[Federal Register Volume 64, Number 192 (Tuesday, October 5, 1999)]
[Notices]
[Pages 54031-54049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25787]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of the OIG Compliance Program, Guidance for Hospices
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: This Federal Register notice sets forth the recently issued
Compliance Program Guidance for Hospices developed by the Office of
Inspector General (OIG). The OIG has previously developed and published
compliance program guidance focused on several other areas and aspects
of the health care industry. We believe that the development and
issuance of this compliance program guidance for hospices will continue
to serve as a positive step toward promoting a higher level of ethical
and lawful conduct throughout the entire health care industry.
FOR FURTHER INFORMATION CONTACT: Michael Shaw, Office of Counsel to the
Inspector General, (202) 619-2078.
SUPPLEMENTARY INFORMATION:
Background
The creation of compliance program guidance remains a major
initiative by the OIG in its efforts to engage the health care
community in combating fraud and abuse. In formulating compliance
guidance, the OIG has worked closely with the Health Care Financing
Administration (HCFA), the Department of Justice (DOJ) and various
sectors of the health care industry to provide clear guidance to those
segments of the industry that are interested in reducing fraud and
abuse within their organizations. The five previously-issued compliance
program guidances were focused on the hospital industry; home health
agencies; clinical laboratories; third-party medical billing companies;
and the durable medical equipment, prosthetics, orthotics and supply
industry. The development of these types of compliance program guidance
is based on our belief that a health care provider can use internal
controls to more efficiently monitor adherence to applicable statutes,
regulations and program requirements.
Guidance for the Hospice Industry
On January 13, 1999, the OIG published a solicitation notice (64 FR
2228) seeking information and recommendations for developing guidance
for the hospice industry. In response to that solicitation notice, the
OIG received numerous comments from various parts of the industry and
from their representatives. After careful consideration of those
initial comments, and in an effort to ensure that all parties had a
reasonable opportunity to provide input into a final product, the OIG
published draft guidance for the hospice industry on July 21, 1999 (64
FR 39150) for further comment and recommendations.
Elements for an Effective Compliance Program
Through experience, the OIG has identified seven fundamental
elements
[[Page 54032]]
to an effective compliance program. They are:
implementing written policies, procedures and standards of
conduct;
designating a compliance officer and compliance committee;
conducting effective training and education;
developing effective lines of communication;
enforcing standards through well-publicized disciplinary
guidelines;
conducting internal monitoring and auditing; and
responding promptly to detected offenses and developing
corrective action.
Through application of these seven basic elements, the OIG is
offering specific compliance measures that may be implemented in
hospice industry operations in an effort to curtail or eliminate fraud
and abuse. As with previously-issued OIG compliance guidances, adoption
of the Compliance Program Guidance for Hospices set forth below will be
strictly voluntary.
A reprint of this newly-issued compliance program guidance follows:
Office of Inspector General's Compliance Program Guidance for
Hospices (September 1999)
I. Introduction
The Office of Inspector General (OIG) of the Department of Health
and Human Services (HHS) continues to promote voluntarily developed and
implemented compliance programs for the health care industry. The
following compliance program guidance is intended to assist hospices
1 and their agents and subproviders (referred to
collectively in this document as ``hospices'') develop effective
internal controls that promote adherence to applicable Federal and
State law, and the program requirements of Federal, State, and private
health plans. The adoption and implementation of voluntary compliance
programs significantly advance the prevention of fraud, abuse and waste
in these health care plans while at the same time further the
fundamental mission of all hospices, which is to provide palliative
care 2 to patients.
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\1\ The term ``hospice'' is applied in this document as the term
``hospice program'' is defined in 42 U.S.C. 1395x(dd).
\2\ Palliative care is an intensive program of care that focuses
on the relief of pain and suffering associated with a terminal
illness. Through this emphasis on palliative rather than curative
services, individuals have a choice whenever conventional approaches
for medical treatment may no longer be appropriate. Hospice
addresses the needs of terminally ill individuals by including the
patient and family, specially trained volunteers, caregivers from
the community, and representatives from medicine, nursing, social
work and spiritual counseling in the caregiving team.
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Within this document, the OIG first provides its general views on
the value and fundamental principles of hospice compliance programs,
and then provides the specific elements that each hospice should
consider when developing and implementing an effective compliance
program. While this document presents basic procedural and structural
guidance for designing a compliance program, it is not in itself a
compliance program. Rather, it is a set of guidelines to be considered
by a hospice interested in implementing a compliance program.
The OIG recognizes the size-differential that exists between
operations of the different hospices and organizations that compose the
hospice industry. Appropriately, this guidance is pertinent for all
hospices, whether for-profit, non-profit, provider-based, independent,
community-based, volunteer-based, large, small, urban or rural. The
applicability of the recommendations and guidelines provided in this
document depends on the circumstances of each particular hospice.
However, regardless of a hospice's size and structure, the OIG believes
that every hospice can and should strive to accomplish the objectives
and principles underlying all of the compliance policies and procedures
recommended within this guidance.
Fundamentally, compliance efforts are designed to establish a
culture within a hospice that promotes prevention, detection, and
resolution of instances of conduct that do not conform to Federal and
State law, and Federal, State and private payor health care program
requirements, as well as the hospice's business policies. In practice,
the compliance program should effectively articulate and demonstrate
the organization's commitment to ethical conduct. Compliance programs
guide a hospice's governing body (e.g., board of directors or
trustees), chief executive officer (CEO), managers, physicians,
clinicians, billing personnel, and other employees in the efficient
management and operation of a hospice. Eventually, a compliance program
should become part of the fabric of routine hospice operations.
It is incumbent upon a hospice's corporate officers and managers to
provide ethical leadership to the organization and to assure that
adequate systems are in place to facilitate ethical and legal conduct.
Employees, managers and the Government will focus on the words and
actions of a hospice's leadership as a measure of the organization's
commitment to compliance. Indeed, many hospices have adopted mission
statements articulating their commitment to high ethical standards. A
formal compliance program, as an additional element in this process,
offers a hospice a further concrete method that may improve the
appropriateness and quality of care and reduce waste. Compliance
programs also provide a central coordinating mechanism for furnishing
and disseminating information and guidance on applicable Federal and
State statutes, regulations and other requirements.
Implementing an effective compliance program requires a substantial
commitment of time, energy and resources by senior management and the
hospice's governing body.3 Superficial programs that simply
purport to comply with the elements discussed and described in this
guidance or programs that are hastily constructed and implemented
without appropriate ongoing monitoring will likely be ineffective and
could expose the hospice to greater liability than no program at all.
While it may require significant additional resources or reallocation
of existing resources to implement an effective compliance program, the
OIG believes that the long term benefits of implementing the program
outweigh the costs.4
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\3\ Recent case law suggests that the failure of a corporate
director to attempt in good faith to institute a compliance program
in certain situations may be a breach of a director's fiduciary
obligation. See, e.g., In re Caremark International Inc. Derivative
Litigation, 698 A.2d 959 (Ct. Chanc. Del. 1996).
\4\ The conclusion of a recent report by the United States
General Accounting Office (GAO) to Congress stated that ``despite
the investment of time and resources that compliance programs
entail, many hospitals believe the benefits of these programs . . .
outweigh their costs . . . and providers themselves believe that
complance programs can reduce improper Mecicare payments.'' See GAO
report GAO/HEHS-99-59 (April 1999).
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A. Benefits of Compliance Plan
The OIG believes an effective compliance program provides a
mechanism that brings the public and private sectors together to reach
mutual goals of reducing fraud and abuse, strengthening operational
quality, improving the quality of health care services and reducing the
cost of health care. Attaining these goals provides positive results to
hospices, the Government, and individual citizens alike. In addition to
fulfilling its legal duty to ensure that it is not submitting false or
inaccurate claims to Government and private payors, a hospice may gain
numerous additional
[[Page 54033]]
benefits by voluntarily implementing an effective compliance program.
These benefits may include the ability to:
formulate effective controls to assure compliance with
Federal and State statutes, rules and regulations, and Federal, State
and private payor health care program requirements and internal
guidelines;
concretely demonstrate to employees and the community at
large the hospice's strong commitment to honest and responsible
provider and corporate conduct;
identify and prevent illegal and unethical conduct;
improve internal communication;
more quickly and accurately react to employees'
operational compliance concerns and target resources to address those
concerns;
improve the quality, efficiency, and consistency of
patient care;
create a centralized source for distributing information
on health care statutes, regulations, and other program directives
regarding fraud, waste and abuse, and related issues;
formulate a methodology that encourages employees to
report potential problems;
develop procedures that allow the prompt, thorough
investigation of alleged misconduct by corporate officers, managers,
employees, independent contractors, consultants, volunteers,
physicians, nurses and other health care professionals;
initiate immediate, appropriate, and decisive corrective
action; and
minimize, through early detection and reporting, the loss
to the Government from false claims, and thereby reduce the hospice's
exposure to civil damages and penalties, criminal sanctions and
administrative remedies, such as program exclusion.5
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\5\ The OIG, for example, will consider the existence of an
effective compliance program that pre-dated any governmental
investigation when addressing the appropriateness of administrative
sanctions. See 62 FR 67392 (December 24, 1997). The burden is on the
provider to demonstrate the operational effectiveness of a
compliance program. Further, the False Claims Act, 31 U.S.C. 3729-
3733, provides that a person who has violated the Act, but who
voluntarily discloses the violation to the Government, in certain
circumstances will be subject to not less than double, as opposed to
treble, damages. See 31 U.S.C. 3729(a).
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Overall, the OIG believes that an effective compliance program is a
sound investment on the part of a hospice.
The OIG recognizes that the implementation of a compliance program
may not entirely eliminate fraud, abuse and waste from the hospice
system. However, a sincere effort by hospices to comply with applicable
Federal and State standards, as well as the requirements of private
health care programs, through the establishment of an effective
compliance program, significantly reduces the risk of unlawful or
improper conduct.
B. Application of Compliance Program Guidance
Given the diversity within the industry, there is no single
``best'' hospice compliance program. The OIG understands the variances
and complexities within the hospice industry and is sensitive to the
differences among large national and regional multi-hospice
organizations, small independent hospices and other types of hospice
organizations and systems. However, elements of this guidance can be
used by all hospices, regardless of size, location, or corporate
structure, to establish an effective compliance program. Similarly, a
hospital or corporation that owns a hospice or provides hospice
services may incorporate these elements into its system-wide compliance
or managerial structure. We recognize that some hospices may not be
able to adopt certain elements to the same comprehensive degree that
others with more extensive resources may achieve. This guidance
represents the OIG's suggestions on how a hospice can best establish
internal controls and monitoring to correct and prevent fraudulent
activities. By no means should the contents of this guidance be viewed
as an exclusive discussion of the advisable elements of a compliance
program. On the contrary, the OIG strongly encourages a hospice to
develop and implement compliance elements that uniquely address its own
particular risk areas.
The OIG believes that input and support by the individuals and
organizations that will use the tools set forth in this document are
critical to the development and success of this compliance program
guidance. In a continuing effort to collaborate closely with the
private sector, the OIG placed a notice in the Federal Register
soliciting recommendations and suggestions on what should be included
in this Compliance Program Guidance, and then published draft
Compliance Program Guidance for Hospices in the Federal Register for
public comment.6 Further, we took into consideration
previous OIG publications, such as Special Fraud Alerts, the recent
findings and recommendations in reports issued by OIG's Office of Audit
Services and Office of Evaluation and Inspections, as well as the
experience of past and recent fraud investigations related to hospices
conducted by OIG's Office of Investigations and the Department of
Justice. As appropriate, this guidance may be modified and expanded as
more information and knowledge is obtained by the OIG, and as changes
in the law, rules, policies and procedures of the Federal, State and
private health plans occur.
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\6\ See 64 FR 2228 (January 13, 1999), Notice for Solicitation
of Information and Recommendations for Developing OIG Compliance
Program Guidance for the Hospice Industry; 64 FR 39150 (July 21,
1999), Draft Compliance Program Guidance for Hospices.
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The OIG recognizes that the development and implementation of
compliance programs in hospices often raise sensitive and complex legal
and managerial issues.7 However, the OIG wishes to offer
what it believes is critical guidance for providers who are sincerely
attempting to comply with the relevant health care statutes and
regulations.
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\7\ Nothing stated within this document should be substituted
for, or used in lieu of, competent legal advice from counsel.
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II. Compliance Program Elements
The elements proposed by these guidelines are similar to those of
other compliance program guidances 8 and the OIG's corporate
integrity agreements.9 The elements represent a guide that
can be tailored to fit the needs and financial realities of a
particular hospice. The OIG is cognizant that, with regard to
compliance programs, one model is not suitable to every hospice.
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\8\ See 63 FR 70138 (December 18, 1998) for the Compliance
Program Guidance for Third Party Medical Billing Companies; 63 FR
42410 (August 7, 1998) for the Compliance Program Guidance for Home
Health Agencies; 63 FR 45076 (August 24, 1998) for the Compliance
Program Guidance for Clinical Laboratories, as revised; 63 FR 8987
(1998) for the Compliance Program Guidance for Hospitals. These
documents are also located on the Internet at http://www.dhhs.gov/
progorg/oig.
\9\ Corporate integrity agreements are executed as part of a
civil settlement between the health care provider and the Government
to resolve a case based on allegations of health care fraud or
abuse. These OIG-imposed programs are in effect for a period of
three to five years and require many of the elements included in
this compliance program guidance.
