United States: OIG – Medicare Hospices Have Financial Incentives To Provide Care In Assisted Living Facilities

Last Updated: January 15 2015
Article by Ari Markenson

On January 14, 2015, the U.S. DHHS Inspector General's Office (the "OIG") released a report (OEI-02-14-00070) entitled "Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities."

The report is significant as a road map to the issues the OIG has been concerned with relating to Medicare hospice services provided to beneficiaries in assisted living and other institutional settings. The OIG continues to be concerned with long length of stay patients, patients with diagnoses of ill-defined conditions, such as failure to thrive or unspecified debility, and its perception of the inappropriate incentives that may exist with payments for services relating to these types of patients.

The OIG advises that the conclusions of the report raise concern about the financial incentives that might be created by the current Medicare hospice payment system and the potential for hospices to target beneficiaries in ALFs because they may offer the hospices the greatest financial gain.

The report discusses several significant findings, these findings include:

  • Medicare payments for hospice care in ALFs more than doubled in 5 years, totaling $2.1 billion in 2012. The OIG looked at data from 2007 through 2012. According to the OIG, Medicare paid $2.1 billion for hospice care provided in ALFs in 2012, an increase of 119 percent since 2007. During that time, Medicare spending for hospice care provided in settings other than ALFs increased 38 percent, from $9.3 billion to $12.9 billion.
  • Hospices provided care much longer and received much higher Medicare payments for beneficiaries in ALFs than for beneficiaries in other settings. According to the OIG, hospices provided care to beneficiaries in ALFs much longer than to beneficiaries in any other setting. Beneficiaries in ALFs received hospice care for a median of 98 days, which is almost twice as long as that received by beneficiaries in nursing facilities and more than twice as long as that received by beneficiaries at hom Thirty-six percent of beneficiaries in ALFs spent more than 180 days in hospice care, compared to 28 percent of beneficiaries in nursing facilities and 22 percent of beneficiaries at home. Eighteen percent of beneficiaries in ALFs received hospice care for more than a year. In comparison, 14 percent of beneficiaries in nursing facilities and 10 percent of beneficiaries at home received hospice care for more than a year. Five percent of beneficiaries in ALFs received hospice care for 2 years or more. The median amount Medicare paid for hospice care provided from 2007 through 2012 to beneficiaries in ALFs was $16,195, more than twice as much as the median amounts for beneficiaries in nursing facilities and beneficiaries at home.
  • Hospice beneficiaries in ALFs often had diagnoses that usually require less complex care. The OIG found that 60 percent of beneficiaries who received care primarily in ALFs had diagnoses of ill-defined conditions, mental disorders, or Alzheimer's disease as their terminal illness. Mental disorders include dementia. Ill- defined conditions include, among other things, adult failure to thrive, senility without psychosis, and unspecified debility. Beneficiaries with these types of diagnoses typically receive less complex hospice care than beneficiaries with other diagnoses. Beneficiaries in ALFs were six times more likely to have these diagnoses than a diagnosis of cancer. Beneficiaries in ALFs were more than twice as likely as beneficiaries in the home to have one of these diagnoses.
  • Hospices typically provided fewer than 5 hours of visits and were paid about $1,100 per week for each beneficiary receiving routine home care in ALFs. The OIG found that routine home care accounted for nearly all the care hospices provided in ALFs in 2012. Hospices billed for routine home care for 99 percent of the days they provided care in ALFs during the year. Hospices provided an average of 4.8 hours of visits per week to these beneficiaries. These visits ranged from 0 to 66 hours per week. Most hospice visits in ALFs were from aides. On average, of the 4.8 hours of visits per week to beneficiaries, 2.8 hours were for hospice aide services, 1.7 hours were for nursing services, and 0.3 hours were for medical social services. 80 percent of beneficiaries were not provided hospice physician services while they were in ALFs other than supervisory and/or care planning services.

To conduct its study of hospice services in Assisted Living Facilities, the OIG took a look at claims data from 2007 to 2012, cost reports and provider enrollment data. It defined long length of stay patients as those patients who received care between 180 and 365 days and more than 365 days.

Following its conclusions in the report, the OIG recommends to CMS that it (1) reform the hospice payment system to reduce incentives for hospices to target beneficiaries with certain diagnoses and those likely to have long stays, (2) target certain hospices for review, (3) develop and adopt claims-based measures of quality, (4) make hospice data publicly available for beneficiaries, and (5) provide additional information to hospices to educate them about how they compare to their peers. CMS concurred with all five recommendations.

Medicare hospice providers have experienced an increase in scrutiny relating to hospice patient who reside in institutions. This report will provide further justification for that increase. Providers can expect additional and significant scrutiny of long length of stay patients and whether or not beneficiaries with diagnoses of ill-defined conditions are ultimately eligible for the hospice benefit.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions