,
60 FR 40847; and June 17, 1996, 61 FR 30623), and we have indicated our
intention of publishing future Special Fraud Alerts in this same manner
as a regular part of our dissemination of such information.
With regard to nursing home arrangements with hospices, this newly-
issued Special Fraud Alert discusses (1) the nature of hospice care and
who is eligible to receive such care; (2) the reimbursement for hospice
care provided by nursing homes; (3) the vulnerabilities in nursing home
arrangements with hospices; (4) several suspected kickback arrangements
that are designed to induce Medicare or Medicaid referrals. A reprint
of this Special Fraud Alert follows.
II. Special Fraud Alert: Fraud and Abuse in Nursing Home
Arrangements With Hospices (April 1998)
Office of Inspector General was established at the Department of
Health and Human Services by Congress in 1976 to identify and eliminate
fraud, abuse and waste in the Department's programs and to promote
efficiency and economy in departmental operations. The OIG carries out
this mission through a nationwide program of audits, investigations,
and inspections.
To reduce fraud and abuse in the Federal health care programs,
including Medicare and Medicaid, the OIG actively investigates
fraudulent schemes to obtain money from these programs and, when
appropriate, issues Special Fraud Alerts that identify segments of the
health care industry that are particularly vulnerable to abuse. This
Special Fraud Alert focuses on the interrelationship between the
hospice and nursing home industries and describes some potentially
illegal practices the OIG has identified in arrangements between these
providers.
What Is Hospice Care and Who Is Eligible To Receive It?
Medicare's hospice benefit provides palliative care to individuals
who are terminally ill. Palliative care focuses on pain control,
symptom management, and counseling for both the patient and family.
Medicare hospice payments increased from about $958 million for Fiscal
Year 1993 to over $1.8 billion for Fiscal Year 1995. Although the
hospice benefit is still a relatively small portion of total Medicare
Part A expenditures (about 1.5 percent), it has grown considerably over
the past several years.
In order to elect the hospice benefit, a Medicare beneficiary must
be entitled to Medicare Part A services and certified as terminally
ill, which is defined as a medical prognosis of a life expectancy of 6
months or less if the illness runs its normal course. A beneficiary who
elects to enroll in a hospice program waives his or her rights to all
curative care
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related to his or her terminal illness. Medicare will continue to pay
for services furnished by the patient's non-hospice attending physician
and for the treatment of conditions unrelated to the terminal illness.
The hospice must have a written plan of care which covers physician
and nursing services; physical, occupational, and speech therapy;
medical social services; home health aides and homemakers; short-term
inpatient care; counseling; respite care; and medical supplies,
including drugs and biologicals. Certain of the hospice services
(``core services'') must be provided directly to the beneficiary by
employees of the hospice, while other non-core hospice services may be
provided in accordance with contracts with other providers. However,
the hospice must retain professional management for all contracted
services.
Reimbursement for Hospice Care Provided in Nursing Homes
Medicare does not have a separate payment rate for routine hospice
services provided in a nursing home. Because hospice services are
typically provided to patients in their homes, the routine home care
hospice rate does not include any payment for room or board. For
services provided to patients in nursing homes, hospices receive the
Medicare routine home care rate, which is a fixed amount per day for
the services provided by the hospice, regardless of the volume or
intensity of the services provided. Accordingly, where the hospice
patient resides in a nursing home, the patient remains responsible for
payment of the nursing home's room and board charges.
If, however, a patient receiving Medicare hospice benefits in a
nursing home is also eligible for Medicaid, Medicaid will pay the
hospice at least 95 percent of the State's daily nursing home rate, and
the hospice is then responsible for paying the nursing home for the
beneficiary's room and board. The specific services included in the
daily rate payment are determined by a State's Medicaid program and may
vary from State to State.
In addition to the room and board payment, a hospice may contract
with the nursing home for the nursing home to provide non-core hospice
services (i.e., those services which the hospice is not required by law
to provide itself) to its hospice patients.
Vulnerabilities in Nursing Home Arrangements With Hospices
Hospice services may be appropriate and beneficial to terminally
ill nursing home residents who wish to receive palliative care.
However, arrangements between nursing homes and hospices are vulnerable
to fraud and abuse because nursing home operators have control over the
specific hospice or hospices they will permit to provide hospice
services to their residents. An exclusive or semi-exclusive arrangement
with a nursing home to provide hospice services to its residents may
have substantial monetary value to a hospice. In these circumstances,
some nursing home operators and/or hospices may request or offer
illegal remuneration to influence a nursing home's decision to do
business with a particular hospice.