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The OIG believes that every effective compliance program must begin
with a formal commitment 10 by the hospice's governing body
to include all of the applicable elements listed below. These elements
are based on the seven steps of the Federal Sentencing
Guidelines.11
[[Page 54034]]
Further, we believe that every hospice can implement most of our
recommended elements that expand upon these seven steps. We recognize
that full implementation of all elements may not be immediately
feasible for all hospices. However, as a first step, a good faith and
meaningful commitment on the part of the hospice administration,
especially the governing body and the CEO, will substantially
contribute to a program's successful implementation. As the compliance
program is implemented, that commitment should cascade down through the
management of the hospice to every employee at all levels in the
organization.
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\10\ E.g., a resolution by the board of directors, owner(s) or
president, where applicable, and the allocation of adequate
resources to ensure that each of the elements is addressed.
\11\ See United States Sentencing Commission Guidelines,
Guidelines Manual, 8A1.2, Application Note 3(k). The Federal
Sentencing Guidelines are detailed policies and practices for the
Federal criminal justice system that prescribe the appropriate
sanctions for offenders convicted of Federal crimes.
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At a minimum, comprehensive compliance programs should include the
following seven elements:
(1) The development and distribution of written standards of
conduct, as well as written policies and procedures, which promote the
hospice's commitment to compliance and address specific areas of
potential fraud, such as assessment of Medicare eligibility, quality
assurance and financial relationships with nursing facilities and other
health care professionals and entities;
(2) The designation of a compliance officer and other appropriate
bodies, e.g., a corporate compliance committee, charged with the
responsibility for operating and monitoring the compliance program, and
who report directly to the CEO and the governing body;12
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\12\ The integral functions of a compliance officer and a
corporate compliance committee in implementing an effective
compliance program are discussed throughout this compliance program
guidance. However, the OIG recognizes that a hospice may tailor the
structure of those positions in consideration of the size and design
of the hospice, while endeavoring to address and accomplish all of
the underlying objectives of a compliance officer and a corporate
compliance committee. See section II.B. and accompanying notes.
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(3) The development and implementation of regular, effective
education and training programs for all affected employees;
(4) The creation and maintenance of a process, such as a hotline or
other reporting system, to receive complaints and ensure effective
lines of communication between the compliance officer and all
employees, and the adoption of procedures to protect the anonymity of
complainants and to protect whistleblowers from retaliation;
(5) The use of audits and/or other evaluation techniques to monitor
compliance, identify problem areas, and assist in the reduction of
identified problem areas;
(6) The development of appropriate disciplinary mechanisms to
enforce standards and the development of policies to address (i)
employees who have violated internal compliance policies, applicable
statutes, regulations or Federal health care program requirements
13 and (ii) the employment of sanctioned and other specified
individuals; and
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\13\ The term ``Federal health care programs'' is applied in
this document as defined in 42 U.S.C. 1320a-7b(f), which includes
any plan or program that provides health benefits, whether directly,
through insurance, or otherwise, which is funded directly, in whole
or in part, by the United States Government (i.e., via programs such
as Medicare, Federal Employees' Compensation Act, Black Lung, or the
Longshore and Harbor Worker's Compensation Act) or any State health
plan (e.g., Medicaid, or a program receiving funds from block grants
for social services or child health services). Also, for the
purposes of this document, the term ``Federal health care program
requirements'' refers to the statutes, regulations, rules,
requirements, directives and instructions governing Medicare,
Medicaid and all other Federal health care programs.
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(7) The development of policies that direct prompt and proper
responses to detected offenses, including the initiation of appropriate
corrective action and preventative measures.
A. Written Policies and Procedures
Every compliance program should require the development and
distribution of written compliance policies, standards, and practices
that identify specific areas of risk and vulnerability to the hospice.
These policies, standards and practices should be developed under the
direction and supervision of, or subject to review by, the compliance
officer and compliance committee and, at a minimum, should be provided
to all individuals who are affected by the particular policy at issue,
including the hospice's agents and independent contractors.
14
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\14\ According to the Federal Sentencing Guidelines, an
organization must have established compliance standards and
procedures to be followed by its employees and other agents in order
to receive sentencing credit for an ``effective'' compliance
program. The Federal Sentencing Guidelines define ``agent'' as ``any
individual, including a director, an officer, an employee or an
independent contractor, authorized to act on behalf of the
organization.'' See United States Sentencing Commission Guidelines,
Guidelines Manual, 8A1.2, Application Note 3.
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1. Standards of Conduct
Hospices should develop standards of conduct for all affected
employees that include a clearly delineated commitment to compliance by
the hospice's senior management 15 and its divisions,
including affiliated providers operating under the hospice's control
and other health care professionals (e.g., hospice physicians,
16 nurses, physical therapists, occupational therapists,
social workers, spiritual counselors, bereavement counselors and
volunteers). Standards should articulate the hospice's commitment to
comply with all Federal, State and private insurer standards, with an
emphasis on preventing fraud and abuse. They should explicitly state
the organization's mission, goals and ethical requirements of
compliance and reflect a carefully crafted, clear expression of
expectations for all hospice governing body members, officers,
managers, employees, physicians, clinicians and, where appropriate,
volunteers, contractors and other agents. These standards should
promote integrity, support objectivity, and foster trust. Standards
should not only address compliance with statutes and regulations, but
should also set forth broad principles that guide employees in
conducting business professionally and properly.
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\15\ The OIG strongly encourages high-level involvement by the
hospice's governing body, CEO, chief operating officer, general
counsel, and chief financial officer, as well as other medical or
clinical personnel, as appropriate, in the development of standards
of conduct. Such involvement should help communicate a strong and
explicit statement of compliance goals and standards.
\16\ When the term ``hospice phyisican'' is applied in this
document, it refers to the hospice's medical director or the
physician member of a hospice's Interdisciplinary Group. The
``Interdisciplinary Group,'' which is composed of at least a doctor
of medicine or osteopathy, registered nurse, medical social worker,
and pastoral or other counselor, is responsible for: (1)
participation in the establishment of the plan of care; (2)
provision or supervision of hospice care and services; (3) periodic
review and updating of the plan of care for each individual
receiving hospice care; and (4) establishment of policies governing
the day-to-day provision of hospice care and services. See 42 CFR
418.68.
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The standards should be distributed to, and comprehensible by, all
affected employees (e.g., translated into other languages when
necessary and written at appropriate reading levels). Further, to
assist in ensuring that employees continuously meet the expected high
standards set forth in the code of conduct, any employee handbook
delineating or expanding upon these standards of conduct should be
regularly updated as applicable statutes, regulations and Federal
health care program requirements are modified and/or
clarified.17
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\17\ The OIG recognizes that not all standards, policies, and
procedures need to be communicated to all employees. However, the
OIG believes that the bulk of the standards that relate to complying
with fraud and abuse laws and other ethical areas should be
addressed and made part of all affected employees' training. The
hospice must decide which additional educational programs should be
limited to the different levels of employees, based on job functions
and areas of responsibility.
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[[Page 54035]]
When they first begin working for the hospice, and each time new
standards of conduct are issued, employees should be asked to sign a
statement certifying that they have received, read, and understood the
standards of conduct. An employee's certification should be retained by
the hospice in the employee's personnel file, and available for review
by the compliance officer.
2. Risk Areas
The OIG believes that a hospice's written policies and procedures
should take into consideration the particular statutes, rules, and
program instructions that apply to each function or department of the
hospice.18 In contrast to the standards of conduct, which
are designed to be a clear and concise collection of fundamental
standards, the written policies should articulate specific procedures
that hospice staff should follow.
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\18\ A hospice can conduct focus groups composed of managers
from various departments to solicit their concerns and ideas about
compliance risks that may be then addresses by the hospice's
policies and procedures. Such employee participation in the
development of the hospice's compliance program can promote its
credibility and foster employee acceptance of the program.
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Consequently, we recommend that these policies and procedures be
coordinated with the appropriate training and educational programs,
with an emphasis on areas of special concern that have been identified
by the OIG through its investigative and audit functions.19
Although the OIG concluded in a 1998 report that the Medicare hospice
program seems to be working as intended,20 compliance
programs for hospices should still address areas of OIG concern that
include:21
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\19\ The OIG periodically issues Special Fraud Alerts setting
forth activities believed to raise legal and enforcement issues. For
example, see OIG Special Fraud Alert--``Fraud and Abuse in Nursing
Home Arrangements with Hospices'' (March 1998); see also OIG
Medicare Advisory Bulletin on Hospice Benefits (November 1995).
Hospice compliance programs should require that the legal staff,
compliance officer, or other appropriate personnel carefully
consider any and all Special Fraud Alerts issued by the OIG that
relate to hospices. Moreover, the compliance programs should address
the ramifications of failing to cease and correct any conduct
criticized in a Special Fraud Alert, if applicable to hospices, or
to take reasonable action to prevent such conduct from reoccurring
in the future. If appropriate, a hospice should take the steps
described in section II.G. regarding investigations, reporting, and
correction of identified problems.
\20\ See OIG report OEI-04-93-00270--``Medicare Hospice
Beneficiaries: Services and Eligibility.''
\21\ Hospices may also want to consult the OIG's Work Plan when
conducting the risk assessment. The OIG Work Plan details the
various projects the OIG intends to address in the applicable fiscal
year. It should be noted that the priorities in the Work Plan are
subject to modification and revision as the year progresses and it
does not represent a complete or final list of areas of concern to
the OIG. The Work Plan is currently available on the Internet at
http://www.dhhs.gov/progorg/oig.
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Uninformed consent to elect the Medicare Hospice
Benefit;22
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\22\ A hospice must ensure that an individual (or authorized
representative) is informed about the palliative nature of the care
and services that may be provided if the individual desires to elect
the Medicare Hospice Benefit. 42 CFR 418.62. The decision to elect
the Medicare Hospice Benefit has significant consequences because
the patient waives the right to receive standard Medicare benefits
related to the terminal illness, including all treatment for the
purposes of curing the terminal illness. See 42 U.S.C. 1395d(d). A
patient's hospice election statement must include the following
items of information: (1) Identification of the particular hospice
that will provide care to the individual; (2) the individual's or
representative's acknowledgment that he or she has been given a full
understanding of hospice care; (3) the individual's or
representative's acknowledgment that he or she understands that
certain Medicare services are waived by the election; (4) the
effective date of the election; and (5) the signature of the
individual or representative. See Medicare Hospice Manual Sec. 210.
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Admitting patients to hospice care who are not terminally
ill;23
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\23\ For a hospice patient to receive reimbursement for hospice
services under Medicare, the patient must be ``terminally ill.'' See
42 U.S.C. 1395d(a). An individual is considered to be ``terminally
ill'' if the individual has a medical prognosis that the
individual's life expectancy is six months or less if the illness
runs its normal course. 42 CFR 418.3. In March 1995, Operation
Restore Trust (ORT), a joint initiative, was established between the
OIG, HCFA, and Administration on Aging. Among its projects, ORT
assessed the medical eligibility for hospice services in the five
largest States in terms of Medicare spending (New York, Florida,
Illinois, Texas and California). Through ORT activities, it was
discovered that many beneficiaries receiving Medicare hospice
benefits did not have a terminal illness as defined by Medicare. See
OIG report A-05-96-00023--``Enhanced Controls Needed to Assure
Validity of Medicare Hospice Enrollments.'' See also section
II.A.3.a. and accompanying notes.
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Arrangement with another health care provider who a
hospice knows is submitting claims for services already covered by the
Medicare Hospice Benefit; 24
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\24\ When an individual makes an election to receive services
covered by the Medicare Hospice Benefit, that individual waives the
right to receive Medicare reimbursement for any treatment related to
his or her terminal illness. Accordingly, a hospice should ensure it
is not involved with a health care provider who the hospice knows
submits claims for the following services that are unallowable for
reimbursement under the Medicare Hospice Benefit: (1) Standard
Medicare benefits for treatment of the terminal illness; (2)
treatment by another hospice not arranged for by the patient's
hospice; and (3) care from another provider that duplicates care the
hospice is required to furnish. See 42 U.S.C. 1395d(d). It is
expected that the hospice provider will work with other providers to
coordinate care and ensure appropriate billing if these situations
occur. Where a single episode of care culminates in an inpatient
admission and also involves services by two different providers, the
need for a clear record from both providers is critical.
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Under-utilization; 25
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\25\ In other words, knowing denial of needed care in order to
keep costs low. A hospice is accountable for the appropriate
allocation and utilization of its resources in order to provide
optimal care consistent with the needs of a patient, family and/or
lawful representative. When a patient 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, because the hospice
will get paid the same amount regardless of the number of services
provided. The OIG has received complaints about hospices neglecting
patient needs and ignoring reasonable requests for treatment,
including complaints about limited availability of durable medical
equipment for patients as their medical condition decreases and
failure to provide continuous care for periods of crisis due to
staff shortages. The OIG has also been alerted to improper
utilization of services that occurs when a hospice encourages a
patient to revoke the Medicare Hospice Benefit for the purpose of
obtaining expensive care under the standard Medicare benefits, only
to re-elect the Medicare Hospice Benefit when expensive care is no
longer necessary.
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Falsified medical records or plans of care; 26
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\26\ OIG investigations have revealed that certain hospices have
falsified patient medical records and plans of care to exaggerate
the negative aspects regarding a hospice patient's condition to
justify reimbursement. See section II.A.3.b. and accompanying notes.
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Untimely and/or forged physician certifications on plans
of care;
Inadequate or incomplete services rendered by the
Interdisciplinary Group; 27
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\27\ Each hospice is required to have an ``Interdisciplinary
Group'' of personnel. See 42 U.S.C. 1395x(dd)(2)(B). See note 16.
Failure of the Interdisciplinary Group to meet its responsibilities
may result in standard care. In addition, inadequate review of a
hospice patient may result in improper reimbursement for services
provided to a patient who fails to continue to be eligible for the
Medicare Hospice Benefit.
