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CMS Announces Intentions of Reducing Medicare Payments for Hospice Patients Residing in Nursing Facilities

According to a new report released by The Department of Health and Human Services Office of the Inspector General (HHS OIG), hospice companies have quickly expanded their services to patients residing in nursing homes. HHS OIG found that total Medicare spending for hospice care for nursing home residents had grown by nearly 70 percent between 2005 and 2009. In addition, the number of hospice beneficiaries in nursing facilities has increased by 40 percent during that same time period. The report also found that 263 hospices (nearly 8 percent of all hospices) had two-thirds or more of their Medicare beneficiaries residing in nursing homes, referred to in the report as “high-percentage hospices.” Moreover, high-percentage hospices were paid an average of $3,182 more per beneficiary by Medicare. Also, high-percentage hospice beneficiaries received hospice services nearly three weeks longer than beneficiaries served by hospices overall, and the costs to high-percentage hospices were much lower due to patients requiring less services because they are already receiving similar services from the nursing facilities.

In connection with the Inspector General’s recommendation, the Centers for Medicare and Medicaid Services (CMS) has announced that it is making an effort to reduce its Medicare payments for hospice patients residing in nursing facilities. As a result, hospice providers will likely see increased audits in this area, with a specific focus on skilled nursing facility referrals. If you are a hospice provider and need assistance in preparing or defending against an audit, or seek assistance with creating a compliance program to minimize audit risk, please contact a Wachler & Associates attorney at 248-544-0888.