Hospice patients residing in nursing homes may be particularly
desirable from a hospice's financial standpoint. First, a nursing
home's population represents a sizeable pool of potential hospice
patients. Second, nursing home hospice patients may generate higher
gross revenues per patient than patients residing in their own homes
because nursing home residents receiving hospice care have, on average,
longer lengths of stay than hospice patients in their homes. Also,
there may be some overlap in the services that the nursing homes and
hospices provide, thereby providing one or the other the opportunity to
reduce services and costs. A recent OIG report found that residents of
certain nursing homes receive fewer services from their hospice than
patients in their own homes. Since hospices receive a fixed daily
payment regardless of the number of services provided or the location
of the patient, fewer services may result in higher profits per
patient.
However, a hospice's access to nursing home patients depends on the
nursing home operator. Nursing home operators may restrict residents to
one or two hospice providers. While an exclusive or semi-exclusive
arrangement can promote efficiency and safety by permitting the nursing
home operator to coordinate care, screen hospice caregivers, and
maintain control of the premises, it also enhances the value of the
nursing home operator's decision. In these circumstances, some nursing
home operators or hospices may request or offer illegal inducements to
influence the selection of a hospice.
Paying or Receiving Kickbacks in Order to Induce Medicare or Medicaid
Referrals
Because kickbacks can distort medical decision making, result in
overutilization, and have an adverse effect on the quality of care
patients receive, they are prohibited under the Federal health care
programs, including Medicare and Medicaid. Under the anti-kickback
statute, it is illegal to knowingly and willfully solicit, receive,
offer, or pay anything of value to induce referrals of items or
services payable by a Federal health care program.
The OIG has observed instances of potential kickbacks between
hospices and nursing homes to influence the referral of patients. In
general, payments by a hospice to a nursing home for ``room and board''
provided to a Medicaid hospice patient should not exceed what the
nursing home otherwise would have received if the patient had not been
enrolled in hospice. Any additional payment must represent the fair
market value of additional services actually provided to that patient
that are not included in the Medicaid daily rate.
Specific practices which are suspected kickbacks include:
A hospice offering free goods or goods at below fair
market value to induce a nursing home to refer patients to the hospice.
A hospice paying ``room and board'' payments to the
nursing home in amounts in excess of what the nursing home would have
received directly from Medicaid had the patient not been enrolled in
hospice.
A hospice paying amounts to the nursing home for
``additional'' services that Medicaid considers to be included in its
room and board payment to the hospice.
A hospice paying above fair market value for
``additional'' non-core services which Medicaid does not consider to be
included in its room and board payment to the nursing home.
A hospice referring its patients to a nursing home to
induce the nursing home to refer its patients to the hospice.
A hospice providing free (or below fair market value) care
to nursing home patients, for whom the nursing home is receiving
Medicare payment under the skilled nursing facility benefit, with the
expectation that after the patient exhausts the skilled nursing
facility benefit, the patient will receive hospice services from that
hospice.
A hospice providing staff at its expense to the nursing
home to perform duties that otherwise would be performed by the nursing
home.
Parties that violate the anti-kickback statute may be criminally
prosecuted or subject to civil monetary penalties, and also may be
subject to exclusion from the Federal health care programs.
What To Do if You Suspect Fraud Involving Arrangements Between Nursing
Homes and Hospices
If you have information about nursing homes and hospices engaging
in any of
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the activities described above, contact any of the regional offices of
the Office of Investigations of the Office of Inspector General, U.S.
Department of Health and Human Services, at the following locations:
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Field offices States served Telephone
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Boston........................ MA, VT, NH, ME, RI, 617-565-2660
CT.
New York...................... NY, NJ, PR, VI....... 212-264-1691
Philadelphia.................. PA, MD, DE, WV, VA, 215-861-4586
DC.
Atlanta....................... GA, KY, NC, SC, FL, 404-562-7603
TN, AL, MS.
Chicago....................... IL, MN, WI, MI, IN, 312-353-2740
OH, IA, MO.
Dallas........................ TX, NM, OK, AR, LA, 214-767-8406
CO, UT, WY, MT, ND,
SD, NE, KS.
Los Angeles................... AZ, NV, So. CA....... 714-246-8302
San Francisco................. No. CA, AK, HI, OR, 415-437-7960
ID, WA.
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To Report Suspected Fraud, Call or Write
1-800-HHS-TIPS (1-800-447-8477), Department of Health and Human
Services, Office of Inspector General, P.O. Box 23489, L'Enfant Plaza
Station, Washington, D.C. 20026-3489.
Dated: April 15, 1998.
June Gibbs Brown,
Inspector General.
[FR Doc. 98-10907 Filed 4-23-98; 8:45 am]
BILLING CODE 4150-04-P