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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued draft guidance in July to assist hospice providers in designing effective voluntary compliance programs to prevent fraud, waste, and abuse in government health programs, including Medicare and Medicaid.
While all OIG compliance programs are optional, the guidelines place hospice providers on notice about potential violations and provide a laundry list of investigators concerns, including:
— uninformed consent to elect the Medicare hospice benefit;
— admitting patients to hospice who are not terminally ill;
— falsified medical records or plans of care;
— hospice incentives to actual or potential referral sources, such as physicians, nursing homes, hospitals, etc.;
— overlap in services that a nursing home provides, which result in insufficient care provided by a hospice to a nursing home resident; (See related story on p. 121.)
— improper relinquishment of core services and professional management responsibilities to nursing homes, volunteers, and privately paid professionals;
— billing for higher level of services than necessary;
— billing for hospice care provided by unqualified or unlicensed clinical personnel;
— inadequate management and oversight of subcontracted services, which result in improper billing. (For a complete list of OIG concerns, see box on p. 119.)
"The most important aspect of our prevention efforts is the development of voluntary compliance guidance that will help the health care industry understand the government’s expectations for a well-run program," says Inspector General June Gibbs Brown. "Compliance efforts should focus on establishing a culture within a hospice that promotes the prevention, detection, and resolution of instances of conduct that don’t conform with the law, regulatory requirements, or a provider’s internal standards and policies. Over time, an effective compliance program should become part of the fabric of a hospice’s routine operations."
Following the voluntary guidelines and implementing a compliance program will go a long way to prove that federal regulations have been followed in good faith and that any billing mistakes were the result of human error rather than malice. Hospices that find themselves to the subject of federal scrutiny will find that a working compliance program will go a long way to swaying the opinion of investigators, says David Queen, JD, a Baltimore-based attorney who handles fraud cases for home health and hospice providers.
The National Hospice Organization (NHO), based in Arlington, VA, favors controls that ensure compliance with government regulations. But it expressed concern that the OIG guidance casts a shadow of criminal behavior among hospices, and many hospices lack the resources to implement an extensive compliance program.
"NHO is also concerned that a large number of hospices will find it very difficult to devote significant additional resources or to re-allocate already meager and stretched resources necessary to implement the extensive compliance program detailed in the guidelines," wrote NHO President Karen Davie in an Aug. 19 letter.
Similar to other guidance already issued by the OIG for clinical laboratories, hospitals, home health agencies, third-party medical billing companies, and durable medical equipment (DME) suppliers, the draft hospice guidance is based on the following seven elements:
1. Implementation of written policies, procedures, and standards of conduct.
2. Designation of a compliance officer.
3. Development of training and education programs.
4. Creation of a hotline or other measures for receiving complaints and procedures for protecting callers from retaliation.
5. Performance of internal audits to monitor compliance.
6. Enforcement of standards through well-publicized disciplinary directives.
7. Prompt corrective action of detected offenses.
Those elements, according to OIG, should represent the basic structure of a hospice’s compliance program. In its proposed guidelines, OIG offers a detailed explanation of each element and how these items should be implemented.
• Written policies and procedures. Standards must communicate to all affected employees, hospice agents and contractors, such as physicians and therapists, the hospice’s commitment to comply with federal and state standards. There should be a particular emphasis on preventing fraud and abuse.
OIG recommends that hospices creating a compliance program include appropriate training and educational programs to avoid the risk areas listed above, such as uniformed consent and improper admission.
In addition, OIG states that policies must create a mechanism for billing staff to communicate effectively with the clinical staff. Policies and procedures should include:
— timely documentation of clinical factors that qualify a patient for the Medicare hospice benefit;
— instruction on who has the authority to make entries in the patient record;
— emphasis on admission only when documentation supports the applicable reimbursement eligibility criteria;
— provide an indication that the diagnosis and procedure codes for hospice services reported on the reimbursement claim are based on a patient’s clinical condition as reflected in the medical chart and other documentation.
A provision that compensation for hospice billing and admission staff not include any incentive to bill for hospice care regardless if proper criteria is met.
OIG recommends hospices create oversight mechanisms to verify terminal illness and eligibility for the Medicare hospice benefit, as well as providing documentation of factors the prove eligibility. If the OIG or fiscal intermediary questions whether a patient is terminally ill, the hospice will be requested to provide information necessary to prove terminal illness.
• Designation of a compliance officer. Every hospice should designate a compliance officer, according to the guidelines. The hospice compliance officer will be responsible for being the focal point of the organization’s compliance activities. Primary responsibilities include:
— oversight of the compliance program;
— routinely reporting to the hospice governing body, top administrator and compliance committee on the progress of program implementation;
— revising the program as needed;
— reviewing employees’ certifications and gauging their understanding of compliance standards and conduct;
— developing training programs to make employees and contractors aware of potential fraud and abuse;
— independently investigate and act upon compliance-related matters.