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Insufficient oversight of patients, in particular, those
patients receiving more than six consecutive months of hospice
care;28
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\28\ Since the enactment of the Balanced Budget Act of 1997, the
Medicare Hospice Benefit is divided into the following benefit
periods: (1) initial 90-day; (2) subsequent 90-day; and (3)
unlimited number of 60-day benefit periods as long as the patient
continues to meet program eligibility requirements. See 42 U.S.C.
1395d. At the beginning of each subsequent 60-day benefit period,
the hospice physician must recertify that the patient is terminally
ill. See 42 U.S.C. 1395f(a)(7). If the necessary oversight is not
performed during the unlimited periods of care, a hospice may
receive improper reimbursement for services provided to a patient
who fails to continue to be eligible for the Medicare Hospice
Benefit.
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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,29
[[Page 54036]]
including improper arrangements with nursing homes;30
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\29\ Examples of arrangements that may run afoul of the anti-
kickback statute include practices in which a hospice pays a fee to
a physician for each certification of terminal illness, or provides
nursing, administrative, and other services for free or below fair
market value to physicians, nursing homes, hospitals and other
potential referral sources with the intent to influence referrals.
See 42 U.S.C. 1320a-7b; 60 FR 40847 (1995). See also discussion in
section II.A.4. and accompanying notes. In addition, a hospice that
offers an incentive to an individual that such hospice knows or
should know is likely to influence the individual to use a
particular hospice may be subject to civil money penalties. See 42
U.S.C. 1320a-7a(a)(5).
\30\ The OIG has observed instances of potential kickbacks
between hospices and nursing homes to unlawfully 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 directly from Medicaid if the patient had not been enrolled
in hospice. (If 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 patient's room and board.) See Hospice Medicare Manual
Sec. 204.2. See also section II.A.4. and accompanying notes.
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Overlap in the services that a nursing home provides,
which results in insufficient care provided by a hospice to a nursing
home resident;31
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\31\ 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. Recent OIG reports found
that residents of certain nursing homes receive fewer services from
their hospice than patients who receive hospice services in their
own homes. Upon review, it was found that many nursing home hospice
patients were receiving only basic nursing and aide visits that were
provided by nursing home staff as part of room and board when
hospice staff were not present. Other additional treatments provided
by hospice staff, such as nursing and aide visits, were often
clearly within the professional skills possessed by nursing home
staff. The reports found that the nature of services provided by
hospice staff, while appropriate and efficacious, appeared to differ
little from services a nursing home would have provided if the
patient was not enrolled in hospice. See OEI report OEI-05-95-
00250--``Hospice Patients in Nursing Homes;'' see also OIG report A-
05-96-00023--``Enhanced Controls Needed to Assure Validity of
Medicare Hospice Enrollments.'' 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. See also section II.A.3.e. and accompanying notes.
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Improper relinquishment of core services and professional
management responsibilities to nursing homes, volunteers and privately-
paid professionals;32
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\32\ Certain of the hospice services (i.e.. ``core services''
such as nursing, medical, social, and counseling services) must be
provided directly to the patient by employees of the hospice, while
other non-core hospice services may be provided at fair market value
in accordance with contracts with other providers. However, the
hospice must retain professional management for all contracted
services. See 42 CFR 418.80.
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Providing hospice services in a nursing home before a
written agreement has been finalized, if required;33
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\33\ A patient who resides in a skilled nursing facility or
nursing facility may elect the Medicare Hospice Benefit if: (1) the
residential care is paid for by (a) the beneficiary or private
insurance, or (b) Medicaid (if the beneficiary is dual eligible);
and (2) the hospice and facility have a written agreement under
which the hospice takes full responsibility for the professional
management of the individual's hospice care and the facility agrees
to provide room and board. Hospice Medicare Manual Sec. 204.2
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Billing for a higher level of care than was necessary;
34
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\34\ Billing for unnecessary services involves knowingly seeking
reimbursement for services that ``are not reasonable and necessary
for the palliation or management of terminal illness.'' See 42
U.S.C. 1395y(a)(1)(C). Because HCFA establishes different payment
amounts for specific categories of covered hospice care, a hospice
must ensure that it provides services to hospice patients that are
reasonable and necessary. Otherwise, the hospice may be reimbursed
for a higher level of care than was necessary, e.g., a hospice that
provides and bills for continuous care where only routine home care
is necessary. See also section II.A.3.d. and accompanying notes.
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Knowingly billing for inadequate or substandard care;
Pressure on a patient to revoke the Medicare Hospice
Benefit when the patient is still eligible for and desires care, but
the care has become too expensive for the hospice to deliver;
35
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\35\ Fiscal intermediaries have informed the OIG that hospices
rarely offer the reasons supporting the revocation of a patient's
Medicare Hospice Benefit. Although a hospice may discharge a patient
if it discovers that the patient is not terminally ill, hospices
should not encourage a patient to revoke the benefit merely to avoid
the obligation to pay for hospice services that have become too
costly. See 42 CFR 418.28; Hospice Medicare Manual Sec. 210.
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Billing for hospice care provided by unqualified or
unlicensed clinical personnel; 36
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\36\ Medicare conditions of participation require that hospices
and all hospice employees must be licensed in accordance with
applicable Federal, State and local laws and regulations. 42 CFR
418.72.
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False dating of amendments to medical records;
37
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\37\ If additions or corrections need to be made to medical
records, hospices should make such entries according to standards of
practice and applicable State law. For example, hospices might
correct a medical record by drawing a single line through the
erroneous entry, writing ``error'' next to the entry, initialing and
dating the correction and writing the correct information near the
entry or writing where the correct information could be found.
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High-pressure marketing of hospice care to ineligible
beneficiaries; 38
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\38\ Hospices should not utilize prohibited or inappropriate
conduct (e.g., offer free gifts or services to patients), designed
to maximize business growth and patient retention, to carry out
their initiatives and activities. Also, any marketing information
offered by hospices should be clear, correct, non-deceptive, and
fully informative. Through ORT, it was discovered that hospice
marketing materials had placed considerable emphasis on the
availability of hospice benefits for long term care patients, while
downplaying or ignoring the terminal illness eligibility
requirement. See OIG report A-05-96-00023--``Enhanced Controls
Needed to Assure Validity of Medicare Hospice Enrollments.''
Hospices should not engage in marketing and sales strategies that
offer incomplete or inadequate information about Medicare
entitlement under the Medicare Hospice Benefit to induce
beneficiaries to elect hospice and thereby waive aggressive
treatment options that Medicare would otherwise cover. Marketing
statements should not create the perception that the initial
terminal prognosis is of limited importance and that hospice
benefits may almost routinely be provided over an indefinite time
period. Marketing materials should prominently feature the
eligibility requirements for the Medicare Hospice Benefit.
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Improper patient solicitation activities, such as
``patient charting;' 39
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\39\ An example of an improper review of patient records is when
a hospice arranges with the administration of a nursing facility to
review patient records without the patent's permission, solely to
determine if the patients are eligible for hospice care and to
solicit hospice referrals. Hospices should not review medical
records of nursing home patients in an attempt to recruit patients
for hospice services based on their diagnoses. For instance, see OIG
report A-05-96-00023--``Enhanced Controls Needed to Assure Validity
of Medicare Hospice Enrollments.''
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Inadequate management and oversight of subcontracted
services, which results in improper billing; 40
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\40\ The Balanced Budget Act of 1997, Pub.L. 105-33, amended the
Social Security Act so that hospices will no longer be required to
routinely provide all physician services directly by employing a
physician. See 42 U.S.C. 1395x(dd)(2). Because the OIG has received
reports of limited involvement displayed by contracted physicians,
as opposed to hospice-employed physicians, hospices should consider
having oversight mechanisms in place to ensure that hospice
physicians are thoroughly reviewing re-certification documentation.
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Sales commissions based upon length of stay in hospice;
41
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\41\ Through ORT activities, it was discovered that hospice
sales staff often were paid on commission based on the length of a
patient's stay in hospice. For example, commission amounts were
determined by multiplying the total number of days of hospice
patient care (patient days) within a sales representative's
territory by a factor that reflected the level of achievement of
assigned sales performance objectives. Such marketing tactics
encouraged the recruitment of long-term patients, many of whom the
review found ineligible for the Medicare Hospice Benefit. The OIG
recommends that hospices monitor sales commissions for potential
vulnerabilities associated with improper patient recruiting. See OIG
report A-05-96-00023--``Enhanced Controls Needed to Assure Validity
of Medicare Hospice Enrollments.''
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Deficient coordination of volunteers; 42
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\42\ Hospices rely heavily on volunteer support. In fact, the
Medicare Hospice Benefit is the only Federally funded program that
mandates the provision of volunteer services. Appropriately,
hospices need to recognize and attend to compliance issues
associated with volunteers (i.e., screening, training, disciplining,
monitoring, etc.)
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Improper indication of the location where hospice services
were delivered; 43
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\43\ Medicare payments for hospice services are made on a
prospective basis and adjusted by an area wage index. Hospices must
submit claims based on the geographic location at which the service
is furnished and not the location of the hospice. Incorrect
designation of the place of service for revenue codes 651 and 652 of
the hospice claim may significantly alter reimbursement and result
in overpayment for services performed (e.g., hospice office in a
metropolitan area may be reimbursed more than a rural home where the
services were performed).
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[[Page 54037]]
Failure to comply with applicable requirements for verbal
orders for hospice services; 44
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\44\ Hospice staff must make an appropriate entry in the
patient's medical record as soon as they receive a verbal
certification of terminal illness and file written certifications in
the medical record. See 42 CFR 418.22(d). State regulations may
require that verbal and telephone orders from physicians should only
be accepted by individuals authorized by State law to accept such
orders. The OIG recommends that those authorized individuals
accepting verbal and telephone orders should record, date and sign
these orders and the physician(s) who ordered the service or
treatment should countersign them no later than the time period
required by State regulations.
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Non-response to late hospice referrals by physicians;
45
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\45\ We have received comments expressing concern over late
hospice referrals by physicians. While the onus of a timely hospice
referral may be on a physician, a hospice should identify untimely
referrals and provide adequate follow-up to the physicians. When
hospice referrals are late, terminally ill patients may be
unnecessarily denied access to the Medicare Hospice Benefit,
hospices may have to admit a patient at the costliest stage of
terminal illness, and quality of care may be affected because of
patients being too far along to receive the optimum benefits of
hospice care. Hospices need to work closely with physicians to
educate and remind them as to the sensitivities and risks associated
with untimely referrals. The OIG supports appropriate efforts to
increase access to hospice care for eligible individuals.
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Knowing misuse of provider certification numbers, which
results in improper billing; 46
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\46\ E.g., transfer of a patient from one hospice to another
hospice owned by the same company to circumvent applicable
reimbursement caps.
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Failure to adhere to hospice licensing requirements and
Medicare conditions of participation; 47 and
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\47\ See 42 CFR 418.50-418.100 for the Medicare conditions of
participation that apply to hospices.
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Knowing failure to return overpayments made by Federal
health care programs.48 A hospice's prior history of
noncompliance with applicable statutes, regulations and Federal health
care program requirements may indicate additional types of risk areas
where the hospice may be vulnerable and that may require policies and
procedures to prevent recurrence. 49 Additional risk areas
should be assessed by hospices as well as incorporated into the written
policies and procedures and training elements developed as part of
their compliance programs.
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\48\ An overpayment is the amount of money a hospice may have
received in excess of the amount due and payable under a health care
program. Examples of overpayments include, but are not limited to,
instances where a hospice is: (1) Paid twice for the same service
either by Medicare or by Medicare and another insurer; or (2) paid
for care rendered to patients who are not terminally ill or are
otherwise ineligible for the Medicare Hospice Benefit. For instance,
see Hospice Medicare Manual Sec. 307. The OIG strongly recommends
that the hospice institute procedures to detect overpayments and to
promptly remit such overpayments to the affected payor. See 42
U.S.C. 2320a-7b(a)(3), which provides criminal penalties for failure
to disclose an overpayment. See also 18 U.S.C. 669.
\49\ ``Recurrence of misconduct similar to that which an
organization has previously committed casts doubt on whether it took
all reasonable steps to prevent such misconduct'' and is a
significant factor in the assessment of whether a compliance program
is effective. See United States Sentencing Commission Guidelines,
Guidelines Manual, 8A1.2, Application Note 3(k)(iii).
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3. Eligibility Requirements
Of the risk areas identified above, those pertaining to the
Medicare eligibility requirements have been the frequent subject of
investigations and audits. With respect to the reimbursement process, a
hospice's written policies and procedures should reflect and reinforce
current Federal health care requirements regarding the eligibility for
Medicare reimbursement. The policies must create a mechanism for the
billing or reimbursement staff to communicate effectively and
accurately with the clinical staff. Policies and procedures should:
Provide for complete and timely documentation of the
specific clinical factors that qualify a patient for the Medicare
Hospice Benefit; 50
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\50\ Each patient's clinical record must contain: (1) The
initial and subsequent assessments (including hospice admission
history, certification, and recertification); (2) the plan of care;
(3) identification data; (4) consent and authorization and election
forms; (5) pertinent medical history; and (6) complete documentation
of all services and events (including evaluations, treatments,
progress notes, etc.) See CFR 418.74.
