Wachler & Associates Health Law BlogDangers of PPEO Audits
Medicare-enrolled hospice providers are under increasingly close scrutiny. Due to concerns regarding hospice compliance and with fraud, waste, and abuse by hospice providers, both the Centers for Medicare & Medicaid Services (“CMS”) and the Department of Health and Human Services Office of Inspector General (“OIG”) have stepped up audits, investigations, and enforcement actions against hospice providers. One of these measures are Provisional Period of Enhanced Oversight (“PPEO”) audits of Medicare-enrolled hospices. Providers should be aware that the stakes in a PPEO audit can be unexpectedly high, while the margin for error unexpectedly low.
CMS implemented PPEO audits as a direct response to concerns regarding hospice fraud and compliance issues. Pursuant to the PPEO program, since mid-2023, CMS audits all “newly-enrolled” hospice providers in Arizona, California, Nevada, and Texas. “Newly-enrolled” is not limited to hospice providers enrolling in Medicare for the first time, but also includes those that undergo a Change of Ownership (“CHOW”) as that term is defined under the Medicare program, those that undergo a 100% change in ownership, and those reactivating Medicare enrollment after being in a deactivated status.
PPEO audits have been compared to Targeted Probe and Educate (“TPE”) audits because, like a TPE audit, a PPEO audit can include multiple rounds of review between which the provider may receive education and an opportunity to address the issue or issues identified by the review. However, this comparison only goes so far and in practice TPE and PPEO are often very different. TPE generally consists of three rounds of review, occasionally four, and the contractor conducting the review is required by CMS rules to offer education to the provider and to wait between rounds of review to give the provider a chance to implement changes and address any issues that have been identified. Further, under TPE, providers are generally not referred to CMS for sanctions until they have failed three consecutive rounds of review by demonstrating consistently high error rates across all three rounds. TPE can, and often does, result in revocation of billing privileges, but generally not before the provider has failed three rounds of review.
PPEO audits, on the other hand, are not subject to the same CMS rules as TPE audits and are often far more rushed and less forgiving. Providers have been revoked by CMS after only a single round of PPEO review, with no education provided and no opportunity to implement changes. The contractor conducting the PPEO review also often rushes from one round to the next without given the chance to change anything, predictably leading the provider to fail a second round for the same reasons as the first.
While PPEO audits are currently in use only in Arizona, California, Nevada, and Texas, CMS has contemplated taking them nationwide. Providers should be aware that in practice, PPEO reviews are not focused on improving compliance or Medicare billing practices, but more often simply serve as a pretext to revoke a hospice’s Medicare billing privileges. Providers should therefore treat PPEO review with a high level of caution and take additional steps to increase the compliance of their claims and documentation with Medicare hospice requirements.
For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to hospice audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com