Hospice compliance officers take on various shapes, ranging from a full-time equivalent position to an added responsibility placed upon an existing job position. The OIG is aware that small hospices may not have the resources to hire a full-time compliance officer. Instead, the OIG is more focused on the authority of the employee given the task of monitoring compliance. The designated compliance officer must have the appropriate authority critical to the success of the compliance program. That means the assigned compliance officer should be allowed to review documents, such as the patient record and scrutinize financial arrangements with other providers.
Queen says the compliance officer should be a high-level official in the organization with direct access to the president and CEO, its governing body, senior management, and legal counsel. While seemingly logical, providers should avoid using people with accounting backgrounds to monitor compliance programs. While accounting skills are valuable, Queen says, they represent a small portion of overall job responsibilities. Instead, compliance chiefs should have a human relations background that includes management skills.
Let it all be heard
The OIG also wants to see hospices form compliance committees. A compliance committee should advise the compliance officer and assist in the implementation of the compliance program. The committee should be made up of employees in various positions within the hospice.
The benefit of compliance committee, according to the OIG, is that it allows for the various perspectives of those holding different responsibilities within a hospice to be heard. In addition, members of the committee should be senior managers who have the ability to make necessary changes within their own departments that have been agreed upon by the compliance committee.
• Developing effective lines of communication. To create an atmosphere that is sensitive to potential fraud and abuse, hospices must be able to open the lines of communications between employees and compliance officers. OIG recommends written polices that forbid retaliation and ensure confidentiality be developed and distributed to all employees.
"The OIG encourages the establishment of a procedure so the 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," Brown wrote.
In addition, the OIG recommends that hotlines and other forms of communication be established in order to root out fraud and abuse. "The OIG encourages the use of hotlines, e-mails, written memos, newsletters, suggestion boxes, and other forms of information exchange to maintain these open lines of communication," Brown wrote. "If the hospice establishes a hotline, the telephone number should be readily available to all employees and independent contractors."
The OIG recognizes that small hospices don’t have the necessary resources to establish a telephone hotline. Instead, those smaller organizations should consider other alternatives, such as outsourcing the hotline or establishing a written method of confidential disclosure.
Hospices should also employ the practice of exit interviews for departing employees as a way of discovering potential fraud and abuse, Brown says.
• Auditing and monitoring. An effective compliance program should incorporate thorough monitoring of its implementation and regular reporting to senior hospice or corporate managers. Reporting of compliance activities should go outside hospice leadership if a hospice is owned by larger organization, and appropriate reports should be provided and explained to the parent organization.
According to OIG, an effective tool for monitoring compliance programs is periodic compliance audits by internal or external auditors who have expertise in federal and state health laws and regulations.
Audits should focus on a hospice’s programs and relationships with external providers. At a minimum, OIG is concerned that hospices check for potential kickback arrangements, problems in claim development and submission, reimbursement, eligibility, and marketing.
"The audits and reviews should inquire into the hospice’s compliance with Medicare conditions of participation and the specific rules and policies that have been the focus of particular attention on the part of the fiscal intermediaries or carriers, and law enforcement, as evidenced by educational and other communications from the OIG Special Fraud Alerts, OIG audits and evaluations, and law enforcement initiatives," Brown wrote. "In addition, the hospice should focus on areas of concern that are specific to the individual hospice and have been identified by any entity, whether federal, state or internal."
Among the techniques OIG recommends are:
— patient interviews in their homes;
— testing clinical and billing staff on their knowledge reimbursement coverage criteria;
— mock audits and investigations;
— re-evaluation of deficiencies from past audits;
— regular review of clinical documentation and source documents;
— trend analyses that detect deviations in specific areas over a given time period.
• Enforcing standards through well-publicized disciplinary guidelines. An effective compliance program will include clear disciplinary guidelines for officers, managers, and employees who violate policies and standards of conduct. The OIG says that compliance programs for all health care settings need to set forth the degrees of disciplinary action and ensure that workers are aware of the consequences of illegal or unethical behavior.
"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," Brown wrote. "The consequence of noncompliance should be consistently applied and enforced in order for the disciplinary policy to have the required deterrent effect."
• Respond to detected offenses. Detected but uncorrected misconduct can have detrimental effect, including legal problems for a hospice. Prompt reporting of violations will demonstrate good faith and show that the hospice is willing to work with governmental authorities to remedy the problem. According to Brown, reasonable reporting should take place no later than 60 days after an internal inquiry determines enough evidence exists to prove misconduct.
Judging program’s effectiveness
The draft hospice guidance also includes information on how to assess the effectiveness of a compliance program. The government views the existence of a compliance program as a mitigating factor in fraud and abuse cases only if the compliance program is effective.
"Documentation is key to demonstrating the effectiveness of a provider’s compliance program," warns the OIG. That includes documentation for audit results, hotline calls and their resolution, due diligence efforts of business transactions, employee training, disciplinary actions, as well as distribution of policies and procedures. The documented practice of refunding overpayments and self-disclosing incidents of non-compliance with federal health care program requirements can also provide evidence of an effective compliance program."