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Delineate who has authority to make entries in the patient
record;
Emphasize that patients should be admitted to hospice care
only when appropriate documentation supports the applicable
reimbursement eligibility criteria and only when such documentation is
maintained, appropriately organized in a legible form, and available
for audit and review. The documentation should record the activity
leading to the record entry and the identity of the individual
providing the service. Documentation should be consistent and any
discrepancies discussed and reconciled. The hospice should consult with
its physicians, clinical staff and/or governing body to establish other
appropriate documentation guidelines;
Indicate that the diagnosis and procedure codes for
hospice services reported on the reimbursement claim should be based on
the patient's clinical condition as reflected in the medical record and
other documentation, and should comply with all applicable official
coding rules and guidelines. Any Health Care Financing Administration
Common Procedure Coding System (HCPCS), International Classification of
Disease (ICD), or revenue code (or successor codes) used by the billing
staff should accurately describe the service that was ordered by the
physician and performed by the hospice. The documentation necessary for
accurate billing should be available to billing staff; and
Provide that the compensation for hospice admission
personnel, billing department personnel and billing consultants should
not offer any financial incentive to bill for hospice care regardless
of whether applicable eligibility criteria for reimbursement is met.
The written policies and procedures concerning proper billing
should reflect the current reimbursement principles set forth in
applicable regulations and should be developed in tandem with private
payor and organizational standards. Particular attention should be paid
to issues associated with patient election of the Medicare Hospice
Benefit, certification of terminal illness of a patient, development
and certification of a patient's interdisciplinary plan of care and
reasonableness and necessity of the level of hospice care provided.
51
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\51\ The OIG has undertaken numerous audits, investigations,
inspections, and national enforcement initiatives aimed at reducing
potential and actual fraud, abuse and waste. For example, see OIG
report A-05-96-00023--``Enhanced Controls Needed to Assure Validity
of Medicare Hospice Enrollments;'' see also OIG Special Fraud
Alert--``Fraud and Abuse in Nursing Home Arrangements with
Hospices'' (March 1998); OIG Medicare Advisory Bulletin on Hospice
Benefits (November 1995).
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a. Terminal Illness as an Eligibility Requirement. For a hospice
patient to receive reimbursement for hospice services under
Medicare,52 the patient must be ``terminally ill.''
53 Hospices should create oversight mechanisms to ensure
that the terminal illness of a Medicare beneficiary is verified
54 and
[[Page 54038]]
the specific factors qualifying the patient as terminally ill are
properly documented.55 Any determinative assessment of the
terminal illness of a Medicare beneficiary should be completed prior to
billing Medicare for hospice care. Physicians must certify that the
beneficiary was terminally ill at the time when a patient was admitted
for hospice services as well as at the beginning of subsequent hospice
benefit periods. 56
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\52\ 42 U.S.C. 1395d(a) authorizes the reimbursement of hospice
care.
\53\ An individual is considered to be ``terminally ill'' if the
individual has a medical prognosis that the individual's life
expectancy is six months or less if the illness runs its normal
course. 42 CFR 418.3. However, the fact that a hospice patient lives
beyond this six month period, in and of itself, does not constitute
grounds for a determination that the patient was never eligible for
hospice care, or that the services provided to the patient were not
reimbursable by Medicare.
\54\ Medical reviews, audits, inspections, and investigations of
hospices have concluded that hospices have billed Medicare for
hospice services provided to patients who are not terminally ill.
For instance, see OIG report OEI-04-93-00270--``Medicare Hospice
Beneficiaries: Services and Eligibility.'' Through Operation Restore
Trust activities and the increased program integrity actions by the
Regional Home Health Intermediaries (RHHIs), it was discovered that
many beneficiaries receiving Medicare hospice benefits did not have
a terminal illness. In the review of hospice cases between 1992 and
1996, patients did not demonstrate significant clinical symptoms of
their disease nor notable functional limitations one would expect to
see in a person who has a terminal illness as defined by Medicare.
See OIG report A-05-96-00023--``Enhanced Controls Needed to Assure
Validity of Medicare Hospice Enrollments.'' Findings such as these
have prompted a concern that some hospices may intentionally
misrepresent a condition as terminal in order to secure Medicare
reimbursement. See also note 23.
\55\ See 42 CFR 418.22(d). If a question is raised as to whether
a patient is terminally ill, the hospice will be requested to
furnish its Medicare fiscal intermediary with the information
necessary to establish that the patient is terminally ill.
\56\ See 42 U.S.C. 1395f(a)(7). See also note 28.
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The hospice's written policies and procedures should require, at a
minimum, that:
Before a patient is admitted for hospice services, the
hospice physician and attending physician thoroughly review and certify
the admitting diagnosis and prognosis;
A patient's medical record contain complete documentation
to support the certification made by the hospice physician or attending
physician; 57
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\57\ In order to verify a patient's terminal illness, Medicare
fiscal intermediaries need to review physician input and rationale
beyond a signature on the certification form (e.g., a recent medical
history and physical if the physician does not actually examine the
patient prior to admission to hospice; summary of physician review
of the history and physical taken by hospice personnel; or physician
documentation of his or her contribution to the Interdisciplinary
Group meetings).
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The patient or lawful representative is informed of the
determination of the patient's life limiting condition;
The patient or lawful representative is aware that the
goal of hospice is directed toward relief of symptoms, rather than the
cure of the underlying disease;
A patient's medical condition and status is sufficiently
reviewed during Interdisciplinary Group meetings; and
The clinical progression/status of a patient's disease and
medical condition are properly documented.
Hospices can further ensure compliance with the terminal illness
requirement through discussions with Medicare beneficiaries and their
families, reminding them that they must satisfy the regulatory
requirements for terminal illness status to be eligible for Medicare
coverage. These discussions can take place at the beginning of hospice
election and during appropriate times throughout a patient's hospice
care, e.g., at time of recertification. Because the Medicare conditions
of participation require hospices to give all beneficiaries an informed
consent form that outlines their legal rights before furnishing them
with hospice care,58 providers can include reminders of
terminal illness requirements in these forms.
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\58\ See 42 CFR 418.62.
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The OIG recognizes that decisions to admit patients to hospices are
often not based on medical factors alone. Such decisions are routinely
influenced by non-medical factors that would generally be reflected in
the plan of care. However, it is important to make a distinction
between admitting a patient to a hospice program and certifying a
patient for the Medicare Hospice Benefit. Based on an individual
hospice's admission criteria, some patients may be admitted to hospice
care prior to an estimated six months before death, as long as the
hospice is paid fair market value for its services. Regardless,
patients can be certified for the Medicare Hospice Benefit only when it
is reasonable to conclude that a patient's life expectancy is six
months or less if the illness runs its normal course. In other cases,
alternative modes of reimbursement, often provided through community
support, should be sought outside the Medicare Hospice Benefit.
b. Plan of Care. A hospice should take all reasonable steps to
ensure that a written plan of care is established and maintained for
each individual who receives hospice services, and that the care
provided to that individual is in accordance with the
plan.59 The plan must be established by the patient's
attending physician, the hospice physician, and the Interdisciplinary
Group.60 Each patient's needs should be continuously
assessed and all treatment options explored and evaluated in the
context of the patient's symptoms. 61 The hospice's written
policies and procedures should require, at a minimum, that:
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\59\ See 42 U.S.C. 1395f(a)(7); 42 CFR 418.58.
\60\ Id.
\61\ Some ORT audits found that hospice physicians, at times,
rely partly on referring, attending physicians. Although the
referring physician's opinion can and should be considered as part
of the decision making process, the final determination of hospice
eligibility is the responsibility of the hospice physician. For
instance, see OIG report A-04-95-02111. If employees of a hospice
believe that services ordered by a physician are excessive or
otherwise inappropriate, the hospice cannot avoid liability for
filing improper claims simply because a physician has certified the
need for hospice care.
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Before the hospice bills for hospice care provided to a
patient, the plan of care must be established by the hospice physician
and the Interdisciplinary Group; 62
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\62\ For Medicare reimbursement purposes, the services of the
hospice medical director(s) or the physician member of the Hospice
Interdisciplinary Group must be performed by a doctor of medicine or
osteopathy. See 42 CFR 418.202. The hospice should employ reasonable
measures to verify that physicians who establish the hospice plan
are appropriately licensed and no adverse actions, such as criminal
conviction, debarment or an exclusion, have been taken against them.
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The plan of care includes: (i) An assessment of the
hospice patient's needs and identification of services, including the
management of discomfort and symptom relief, and (ii) the scope and
frequency of services, in detail, needed to meet the patient's and
family's needs; 63
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\63\ 42 CFR 418.58(c).
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The plan of care must be reviewed and updated, at
intervals specified in the plan, by the attending physician, hospice
physician and the Interdisciplinary Group; 64
---------------------------------------------------------------------------
\64\ See 42 U.S.C. 1395f(a)(7)(B); 42 U.S.C. 1395x(dd)(2)(B).
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The hospice properly documents any review or update of a
hospice patient's plan of care by the attending physician, the hospice
physician and Interdisciplinary Group; and 65
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\65\ 42 CFR 418.58(b).
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The hospice regularly reviews the appropriateness of
Interdisciplinary Group services and level of services being provided,
patient admission to hospice, patient length of stay delays and
specific treatment modalities.
c. Utilization of Hospice Services. A hospice is accountable for
the appropriate allocation and utilization of its resources in order to
provide optimal care consistent with patient and family
needs.66 Accordingly, a hospice should monitor and evaluate
its resource allocation regularly to identify and resolve problems with
the utilization of services, facilities and personnel. To achieve such
monitoring, a hospice should schedule Interdisciplinary Group case
reviews and conferences,67
[[Page 54039]]
review specific problems that may arise with services provided and use
objective written criteria or treatment protocols to guide decisions
about the utilization of hospice services provided. Utilization
concerns may be an indication of a problem with the quality or quantity
of services provided to a hospice patient or demonstrate a more
fundamental concern as to the patient's eligibility for the Medicare
Hospice Benefit in the first place. Therefore, a hospice should
implement policies and procedures to identify, assess and rectify any
problems associated with:
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\66\ 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 beneficary'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.
\67\ Interdisciplinary Group conferences are regularly scheduled
periodic meetings of the Interdisciplinary Group to review the most
current patient/family assessment, evaluate needs and update the
plan of care.
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Appropriateness of Interdisciplinary Group services and
level of services being provided;
Appropriateness of patient admission to hospice;
Regular review of patient length of stay;
Delays in admission or in the provision of
Interdisciplinary Group services; and
Specific treatment modalities.
When utilization problems are identified, a hospice should
implement corrective actions and preventative measures that may include
ongoing monitoring, changes in the provision of services and revisions
of policies and procedures.
d. Levels of Hospice Care. A hospice's compliance program should
provide that it should only seek reimbursement for services that the
hospice has reason to believe are reasonable and necessary
68 for the palliation or management of terminal illness and
were ordered by a physician or other appropriately licensed individual.
The OIG recommends the hospice's compliance program communicate to
physicians authorized to certify patients for hospice care and hospice
personnel authorized to admit patients for hospice care that services
will only be paid if ordered, certified, covered, reasonable and
necessary for the patient, given his or her clinical condition.
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\68\ See note 34.
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Although hospice services are reimbursed on a per diem basis and
not per individual component of the services performed, the payment is
based upon the level of care provided.69 Because HCFA
establishes different payment amounts for specific categories of
covered hospice care, a hospice must ensure that it provides for
services to hospice patients that are reasonable and necessary.
Otherwise, the hospice may be reimbursed for a higher level of services
than was necessary, e.g., a hospice that provides and bills for
continuous care where only routine home care is necessary.
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\69\ Payment amounts are determined within each of the following
categories: (1) routine home care day; (2) continuous home care day
(patient who receives hospice care that consists predominantly of
nursing care on a continuous basis at home, is furnished only during
brief periods of crisis and only as necessary to maintain the
terminally ill patient at home); (3) inpatient respite care day
(hospice patient receives care in an approved facility on a short-
term basis for respite--not more than five consecutive days at a
time); and (4) general inpatient care day (hospice patient receives
general inpatient care in an inpatient facility for pain control or
acute or chronic symptom management that cannot be managed in other
settings). See 42 CFR 418.302.
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As a preliminary matter, the OIG recognizes that licensed health
care professionals must be able to order any services that are
appropriate for the care of their patients. However, Medicare and other
Government and private health care plans will only pay for those
services otherwise covered that meet appropriate standards (i.e., in
the case of Medicare, ``reasonable and necessary'' services). Providers
may not bill for services that do not meet the applicable
standards.70 The hospice is in a unique position to deliver
this information to the health care professionals on its staff and to
the physicians who certify hospice services. Upon request, a hospice
must be able to provide documentation, such as physician orders and
other patient medical records, to support the level of services
provided to a hospice patient.71 The compliance officer
should ensure that a clear, comprehensive summary of the definitions
for the different levels of hospice care 72 and applicable
rules of the various Government and private plans is prepared,
disseminated, and explained to appropriate hospice personnel.
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\70\ Administrative civil money penalties, assessments, and
exclusion, as well as remedies available under criminal and civil
law, including the civil False Claims Act, may be imposed against
any person who submits a claim for services ``that [the] person
knows or should know are not medically necessary.'' See, e.g., 42
U.S.C. 1320a-7a(a).
\71\ Medicare fiscal intermediaries have the authority to
require hospices that furnish items or services under the program to
submit documentation that substantiates services were actually
provided and medically necessary. See Medicare Intermediary Manual
Sec. 3116.1.B.
\72\ See note 69.
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We recommend that hospices formulate policies and procedures that
include periodic clinical reviews, both prior and subsequent to billing
for services, as a means of verifying that patients are receiving only
reasonable and necessary services. As part of such reviews, hospices
should examine the level, frequency, and duration of the services they
perform to determine, in consultation with a physician, whether
patients' medical conditions justify the level of services provided and
billed. A hospice may choose to incorporate this clinical review
function into pre-existing quality assurance mechanisms or any other
quality assurance processes that are part of its conditions of
participation.73
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\73\ See 42 CFR 418.66.
