To:       NHPCO Members
From:   NHPCO Regulatory Team
Re:       July 21, 2011

OIG’s Continued Focus on Medicare-Certified Hospices Serving Nursing Facility Residents

On July 19, 2011 the Office of Inspector General (OIG) released a report on Medicare Hospices that Focus on Nursing Facility Residents (OEI-02-10-00070).  A podcast on the topic was also posted on the OIG website that features an interview with an OIG Inspector General for Evaluation and Inspections.  NHPCO would like to advise members that our Health Policy Team is analyzing the report findings , as we have diligently done in the past, and will use this information to inform our advocacy strategy,  and add to our existing regulatory resources and educational materials that promote the delivery of high quality care to individuals who are medically eligible to receive hospice services.   NHPCO reiterates our commitment to the provision of high-quality hospice and palliative care for all eligible individuals, regardless of, and across, all care settings.  With one in four Americans likely to die in a nursing home, it is more important than ever that hospice remain an option for those who are medically eligible for care. NHPCO strongly supports continued access to hospice for individuals who live in nursing homes – they deserve the expertise and care that hospice teams provide.  For members interested in learning more about the issues raised in the recent OIG communications, NHPCO offers the following summary as well as links to related resources. Background:  Over the last few years, the OIG has prepared a number of reports on hospice care in the nursing home.  This latest report addresses the growth in hospice care from 2005 to 2009 and focuses on the number of hospices that served a high percentage of nursing facility residents in 2009.  The OIG also states that companion reports, identified in the 2011 OIG Work Plan, will assess marketing practices and the business relationships between hospices and nursing facilities. Medicare spending on hospice care for nursing facility residents has grown 69% since 2005. The OIG noted that total Medicare spending for hospice care for nursing facility residents grew by 69%from 2005 to 2009, increasing from $2.55 billion to $4.31 billion. At the same time, the number of hospice beneficiaries in nursing facilities increased by 40%.  OIG reports the following about Medicare hospice beneficiaries in nursing facilities: 

• Over 50% of hospices had at least 25% of their beneficiaries in nursing facilities.
• 19% had more than 50% in nursing facilities.
• Almost 8% of all hospices had 66% or more of their Medicare beneficiaries in nursing facilities – 263 hospices, now referred to as “high-percentage hospices” (a new OIG term).

Identifying high-percentage hospices:  The OIG identified hospices where two-thirds or more of their beneficiaries were served in nursing facilities as “high-percentage hospices.”  Thirty-seven percent of “high-percentage” hospices are located in 4 states:

• Iowa
• Massachusetts
• Ohio
• Pennsylvania

While different provider types were represented in the analysis, the OIG indicated that high percentage hospices were more likely to be for-profit. Payments and length of stay:  The OIG noted that Medicare paid $3,182 more per beneficiary for beneficiaries served by high-percentage hospices.  The median length of stay in hospice care for those beneficiaries served by a high-percentage hospice was three weeks longer than the typical Medicare hospice patient – 52 days compared to 31 days. Diagnoses served by high-percentage hospices:  OIG analysis of the claims data showed that high-percentage hospices served beneficiaries who the OIG determined to have diagnoses that required less complex care and already lived in nursing facilities, such as dementia, adult failure to thrive, senility and unspecified debility.  This group of diagnoses accounted for over half (51%) of all beneficiaries served by high-percentage hospices, compared to 32% of beneficiaries served by all hospices.  Location of beneficiaries before electing hospice care:  The OIG reports found that almost 90% of beneficiaries in nursing facilities that received care from high-percentage hospices were residents of those facilities before electing hospice care in 2009. In comparison, 79% of beneficiaries receiving care from all hospices were nursing home residents before they elected hospice care. OIG Recommendations to CMS:

1. Monitor hospices that depend heavily on nursing facility residents. CMS should target its monitoring efforts on hospices with a high percentage of beneficiaries in nursing facilities and should closely examine whether these hospices are meeting Medicare requirements. CMS Response:  CMS will share in the information in this report with Recovery Audit Contractors (RAC) and Medicare Administrative Contractors (MAC). RACs review Medicare claims on a post-payment basis to identify inappropriate payments. CMS will emphasize to MACs the importance of this issue when prioritizing their medical review strategies or other interventions.  
2. Modify the payment system for hospice care in nursing facilities. Medicare currently pays hospices the same rate for care provided in nursing facilities as it does for care provided in other settings, such as private homes. According to the OIG, the current payment structure provides incentives for hospices to seek out beneficiaries in nursing facilities, who often receive longer but less complex care. To lessen this incentive, the OIG recommends that CMS reduce Medicare payments for hospice care provided in nursing facilities, seeking statutory authority, if necessary. Unlike private homes, nursing facilities are staffed with professional caregivers and are often paid by third-party payers, such as Medicaid. These facilities are required to provide personal care services, which are similar to hospice aide services that are paid for under the hospice benefit. CMS Response:  CMS agreed that there may be incentives to seek out beneficiaries in nursing facilities in the current payment structure. CMS is in the early stages of payment reform and intends to analyze a variety of data and information on patient resource use by site, length of stay and patient characteristics. 

NHPCO commitment: The OIG’s attention was anticipated, and NHPCO emphasizes the importance of full regulatory compliance by all providers, however, NHPCO remains committed to the provision of hospice and palliative care in the nursing home and suggests that regulators be attuned to unintended consequences that might put unnecessary barriers in place to Americans in need of care at the end of life. NHPCO calls for all providers to comply with and exceed NHPCO’s Standards of Practice for Hospice Programs, participate in its Quality Partners initiative, utilize the outcome measure tools NHPCO makes available, and fully comply with all industry regulations.  NHPCO also reiterates its willingness to work collaboratively with regulators and providers on issues involving access, reimbursement and issues of compliance. A final observation from NHPCO: This recent OIG communication drew attention to outliers in the field, yet this serves as a valuable reminder to all providers about the importance of compliance and the need to continually work towards the highest level of operation in our shared mission to provide the best care possible at the end of life.

-###-