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e. Services Provided to Hospice Patients in Nursing Homes. Hospice
services may be appropriate and beneficial to terminally ill nursing
home residents who wish to receive palliative care.74
However, the OIG has found hospices that enroll nursing home patients
in hospice care are particularly vulnerable to fraud and
abuse.75 Appropriately, a hospice should set sufficient
oversight controls in place to ensure that care it provides to nursing
home residents is appropriate, complete, and in accordance with
applicable laws and Federal health care program requirements.
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\74\ See note 33.
\75\ In some cases reviewed in nursing homes, OIG medical
reviewers have found that while the hospice benefit may eventually
have been appropriate, at the time of election, patients were stable
and the electionof hospice was premature. See OEI report OEI-05-95-
00250: ``Hospice Patients in Nursing Homes;'' see also OIG report A-
05-96-00023--``Enhanced Controls Needed to Assure Validity of
Medicare Hospice Enrollments.'' For other examples of potential
fraud and abuse in the hospice/nursing home context, see notes 30-
33.
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When a resident of a nursing home elects the Medicare Hospice
Benefit, the hospice and the nursing home should jointly establish a
coordinated plan of care that reflects the hospice philosophy, and is
based on an assessment of the individual's needs and unique living
situation in the nursing home. The coordinated plan should identify the
care and services that the nursing home will provide to be responsive
to the unique needs of the patient/resident and his or her expressed
desire for hospice care.
In general, a hospice should involve nursing home personnel in
assisting with the administration of a patient's prescribed therapies
included in the plan of care only to the extent that the hospice would
routinely utilize the services of a hospice patient's family/caregiver
in implementing the plan of care.76 To satisfy the
applicable Medicare conditions of participation in the nursing home
context, hospices should implement policies and procedures to ensure
that:
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\76\ Hospice Certification Manual Sec. 2082.B.
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The hospice makes all covered services available to meet
the needs of a patient and does not routinely discharge patients in
need of costly inpatient care; 77
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\77\ See 42 CFR 418.50.
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[[Page 54040]]
The hospice retains professional responsibility for
services (e.g., personal care, nursing, medication for relieving pain
control) furnished by nursing home staff; 78
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\78\ See 42 CFR 418.56.
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All the care furnished by a nursing home related to the
terminal illness or related conditions is in accordance with the
hospice plan of care; 79
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\79\ See 42 CFR 418.58.
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The hospice and the nursing home communicate with each
other when any changes are indicated to the plan of care, and each
provider is aware of the other's responsibilities in implementing the
plan of care and complete those respective functions; 80
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\80\ Hospice Certification Manual Sec. 2082.A.
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Evidence of the coordinated plan of care is present in the
clinical records of both providers; 81
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\81\ Hospice Certification Manual Sec. 2082.A.
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Substantially all the core services are routinely provided
directly by hospice employees 82 and the hospice does not
rely on employees of the inpatient facility to furnish needed nursing,
physician, counseling, or medical social services; 83 and
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\82\ See 42 CFR 418.80.
\83\ In limited circumstances, HFCA may approve a waiver of the
requirement for core nursing services to be provided by a hospice
that is located in a non-urbanized area. See 42 CFR 418.83.
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The hospice keeps its forms and documentation of services
separate from the nursing home's forms and documentation.84
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\84\ A Hospice may consider creating some type of payroll
tracking or time study in an effort to properly differentiate
services between the hospice and the nursing home.
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4. Anti-Kickback and Self-Referral Concerns
The hospice should have policies and procedures in place with
respect to compliance with Federal and State anti-kickback statutes and
other applicable laws.85 Such policies should provide that:
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\85\ The hospice's in-house counsel or compliance officer
should, among other things, obtain copies of all relevant OIG
regulations, Special Fraud Alerts and advisory opinions (these
documents are located on the Internet at http://www.dhhs.gov/
progorg/oig), and ensure that the hospice's policies reflect the
guidance provided by the OIG.
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All of the hospices's contracts and arrangements with
actual or potential referral sources are reviewed carefully for
compliance with all applicable statutes and regulations; 86
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\86\ Although hospices may contract with physicians, see note
40, hospices and physicians mut still tailor such agreements to
avoid violation of the anti-kickback statute or similar Federal or
State statute or regulation and to comply with applicable Medicare
conditions of participation. See 42 CFR 418.56 and 418.86.
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The hospice does not submit or cause to be submitted to
the Federal health care programs claims for patients who were referred
to the hospice pursuant to contracts or financial arrangements that
were designed to induce such referrals in violation of the anti-
kickback statute or similar Federal or State statute or regulation; and
The hospice does not offer or provide gifts, free
services, or other incentives to patients, relatives of patients,
physicians, nursing facilities, hospitals, contractors or other
potential referral sources for the purpose of inducing referrals in
violation of the anti-kickback statute or similar Federal or State
statute or regulation.87
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\87\ See 42 U.S.C. 1320a-7b(b); 60 FR 40847 (1995).
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In particular, 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.88 Moreover,
hospice patients residing in nursing homes may be particularly
desirable from a hospice's financial standpoint.89
Therefore, with respect to arrangements with nursing homes, a hospice
should develop policies and procedures to prevent the following
practices from occurring, which may constitute potential kickbacks:
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\88\ While an exclusive or semi-exclusive arrangement with a
nursing home to provide hospice services to residents can promote
efficiency and safety by permitting the nursing home operator to
coordinate care, screen hospice caregivers, and maintain control of
the premises, such an arrangement 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.
\89\ 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 residing in their own homes.
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Hospice offering free or below fair market value goods to
induce a nursing home to refer patients to the hospice;
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;
90
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\90\ See note 30.
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Hospice paying above fair market value for ``additional''
non-core services that Medicaid does not consider to be included in its
``room and board'' payments to the nursing home; 91
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\91\ See OIG Special Fraud Alert--``Fraud and Abuse in Nursing
Home Arrangements with Hospices'' (March 1998).
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Hospice referring its patients to a nursing home to induce
the nursing home to refer its patients to the hospice;
Hospice providing free (or below fair market value) care
to nursing home patients, for whom the nursing home is receiving
Medicare payment under the Medicare 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; and
Hospice providing staff at its expense to the nursing home
to perform duties that otherwise would be performed by the nursing
home.
Further, the policies and procedures should specifically reference
and take into account the OIG's safe harbor regulations, which clarify
those payment practices that would be immune from prosecution under the
anti-kickback statute, as well as the OIG's civil money penalty and
exclusion authorities.92
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\92\ See 42 CFR 1001.952.
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5. Retention of Records
Hospice compliance programs should provide for the implementation
of a records system. This system should establish policies and
procedures regarding the creation, distribution, retention, storage,
retrieval and destruction of documents.93 The two categories
of documents developed under this system should include: (1) all
records and documentation (e.g., medical records, and billing and
claims documentation) required either by Federal or State law for
participation in Federal health care programs 94 or any
other applicable Federal and State laws and regulations (e.g., document
retention requirements to maintain State licensure); and (2) all
records necessary to protect the integrity of the hospice's compliance
process and confirm the effectiveness of the program.
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\93\ This records system should be tailored to fit the
individual needs and financial resources of the hospice.
\94\ For example, Medicare requires that hospices must establish
and maintain a clinical record for every individual receiving care
and services. The record must be complete, promptly and accurately
documented, readily accessible and systematically organized to
facilitate retrieval. Any entries are to be made and signed by the
person providing the services. See 42 CFR 418.74.
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The second category includes: (1) Documentation that employees were
adequately trained; (2) reports from the hospice's hotline, including
the nature and results of any investigation that was conducted; (3)
documentation of corrective action, including disciplinary action taken
and policy improvements introduced, in response to any internal
investigation or audit; (4) modifications
[[Page 54041]]
to the compliance program; (5) self-disclosures; and (6) the results of
the hospice's auditing and monitoring efforts.95
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\95\ The creation and retention of such documents and reports
may raise a variety of legal issues, such as patient privacy and
confidentiality. These issues are best discussed with legal counsel.
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6. Compliance as an Element of a Performance Plan
Compliance programs should require that the promotion of, and
adherence to, the elements of the compliance program be a factor in
evaluating the performance of all employees, who should be periodically
trained in new compliance policies and procedures. In addition, all
managers and supervisors should:
Discuss with all supervised employees and relevant
contractors the compliance policies and legal requirements pertinent to
their function;
Inform all supervised personnel that strict compliance
with these policies and requirements is a condition of employment; and
Disclose to all supervised personnel that the hospice will
take disciplinary action up to and including termination for violation
of these policies or requirements.
In addition to making performance of these duties an element in
evaluations, a compliance program should include a policy for
sanctioning managers and supervisors who fail to adequately instruct
their subordinates or fail to detect noncompliance with applicable
policies and legal requirements, where reasonable diligence on the part
of the manager or supervisor would have led to the discovery of any
problems or violations and given the hospice the opportunity to correct
them earlier.
The OIG believes all hospices should ensure that its employees
understand the importance of compliance. If a small hospice does not
have a formal performance evaluation structure, it should informally
convey the employee's compliance responsibilities and the importance of
these responsibilities in a written job description or orientation
checklist. The applicable documentation should include a dated
signature, with an indication that the employee has received it and
will be responsible for adherence to the responsibilities expressed.
B. Designation of a Compliance Officer and a Compliance Committee
1. Compliance Officer
Every hospice should designate a compliance officer to serve as the
focal point for compliance activities. This responsibility may be the
individual's sole duty or added to other management responsibilities,
depending upon the size and resources of the hospice and the complexity
of the task. Designating a compliance officer with the appropriate
authority is critical to the success of the program, necessitating the
appointment of a high-level official in the hospice with direct access
to the hospice's president or CEO, governing body, all other senior
management, and legal counsel.96 The officer should have
sufficient funding and staff to perform his or her responsibilities
fully. Coordination and communication are the key functions of the
compliance officer with regard to planning, implementing and monitoring
the compliance program.
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\96\ The OIG believes that it is not advisable for the
compliance function to be subordinate to the hospice's general
counsel, or comptroller or similar hospice financial officer. Free
standing compliance functions help to ensure independent and
objective legal reviews and financial analyses of the institution's
compliance efforts and activities. By separating the compliance
function from the key management positions of general counsel or
chief financial officer (where the size and structure of the hospice
make this a feasible option), a system of checks and balances is
established to more effectively achieve the goals of the compliance
program.
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The compliance officer's primary responsibilities should include:
Overseeing and monitoring the implementation of the
compliance program; 97
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\97\ For multi-hospice organizations or hospital-owned hospices,
the OIG encourages coordination with each hospice owned by the
corporation or hospital through the use of a headquarter's
compliance officer, communicating with parallel positions in each
facility, regional office or business line, as appropriate.
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Reporting on a regular basis to the hospice's governing
body, CEO and compliance committee (if applicable) on the progress of
implementation, and assisting these components in establishing methods
to improve the hospice's efficiency and quality of services, and to
reduce the hospice's vulnerability to fraud, abuse and waste;
Periodically revising the program in light of changes in
the organization's needs, and in the law and policies and procedures of
Government and private payor health plans;
Reviewing employees' certifications that they have
received, read and understood the standards of conduct;
Developing, coordinating and participating in a
multifaceted educational and training program that focuses on the
elements of the compliance program, and seeks to ensure that all
relevant employees and management are knowledgeable of, and comply
with, pertinent Federal and State standards;
Ensuring that independent contractors and agents who
furnish physician, nursing, or other health care services to the
clients of the hospice, or billing services to the hospice, are aware
of the requirements of the hospice's compliance program with respect to
eligibility, billing and marketing, among other things;
Coordinating personnel issues with the hospice's Human
Resources/Personnel office (or its equivalent) to ensure that: (i) The
National Practitioner Data Bank 98 has been checked with
respect to all medical staff and independent contractors (as
appropriate) and (ii) the List of Excluded Individuals/Entities
99 has been checked with respect to all employees, medical
staff and independent contractors (as appropriate); 100
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\98\ The National Practitioner Data Bank is a data base that
contains information about medical malpractice payments, sanctions
by boards of medical examiners or State licensing boards, adverse
clinical privilege actions and adverse professional society
membership actions. Health care entities can have access to this
data base to seek information about their own medical or clinical
staff, as well as prospective employees or physician contractors.
\99\ The List of Excluded Individuals/Entities is an OIG-
produced report available on the Internet at http://www.dhhs.gov/
progorg/oig. It is updated on a regular basis to reflect the status
of health care providers who have been excluded from participation
in the Medicare and Medicaid programs. In addition, the General
Services Administration maintains a monthly listing of debarred
contractors on the Internet at http://www.arnet.gov/epls.
\100\ The compliance officer may also have to ensure that the
criminal backgrounds of employees have been checked depending upon
State requirements or hospice policy. See note 131.
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Assisting the hospice's financial management in
coordinating internal compliance review and monitoring activities,
including annual or periodic reviews of departments;
Independently investigating and acting on matters related
to compliance, including the flexibility to design and coordinate
internal investigations (e.g., responding to reports of problems or
suspected violations) and any resulting corrective action (e.g., making
necessary improvements to hospice policies and practices, taking
appropriate disciplinary action, etc.) with all hospice departments,
subcontracted providers and health care professionals under the
hospice's control, and any other agents if appropriate; and
Continuing the momentum of the compliance program and the
accomplishment of its objectives long
[[Page 54042]]
after the initial years of implementation.101
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\101\ Periodic on-site visits of hospice operations, bulletins
with compliance updates and reminders, distribution of audiotapes or
videotapes on different risk areas, lectures at management and
employee meetings, circulation of recent health care articles
covering fraud and abuse, and innovative changes to compliance
training are various examples of approaches and techniques the
compliance officer can employ for the purpose of ensuring continued
interest in the compliance program and the hospice's commitment to
its policies and principles.
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The compliance officer must have the authority to review all
documents and other information that are relevant to compliance
activities, including, but not limited to, patient medical records,
billing records, and records concerning the marketing efforts of the
facility and the hospice's arrangements with other parties, including
employees, physicians, professionals on staff, relevant independent
contractors, suppliers, agents, and supplemental staffing entities.
This policy enables the compliance officer to review contracts and
obligations (seeking the advice of legal counsel, where appropriate)
that may contain referral and payment provisions that could violate the
anti-kickback statute and other legal or regulatory requirements.
A small hospice may not have the need or the resources to hire or
appoint a full time compliance officer. However, each hospice should
have a person in its organization (this person may have other
functional responsibilities) who can oversee the hospice's compliance
with applicable statutes, rules, regulations, and policies. The
structure and comprehensiveness of the hospice's compliance program
will help determine the responsibilities of each individual compliance
officer.
2. Compliance Committee
The OIG recommends that a compliance committee be established to
advise the compliance officer and assist in the implementation of the
compliance program.102 When developing an appropriate team
of people to serve as the hospice's compliance committee, including the
compliance officer, a hospice should consider a variety of skills and
personality traits that are expected from those in such
positions.103 Once a hospice chooses the people that will
accept the responsibilities vested in members of the compliance
committee, the hospice needs to train these individuals on the policies
and procedures of the compliance program, as well as how to discharge
their duties.
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\102\ The compliance committee benefits from having the
perspectives of individuals with varying responsibilities in the
organization, such as operations, finance, audit, human resources,
and clinical management (e.g., hospice physician), as well as
employees and managers of key operating units. These individuals
should have the requisite seniority and comprehensive experience
within their respective departments to implement any necessary
changes to hospice policies and procedures as recommended by the
committee.
\103\ A health care provider should expect its compliance
committee members and compliance officer to demonstrate high
integrity, good judgment, assertiveness, and an approachable
demeanor, while eliciting the respect and trust of employees of the
hospice and having significant professional experience working with
billing, clinical records, documentation, and auditing principles.
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The committee's functions should include:
Analyzing the legal requirements with which it must
comply, and specific risk areas;
Assessing existing policies and procedures that address
these risk areas for possible incorporation into the compliance
program;
Working with appropriate hospice departments to develop
standards of conduct and policies and procedures to promote compliance
with legal and ethical requirements;
Recommending and monitoring, in conjunction with the
relevant departments, the development of internal systems and controls
to carry out the organization's standards, policies, and procedures as
part of its daily operations;
Determining the appropriate strategy/approach to promote
compliance with the program and detection of any potential violations,
such as through hotlines and other fraud reporting mechanisms;
Developing a system to solicit, evaluate, and respond to
complaints and problems; and
Monitoring internal and external audits and investigations
for the purpose of identifying troublesome issues and deficient areas
experienced by the hospice, and implementing corrective and preventive
action.
The committee may also address other functions as the compliance
concept becomes part of the overall hospice operating structure and
daily routine.
The compliance committee is an extension of the compliance officer
and provides the organization with increased oversight. The OIG
recognizes that small hospices may not have the resources or the need
to establish a compliance committee. However, when potential problems
are identified, the OIG recommends the small hospices supplier create a
``taskforce,'' if appropriate, to address the problem. The members of
the taskforce may vary depending upon the issue.
C. Conducting Effective Training and Education
The proper education and training of corporate officers, managers,
employees, volunteers, nurses, physicians, and other health care
professionals, and the continual retraining of current personnel at all
levels, are significant elements of an effective compliance program. As
part of their compliance programs, hospices should require personnel to
attend specific training on a periodic basis, including appropriate
training in Federal and State statutes, regulations, and guidelines,
and the policies of private payors, and training in corporate ethics,
which emphasizes the organization's commitment to compliance with these
legal requirements and policies.104
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\104\ Specific compliance training should complement any
``inservice'' training sessions that a hospice may regularly
schedule to provide an ongoing program for the training of employees
as required by its conditions of participation. 42 CFR 418.64.
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These training programs should include sessions highlighting the
organization's compliance program, summarizing fraud and abuse laws,
Federal health care program requirements, claim development and
submission processes, patient rights, and marketing practices that
reflect current legal and program standards. The organization must take
steps to communicate effectively its standards and procedures to all
affected employees, physicians, independent contractors, and other
significant agents, e.g., by requiring participation in training
programs and disseminating publications that explain specific
requirements in a practical manner.105 Managers of specific
departments or groups can assist in identifying areas that require
training and in carrying out such training.106 Training
instructors may come from outside or inside the organization, but must
be qualified to present the subject matter involved and experienced
enough in the issues presented to adequately field questions and
coordinate discussions among those being trained. New employees should
be trained early in their employment.107
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Training programs and materials should be designed to take into account
the skills, experience, and knowledge of the individual trainees. The
compliance officer should document any formal training undertaken by
the hospice as part of the compliance program.
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\105\ Some publications, such as OIG's Special Fraud Alerts,
audit and inspection reports, and advisory opinions, as well as the
annual OIG work plan, are readily available from the OIG and could
be the basis for standards, educational courses, and programs for
appropriate hospice employees.
\106\ Significant variations in the functions and
responsibilities of different departments or groups may create the
need for training materials that are tailored to compliance concerns
associated with particular operations and duties.
\107\ Certain positions, such as those that involve the billing
of hospice services or patient admission to hospice care, create a
greater organizational legal exposure, and therefore require
specialized training.
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A variety of teaching methods, such as interactive training, and
training in several different languages, particularly where a hospice
has a culturally diverse staff, should be implemented so that all
affected employees are knowledgeable of the institution's standards of
conduct and procedures for alerting senior management to problems and
concerns.108 In addition to specific training in the risk
areas identified in section II.A.2, above, primary training for
appropriate corporate officers, managers, and other hospice staff
should include such topics as:
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\108\ Post-training tests can be used to assess the success of
training provided and employee comprehension of the hospice's
policies and procedures.
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Government and private payor reimbursement principles;
General prohibitions on paying or receiving remuneration
to induce referrals;
Improper alterations to clinical records; 109
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\109\ This practice involves the hospice altering the attending
physician's or other authorized physician's diagnosis in order to
receive reimbursement for hospice care. A hospice should not claim
the patient has a particular medical condition in order to qualify
for reimbursement for which it would not otherwise qualify.
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Providing hospice services with proper authorization;
Patient rights and patient education;
Compliance with Medicare conditions of participation; and
Duty to report misconduct.
Clarifying and emphasizing these areas of concern through training
and educational programs are particularly relevant to a hospice's
marketing and financial personnel, in that the pressure to meet
business goals may render these employees vulnerable to engaging in
prohibited practices.
The OIG suggests that all relevant levels of personnel be made part
of various educational and training programs of the
hospice.110 Employees should be required to have a minimum
number of educational hours per year, as appropriate, as part of their
employment responsibilities.111 For example, for certain
employees involved in the hospice admission functions, periodic
training in applicable reimbursement coverage and eligibility
requirements should be required. In hospices with high employee
turnover, periodic training updates are critical.
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\110\ In addition, where feasible, the OIG recommends that a
hospice afford outside contractors the opportunity to participate in
the hospice's compliance training and educational programs, or
develop their own programs that complement the hospice's standards
of conduct, compliance requirements, and other rules and practices.
\111\ Currently, the OIG is monitoring a significant number of
corporate integrity agreements that require many of these training
elements. The OIG usually requires a minimum of one to three hours
annually for basic training in compliance areas. Additional training
is required for specialty fields such as billing and marketing.
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The OIG recognizes that the format of the training program will
vary depending upon the resources of the hospice. For example, a small
hospice may want to create a video for each type of training session so
new employees can receive training in a timely manner.112
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\112\ If videos are utilized for compliance training, the OIG
suggests that a hospice make an individual available to field
questions from video trainees. In addition, those hospices that use
video training should strongly consider requiring trainees to
complete post training comprehension tests to ensure that trainees
actively paid attention to the video.
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The OIG recommends that attendance and participation in training
programs be made a condition of continued employment and that failure
to comply with training requirements should result in disciplinary
action, including possible termination, when such failure is serious.
Adherence to the provisions of the compliance program, such as training
requirements, should be a factor in the annual evaluation of each
employee. The hospice should retain adequate records of its training of
employees, including attendance logs and material distributed at
training sessions.
D. Developing Effective Lines of Communication
1. Access to the Compliance Officer
An open line of communication between the compliance officer and
hospice employees is equally important to the successful implementation
of a compliance program and the reduction of any potential for fraud,
abuse, and waste. Written confidentiality and non-retaliation policies
should be developed and distributed to all employees to encourage
communication and the reporting of incidents of potential
fraud.113 The compliance committee should also develop
independent reporting paths for an employee to report fraud, waste, or
abuse so that employees can feel comfortable reporting outside the
normal chain of command and supervisors or other personnel cannot
divert such reports.114
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\113\ The OIG believes that whistleblowers should be protected
against retaliation, a concept embodied in the provisions of the
False Claims Act. See 31 U.S.C. 3730(h). In many cases, employees
sue their employers under the False Claims Act's qui tam provisions
out of frustration because of the company's failure to take action
when a questionable, fraudulent, or abusive situation was brought to
the attention of senior corporate officials.
\114\ Hospices can also consider rewarding employees for
appropriate use of established reporting systems.
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The OIG encourages the establishment of a procedure so that hospice
personnel may seek clarification from the compliance officer or members
of the compliance committee in the event of any confusion or question
with regard to a hospice policy, practice, or procedure. Questions and
responses should be documented and dated and, if appropriate, shared
with other staff so that standards, policies, practices, and procedures
can be updated and improved to reflect any necessary changes or
clarifications. The compliance officer may want to solicit employee
input in developing these communication and reporting systems.
2. Hotlines and Other Forms of Communication
The OIG encourages the use of hotlines,115 e-mails,
written memoranda, newsletters, suggestion boxes, and other forms of
information exchange to maintain these open lines of
communication.116 If the hospice establishes a hotline, the
telephone number should be made readily available to all employees and
independent contractors, possibly by circulating the number on wallet
cards or conspicuously posting the telephone number in common work
areas.117 Employees should be permitted to report matters on
an anonymous basis. Matters reported through the hotline or other
communication sources that suggest substantial violations of compliance
policies, Federal health care program requirements, regulations, or
statutes should be documented and investigated promptly to determine
their veracity. A log should be maintained by the compliance officer
that records such
[[Page 54044]]
calls, including the nature of any investigation and its
results.118 Such information should be included in reports
to the governing body, the CEO, and compliance committee.119
Further, while the hospice should always strive to maintain the
confidentiality of an employee's identity, it should also explicitly
communicate that there may be a point where the individual's identity
may become known or may have to be revealed in certain instances.
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\115\ The OIG recognizes that it may not be financially feasible
for a smaller hospice to maintain a telephone hotline dedicated to
receiving calls about compliance issues. These companies may want to
explore alternative methods, e.g., outsourcing the hotline or
establishing a written method of confidential disclosure.
\116\ In addition to methods of communication used by current
employees, an effective employee exit interview program could be
designed to solicit information from departing employees regarding
potential misconduct and suspected violations of hospice policy and
procedures.
\117\ Hospices should also post in a prominent, available area
the HHS-OIG Hotline telephone number, 1-800-447-8477 (1-800-HHS-
TIPS), in addition to any company hotline number that may be posted.
\118\ To efficiently and accurately fulfill such an obligation,
the hospice should create an intake form for all compliance issues
identified through reporting mechanisms. The form could include
information concerning the date that the potential problem was
reported, the internal investigative methods utilized, the results
of the investigation, the corrective action implemented, the
disciplinary measures imposed, and any identified overpayments and
monies returned.
\119\ Information obtained over the hotline may provide valuable
insight into management practices and operations, whether reported
problems are actual or perceived.
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The OIG recognizes that assertions of fraud and abuse by employees
who may have participated in illegal conduct or committed other
malfeasance raise numerous complex legal and management issues that
should be examined on a case-by-case basis. The compliance officer
should work closely with legal counsel, who can provide guidance
regarding such issues.
The OIG recognizes that protecting anonymity may be infeasible for
small hospices. However, the OIG believes all hospice employees, when
seeking answers to questions or reporting potential instances of fraud
and abuse, should know to whom to turn to for attention and should be
able to do so without fear of retribution.
E. Auditing and Monitoring
An ongoing evaluation process is critical to a successful
compliance program. The OIG believes that an effective program should
incorporate thorough monitoring of its implementation and regular
reporting to senior hospice or corporate officers.120
Compliance reports created by this ongoing monitoring, including
reports of suspected noncompliance, should be maintained by the
compliance officer and shared with the hospice's senior management and
the compliance committee. The extent and frequency of the audit
function may vary depending on factors such as the size and available
resources, prior history of noncompliance, and the risk factors that a
particular hospice confronts.
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\120\ Even when a hospice or group of hospices is owned by a
larger corporate entity, the regular auditing and monitoring of the
compliance activities of an individual hospice must be a key feature
in any annual review. Appropriate reports on audit findings should
be periodically provided and explained to a parent organization's
senior staff and officers.
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Although many monitoring techniques are available, one effective
tool to promote and ensure compliance is the performance of regular,
periodic compliance audits by internal or external auditors who have
expertise in Federal and State health care statutes, regulations, and
Federal health care program requirements. The audits should focus on
the hospice's programs or divisions, including external relationships
with third-party contractors, specifically those with substantive
exposure to Government enforcement actions. At a minimum, these audits
should be designed to address the hospice's compliance with laws
governing kickback arrangements, claim development and submission,
reimbursement, eligibility, and marketing. The audits and reviews
should inquire into the hospice's compliance with the Medicare
conditions of participation and the specific rules and policies that
have been the focus of particular attention on the part of the Medicare
fiscal intermediaries or carriers, and law enforcement, as evidenced by
educational and other communications from OIG Special Fraud Alerts, OIG
audits and evaluations, and law enforcement's
initiatives.121 In addition, the hospice should focus on any
areas of concern that are specific to the individual hospice and have
been identified by any entity, whether Federal, State or internal.
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\121\ See also section II.A.2.
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Monitoring techniques may include sampling protocols that permit
the compliance officer to identify and review variations from an
established baseline. 122 Significant variations from the
baseline should trigger a reasonable inquiry to determine the cause of
the deviation. If the inquiry determines that the deviation occurred
for legitimate, explainable reasons, the compliance officer and hospice
management may want to limit any corrective action or take no action.
If it is determined that the deviation was caused by improper
procedures, misunderstanding of rules, including fraud and systemic
problems, the hospice should take prompt steps to correct the problem.
Any overpayments discovered as a result of such deviations should be
returned promptly to the affected payor, with appropriate documentation
and a sufficiently detailed explanation of the reason for the refund.
123
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\122\ The OIG recommends that when a compliance program is
established in a hospice, the compliance officer, with the
assistance of department managers, should take a ``snapshot'' of
their operations from a compliance perspective. This assessment can
be undertaken by outside consultants, law or accounting firms, or
internal staff, with authoritative knowledge of health care
compliance requirements. This ``snapshot,'' often used as part of
benchmarking analyses, becomes a baseline for the compliance officer
and other managers to judge the hospice's progress in reducing or
eliminating potential areas of vulnerability.
\123\ In addition, when appropriate, as referenced in section
G.2, below, reports of fraud or systemic problems should also be
made to the appropriate governmental authority.
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An effective compliance program should also incorporate periodic
(at least annual) reviews of whether the program's compliance elements
have been satisfied, e.g., whether there has been appropriate
dissemination of the program's standards, training, ongoing educational
programs, and disciplinary actions, among other elements.124
This process will verify actual conformance by all departments with the
compliance program and may identify the necessity for improvements to
be made to the compliance program, as well as the hospice's operations.
Such reviews could support a determination that appropriate records
have been created and maintained to document the implementation of an
effective program.125 However, when monitoring discloses
that deviations were not detected in a timely manner due to program
deficiencies, proper modifications must be implemented. Such
evaluations, when developed with the support of management, can help
ensure compliance with the hospice's policies and procedures.
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\124\ One way to assess the knowledge, awareness, and
perceptions of the hospice's employees is through the use of a
validated survey instrument (e.g. employee questionnaires,
interviews, or focus groups).
\125\ Such records should include, but not be limited to, logs
of horline calls, logs of training attendees, training agenda
meaterials, and summaries of corrective action taken and improvments
make to hospice policies as a result of compliance activities.
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As part of the review process, the compliance officer or reviewers
should consider techniques such as:
Visits and interviews of patients at their residences;
Analysis of utilization patterns;
Testing clinical and hospice admission staff on their
knowledge of reimbursement coverage criteria (e.g., present
hypothetical scenarios of situations experienced in daily practice and
assess responses);
Assessment of existing relationships with physicians,
nursing homes,126 hospitals, and other potential referral
sources;
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\126\ See section II.A.3.e.
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Unannounced mock audits and investigations;
[[Page 54045]]
Reevaluation of deficiencies cited in past surveys for
Medicare conditions of participation;
Examination of hospice complaint logs;
Checking personnel records to determine whether any
individuals who have been reprimanded for compliance issues in the past
are among those currently engaged in improper conduct;
Questionnaires developed to solicit impressions of a broad
cross-section of the hospice's employees and staff;
Evaluation of the timeliness of physician referrals and
physician signatures for hospice certifications;
Reviews of clinical documentation (e.g., terminal illness
certification, plan of care, nursing notes, etc.), financial records,
and other source documents that support claims for reimbursement;
Validation of qualifications of hospice physicians and
other hospice staff, including verification of applicable state license
renewals;
Evaluation of written materials and documentation
outlining the hospice's policies and procedures; and
Trend analyses, or longitudinal studies, that uncover
deviations, positive or negative, in specific areas over a given
period.
The reviewers should:
Have the qualifications and experience necessary to
adequately identify potential issues with the subject matter that is
reviewed;
Be objective and independent of line management to the
extent reasonably possible; 127
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\127\ The OIG recognizes that hospices that are small in size
and have limited resources may not be able to use internal reviewers
who are not part of line management or hire outside reviewers.
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Have access to existing audit and health care resources,
relevant personnel, and all relevant areas of operation;
Present written evaluative reports on compliance
activities to the CEO, governing body, and members of the compliance
committee on a regular basis, but no less often than annually; and
Specifically identify areas where corrective actions are
needed.
Just as a hospice is required by its conditions of participation to
conduct ``an ongoing, comprehensive, integrated, self-assessment of the
quality and appropriateness of care provided,'' 128 the OIG
believes that a hospice should monitor its compliance with the Federal
health care program requirements in the same fashion. Furthermore, just
as a hospice is required by its conditions of participation to use its
quality assurance findings to correct identified problems and revise
hospice policies if necessary to improve patient care,129
the OIG believes that a hospice's management should take whatever steps
are necessary to correct identified compliance problems and prevent
them from recurring. In certain cases, subsequent reviews or studies
would be advisable to ensure that the recommended corrective actions
have been implemented successfully.
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\128\ 42 CFR 418.66.
\129\ Id.
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While conducting its monitoring and auditing efforts, as well as
its daily operations, a hospice should document its efforts to comply
with applicable statutes, regulations, and Federal health care program
requirements. For example, where a hospice, in its efforts to comply
with a particular statute, regulation or program requirement, requests
advice from a Government agency (including a Medicare fiscal
intermediary or carrier) charged with administering a Federal health
care program, the hospice should document and retain a record of the
request and any written or oral response. This step is extremely
important if the hospice intends to rely on that response to guide it
in future decisions, actions, or claim reimbursement requests or
appeals. A log of oral inquiries between the hospice and third parties
will help the organization document its attempts at compliance. In
addition, the hospice agency should maintain records relevant to the
issue of whether its reliance was ``reasonable'' and whether it
exercised due diligence in developing procedures and practices to
implement the advice.
The extent of a hospice's audit should depend on the hospice's
identified risk areas and resources. If the hospice comes under
Government scrutiny in the future, the Government will assess whether
or not the hospice developed a comprehensive audit based upon
identified risk areas and resources. If the Government determines the
hospice failed to develop an adequate audit program, given its
resources, the Government will be less likely to afford the hospice
favorable treatment under the Federal Sentencing Guidelines.
F. Enforcing Standards Through Well-Publicized Disciplinary Guidelines
1. Discipline Policy and Actions
An effective compliance program should include guidance regarding
disciplinary action for corporate officers, managers, employees, and
other health care professionals who have failed to comply with the
hospice's standards of conduct, policies and procedures, Federal health
care program requirements, or Federal and State laws, or those who have
otherwise engaged in wrongdoing, which have the potential to impair the
hospice's status as a reliable, honest, and trustworthy health care
provider.
The OIG believes that the compliance program should include a
written policy statement setting forth the degrees of disciplinary
actions that may be imposed upon corporate officers, managers,
employees, physicians, and other health care professionals for failing
to comply with the hospice's standards and policies and applicable
statutes and regulations. Intentional or reckless noncompliance should
subject transgressors to significant sanctions. Such sanctions could
range from oral warnings to suspension, termination, or financial
penalties, as appropriate. Each situation must be considered on a case-
by-case basis to determine the appropriate sanction. The written
standards of conduct should elaborate on the procedures for handling
disciplinary problems and those who will be responsible for taking
appropriate action. Some disciplinary actions can be handled by
department or agency managers, while others may have to be resolved by
a senior hospice administrator. Disciplinary action may be appropriate
where a responsible employee's failure to detect a violation is
attributable to his or her negligence or reckless conduct. Personnel
should be advised by the hospice that disciplinary action will be taken
on a fair and equitable basis. Managers and supervisors should be made
aware that they have a responsibility to discipline employees in an
appropriate and consistent manner.
It is vital to publish and disseminate the range of disciplinary
standards for improper conduct and to educate officers and other
hospice employees regarding these standards. The consequences of
noncompliance should be consistently applied and enforced, in order for
the disciplinary policy to have the required deterrent effect. All
levels of employees should be potentially subject to the same types of
disciplinary action for the commission of similar offenses. The
commitment to compliance applies to all personnel levels within a
hospice. The OIG believes that corporate officers, managers,
supervisors, clinical staff, and other health care professionals should
be held accountable for failing to comply with, or for the foreseeable
failure of their subordinates to adhere to, the applicable standards,
laws, and procedures.
[[Page 54046]]
2. New Employee Policy
For all new employees who have discretionary authority to make
decisions that may involve compliance with the law or compliance
oversight, hospices should conduct a reasonable and prudent background
investigation, including a reference check,130 as part of
every such employment application. The application should specifically
require the applicant to disclose any criminal
conviction,131 as defined by 42 U.S.C. 1320a-7(i), or
exclusion action. Pursuant to the compliance program, hospice policies
should prohibit the employment of individuals who have been recently
convicted of a criminal offense related to health care 132
or who are listed as debarred, excluded, or otherwise ineligible for
participation in Federal health care programs.133 In
addition, pending the resolution of any criminal charges or proposed
debarment or exclusion, the OIG recommends that an individual who is
the subject of such actions should be removed from direct
responsibility for or involvement in any Federal health care program.
That individual's salary should not be paid in whole or part, directly
or indirectly, by Federal health care programs or otherwise with
Federal funds.134 With regard to current employees or
independent contractors, if resolution of the matter results in
conviction, debarment or exclusion, the hospice should terminate its
employment or other contract arrangement with the individual or
contractor.
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\130\ See note 99.
\131\ States may mandate, and many hospices voluntarily conduct,
criminal background checks for prospective employees of hospices.
Identification of a criminal background of an applicant, who may
have been recently convicted of serious crimes that relate to the
proposed employment duties, could be grounds for denying employment.
Further, criminal background screening may deter those individuals
with criminal intent from entering the field of hospice.
\132\ Because providers of hospice care have frequent,
relatively unsupervised access to potentially vulnerable people and
their property, a hospice should also strictly scrutinize whether it
should employ individuals who have been convicted of crimes of
neglect, violence, theft or dishonesty, or financial misconduct.
\133\ Likewise, hospice compliance programs should establish
standards prohibiting the execution of contracts with companies that
have been recently convicted of a criminal offense related to health
care or that are listed by a Federal agency as debarred, excluded or
otherwise ineligible for participation in Federal health care
programs. See note 99.
\134\ Prospective employees who have been officially reinstated
into the Medicare and Medicaid programs by the OIG may be considered
for employment upon proof of such reinstatement.
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G. Responding to Detected Offenses and Developing Corrective Action
Initiatives
1. Violations and Investigations
Violations of a hospice's compliance program, failures to comply
with applicable Federal or State law, and other types of misconduct
threaten a hospice's status as a reliable, honest and trustworthy
provider capable of participating in Federal health care programs.
Detected but uncorrected misconduct can seriously endanger the mission,
reputation and legal status of the hospice. Consequently, upon reports
or reasonable indications of suspected noncompliance, it is important
that the compliance officer or other management officials immediately
investigate the conduct in question to determine whether a material
violation of applicable law or the requirements of the compliance
program has occurred, and if so, take decisive steps to correct the
problem.135 As appropriate, such steps may include an
immediate referral to criminal and/or civil law enforcement
authorities, a corrective action plan,136 a report to the
Government 137 and the return of any overpayments, if
applicable.
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\135\ Instances of noncompliance must be determined on a case-
by-case basis. The existence, or amount, of a monetary loss to a
health care program is not solely determinative of whether or not
the conduct should be investigated and reported to governmental
authorities. In fact, there may be instances where there is no
readily identifiable monetary loss at all, but corrective action and
reporting are still necessary to protect the integrity of the
applicable program and its beneficiaries, e.g., where services
required by a plan of care were not provided.
\136\ Advice from the hospice's in-house counsel or an outside
law firm may be sought to determine the extent of the hospice's
liability and to plan the appropriate course of action.
\137\ The OIG currently maintains a provider self-disclosure
protocol that encourages providers to report suspected fraud. The
concept of voluntary self-disclosure is premised on a recognition
that the Government alone cannot protect the integrity of the
Medicare and other Federal health care programs. Health care
providers must be willing to police themselves, correct underlying
problems and work with the Government to resolve these matters. The
self-disclosure protocol can be located on the OIG's website at
http://www.dhhs.gov/progorg/oig
_____________________________________-
Where potential fraud or False Claims Act liability is not
involved, the OIG recommends that normal repayment channels should be
used for returning overpayments to the Government as they are
discovered. However, even if the overpayment detection and return
process is working and is being monitored by the hospice's audit or
billing divisions, the OIG still believes that the compliance officer
needs to be made aware of these overpayments, violations or deviations
that may reveal trends or patterns indicative of a systemic problem.
Depending upon the nature of the alleged violations, an internal
investigation will probably include interviews and a review of relevant
documents. Some hospices should consider engaging outside counsel,
auditors or health care experts to assist in an investigation. Records
of the investigation should contain documentation of the alleged
violation, a description of the investigative process (including the
objectivity of the investigators and methodologies utilized), copies of
interview notes and key documents, a log of the witnesses interviewed
and the documents reviewed, the results of the investigation, e.g., any
disciplinary action taken, and the corrective action implemented. While
any action taken as the result of an investigation will necessarily
vary depending upon the hospice and the situation, hospices should
strive for some consistency by utilizing sound practices and
disciplinary protocols.138 Further, after a reasonable
period, the compliance officer should review the circumstances that
formed the basis for the investigation to determine whether similar
problems have been uncovered or modifications of the compliance program
are necessary to prevent and detect other inappropriate conduct or
violations.
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\138\ The parameters of a claim review subject to an internal
investigation will depend on the circumstances surrounding the
issue(s) identified. By limiting the scope of an internal audit to
current billing, a hospice may fail to discover major problems and
deficiencies in operations, as well as be subject to certain
liability.
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If an investigation of an alleged violation is undertaken and the
compliance officer believes the integrity of the investigation may be
at stake because of the presence of employees under investigation,
those subjects should be removed from their current work activity until
the investigation is completed (unless an internal or Government-led
undercover operation known to the hospice is in effect). In addition,
the compliance officer should take appropriate steps to secure or
prevent the destruction of documents or other evidence relevant to the
investigation. If the hospice determines that disciplinary action is
warranted, it should be prompt and imposed in accordance with the
hospice's written standards of disciplinary action.
2. Reporting
If the compliance officer, compliance committee, or management
official discovers credible evidence of misconduct from any source and,
after a reasonable inquiry, has reason to
[[Page 54047]]
believe that the misconduct may violate criminal, civil, or
administrative law, then the hospice should promptly report the
existence of misconduct to the appropriate Federal and State
authorities 139 within a reasonable period, but not more
than 60 days 140 after determining that there is credible
evidence of a violation.141 Prompt reporting will
demonstrate the hospice's good faith and willingness to work with
governmental authorities to correct and remedy the problem. In
addition, reporting such conduct will be considered a mitigating factor
by the OIG in determining administrative sanctions (e.g., penalties,
assessments and exclusion), if the reporting provider becomes the
target of an OIG investigation.142
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\139\ Appropriate Federal and State authorities include the
Office of Inspector General of the Department of Health and Human
Services, the Criminal and Civil Divisions of the Department of
Justice, the U.S. Attorney in relevant districts, the Federal Bureau
of Investigation and the other investigative arms for the agencies
administering the affected Federal or State health care programs,
such as the State Medicaid Fraud Control Unit, the Defense Criminal
Investigative Service, the Department of Veterans Affairs and the
Office of Personnel Management (which administers the Federal
Employee Health Benefits Program).
\140\ In contrast, to qualify for the ``not less than double
damages'' provision of the False Claims Act, the report must be
provided to the Government within 30 days after the date when the
hospice first obtained the information. 31 U.S.C. 3729(a).
\141\ The OIG believes that some violations may be so serious
that they warrant immediate notification to governmental
authorities, prior to, or simultaneous with, commencing an internal
investigation, e.g., if the conduct: (1) is a clear violation of
civil fraud or criminal law; (2) has a significant adverse effect on
the quality of care provided to program beneficiaries (in addition
to any other legal obligations regarding quality of care); or (3)
indicates evidence of a systemic failure to comply with applicable
laws or an existing corporate integrity agreement, regardless of the
financial impact on Federal health care programs.
\142\ The OIG has published criteria setting forth those factors
that the OIG takes into consideration in determining whether it is
appropriate to exclude a health care provider from program
participation pursuant to 42 U.S.C. 1320a-7(b)(7) for violations of
various fraud and abuse laws. See 62 FR 67392 (December 24, 1997).
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When reporting misconduct to the Government, a hospice should
provide all evidence relevant to the alleged violation of applicable
Federal or State law(s) and potential cost impact. The compliance
officer, under advice of counsel, and with guidance from the
governmental authorities, could be requested to continue to investigate
the reported violation. Once the investigation is completed, the
compliance officer should be required to notify the appropriate
governmental authority of the outcome of the investigation, including a
description of the impact of the alleged violation on the operation of
the applicable health care programs or their beneficiaries. If the
investigation ultimately reveals that criminal, civil or administrative
violations have occurred, the appropriate Federal and State authorities
143 should be notified immediately.
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\143\ See note 139.
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As previously stated, the hospice should take appropriate
corrective action, including prompt identification of any overpayment
to the affected payor and the imposition of proper disciplinary action.
If potential fraud or violations of the False Claims Act are involved,
any repayment of the overpayment should be made as part of the
discussion with the Government following a report of the matter to law
enforcement authorities. Otherwise, normal repayment channels should be
used for repaying identified overpayments.144 Failure to
disclose overpayments within a reasonable period of time could be
interpreted as an intentional attempt to conceal the overpayment from
the Government, thereby establishing an independent basis for a
criminal violation with respect to the hospice, as well as any
individuals who may have been involved.145 For this reason,
hospice compliance programs should emphasize that overpayments obtained
from Medicare or other Federal health care programs should be promptly
disclosed and returned to the payor that made the erroneous payment.
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\144\ A hospice should consult with its Medicare fiscal
intermediary or HCFA for any further guidance regarding normal
repayment channels. The hospice's Medicare fiscal intermediary or
HCFA may require certain information (e.g., alleged violation or
issue causing overpayment, description of the internal investigative
process with methodologies used to determine any overpayments,
disciplinary actions taken and corrective actions taken, etc.) to be
submitted with return of any overpayments, and that such repayment
information be submitted to a specific department or individual.
Interest will be assessed, when appropriate. See 42 CFR 405.376.
\145\ See 42 U.S.C. 1320a-7b(a)(3).
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The OIG believes all hospices, regardless of size, should ensure
they are reporting the results of any overpayments or violations to the
appropriate entity and taking the appropriate corrective action to
remedy the identified deficiency.
III. Assessing the Effectiveness of a Compliance Program
Because the Government views the existence of a compliance program
as a mitigating factor when determining culpability regarding
allegations of fraud and abuse only if the compliance program is
``effective,'' how a hospice may assess its compliance program becomes
quite significant. A hospice, as well as any other type of health care
provider, should consider the attributes of each individual element of
its compliance program to assess the program's ``effectiveness'' as a
whole. Examining the comprehensiveness of policies and procedures
implemented to satisfy these elements is merely the first step.
Evaluating how a compliance program performs during a provider's day-
to-day operations becomes the critical indicator.146
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\146\ Evaluation may be accomplished through techniques such as
employee surveys, management assessments and periodic review of
benchmarks established for audits, investigations, disciplinary
action, overpayments and employee feedback. All elements of an
organization's compliance program can be evaluated, including
policies, training, practices and compliance personnel.
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As previously stated, a compliance program should require the
development and distribution of written compliance policies, standards
and practices that identify specific areas of risk and vulnerability to
a hospice. One way to judge whether these policies, standards and
practices measure up is to observe how an organization's employees
react to them. Do employees consistently experience recurring pitfalls
because they lack guidance on certain issues not adequately covered in
company policies? Are employees flagrantly disobeying an organization's
standards of conduct because they observe no sincere buy-in from senior
management? Do employees have trouble understanding policies and
procedures because they are written in legalese or at difficult reading
levels? Does an organization routinely experience systematic billing
failures because employees are ill-instructed how to implement written
policies and practices? Written compliance policies, standards and
practices are only as good as an organization's commitment to apply
them in practice.
Every hospice should designate a compliance officer or contact to
serve as the focal point of compliance activities, and, if appropriate,
a compliance committee to advise and assist the compliance officer. An
organization needs to seriously consider whoever fills such integral
roles and periodically monitor how the individuals chosen satisfy their
responsibilities. Does a compliance officer have sufficient
professional experience working with billing, clinical records,
documentation, and auditing principles to perform assigned
responsibilities fully? Has a compliance officer or compliance
committee been negligent in ensuring an organization's compliance due
to inadequate funding, staff, and authority necessary to carry out
their jobs? Did
[[Page 54048]]
adding the compliance officer function to a key management position
with other significant duties compromise the goals of the compliance
program (e.g., chief financial officer who discounts certain
overpayments identified to improve the company's bottom line profits)?
Since a compliance officer and a compliance committee can potentially
have a significant impact on how effectively a compliance program is
implemented, those functions should not be taken for granted.
As evidenced throughout this guidance, the proper education and
training of corporate officers, managers, health care professionals and
other applicable employees of a provider, and the continual retraining
of current personnel at all levels, are significant elements of an
effective compliance program. Accordingly, such efforts should be
routinely evaluated. Are employees trained frequently enough? Do
employees fail post-training tests that evaluate knowledge of
compliance? Do training sessions and materials adequately summarize
important aspects of the organization's compliance program, such as
fraud and abuse laws, Federal health care program requirements, and
claim development and submission processes? Are training instructors
qualified to present the subject matter and experienced enough to duly
field questions? When thorough compliance training is periodically
conducted, employees receive the reinforcement they need to ensure an
effective compliance program.
An open line of communication between the compliance officer and a
provider's employees is equally important to the success of a
compliance program. In today's intensive regulatory environment, the
OIG believes that a provider cannot possibly have an effective
compliance program if it receives minimal or no feedback from its
employees regarding compliance matters. For instance, if a compliance
officer does not receive appropriate inquiries from employees: Do
policies and procedures fail to adequately guide employees to whom and
when they should be communicating compliance matters? Do employees fear
retaliation if they report misconduct? Are employees reporting issues
not related to compliance through the wrong channels? Do employees have
bad-faith, ulterior motives for reporting? Regardless of the means that
a provider employs, whether it be telephone hotline, email, or
suggestion boxes, employees should seek clarification from compliance
staff in the event of any confusion or question dealing with compliance
policies, practices or procedures.
An effective compliance program should include guidance regarding
disciplinary action for corporate officers, managers, health care
professionals and other employees who have failed to adhere to an
organization's standards of conduct, Federal health care program
requirements or Federal or State laws. The number and caliber of
disciplinary actions taken by an organization can be insightful. Have
appropriate sanctions been applied to compliance misconduct? Are
sanctions applied to all employees consistently, regardless of an
employee's level in the corporate hierarchy? Have double-standards in
discipline bred cynicism among employees? When disciplinary action is
not taken seriously or applied haphazardly, such practices reflect
poorly on senior management's commitment to foster compliance as well
as the effectiveness of an organization's compliance program in
general.
Another critical component of a successful compliance program is an
ongoing monitoring and auditing process. The extent and frequency of
the audit function may vary depending on factors such as the size and
available resources, prior history of noncompliance, and risk factors
of a particular hospice. The hallmark of effective monitoring and
auditing efforts is how an organization determines the parameters of
its reviews. Do audits focus on all pertinent departments of an
organization? Does an audit cover compliance with all applicable laws
and Federal health care program requirements? Are results of past
audits, pre-established baselines or prior deficiencies reevaluated?
Are the elements of the compliance program monitored? Are auditing
techniques valid and conducted by objective reviewers? The extent and
sincerity of an organization's efforts to confirm its compliance often
proves to be a revealing determinant of a compliance program's
effectiveness.
As was expressed in the last section of this guidance, it is
essential that the compliance officer or other management officials
immediately investigate reports or reasonable indications of suspected
noncompliance. If a material violation of applicable law or compliance
program requirements has occurred, a provider must take decisive steps
to correct the problem. Providers who do not thoroughly investigate
misconduct leave themselves open to undiscovered fraud, waste and
abuse. When a provider learns of certain issues, does it knowingly
disregard associated legal exposure? Is there a consistent and
methodical approach to the correlation between compliance issues
identified and the corrective action necessary to remedy? Are isolated
overpayment matters properly resolved through normal repayment
channels? Is credible evidence of misconduct that may violate criminal,
civil or administrative law promptly reported to the appropriate
Federal and State authorities? If any step in this process of
responding to detected offenses is circumvented or improperly handled,
such conduct would most likely demonstrate an ineffective compliance
program, as well as potentially result in criminal, civil or
administrative liability.
Documentation is the key to demonstrating the effectiveness of a
provider's compliance program. For example, documentation of the
following should be maintained: audit results; logs of hotline calls
and their resolution; corrective actions plans; due diligence efforts
regarding business transactions; records of employee training,
including the number of training hours; disciplinary action; and
modification and distribution of policies and procedures. Given that
the OIG is encouraging self-disclosure of overpayments and billing
irregularities, maintaining a record of disclosures and refunds to the
health care programs is strongly endorsed. A documented practice of
refunding of overpayments and self-disclosing incidents of non-
compliance with Federal health care program requirements can serve as
evidence of a meaningful compliance effort by a hospice.
Hospices, as well as all health care providers, should acknowledge
that it is their responsibility to formulate policies, procedures, and
practices that are tailored to their own operations, and that are
comprehensive enough to ensure compliance with all applicable Federal
health care program requirements. An organization is in the best
position to validate the suitability of its compliance efforts based
upon its own particular circumstances.
IV. Conclusion
Through this document, the OIG has attempted to provide a
foundation to the process necessary to develop an effective and cost-
efficient hospice compliance program. As previously stated, however,
each program must be tailored to fit the needs and resources of an
individual hospice, depending upon its particular corporate structure,
mission and employee composition. The statutes, regulations and
guidelines of the Federal and State health insurance
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programs, as well as the policies and procedures of the private health
plans, should be integrated into every hospice's compliance program.
The OIG recognizes that the health care industry in this country,
which reaches millions of beneficiaries and expends about a trillion
dollars annually, is constantly evolving. The time is right for
hospices to implement a strong voluntary health care compliance
program. As stated throughout this guidance, compliance is a dynamic
process that helps to ensure that hospices and other health care
providers are better able to fulfill their commitment to ethical
behavior, as well as meet the changes and challenges being imposed upon
them by Congress and private insurers. Ultimately, it is OIG's hope
that a voluntarily created compliance program will enable hospices to
meet their goals, improve the quality of patient care, and
substantially reduce fraud, waste and abuse, as well as the cost of
health care to Federal, State and private health insurers.
Dated: September 29, 1999.
June Gibbs Brown,
Inspector General.
[FR Doc. 99-25787 Filed 10-4-99; 8:45 am]
BILLING CODE 4150-04-P