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Hospice Providers Take Note: OIG Highlights Compliance Vulnerabilities in the Medicare Hospice Benefit


Hospice Providers Take Note: OIG Highlights Compliance Vulnerabilities in the Medicare Hospice Benefit

For a number of years, the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services has published concerns about the quality of Medicare-certified hospice providers and about fraud and abuse in the Medicare hospice benefit program. On July 31, 2018, the OIG consolidated its concerns into a portfolio “Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: A Portfolio” (OEI-02-16-00570). While neither the U.S. Centers for Medicare and Medicaid Services (CMS) nor the National Hospice and Palliative Care Organization agree with all of the OIG’s concerns or recommended fixes, the OIG is steadfast. Hospice providers can expect continued OIG scrutiny of both industry and individual provider practices, as well as continued OIG effort to effect structural change in the Medicare hospice benefit to improve program integrity.

The OIG’s Concerns

The OIG raised a number of concerns about hospice operations and practices, the inappropriate incentives built into the hospice payment model, and about CMS’ oversight of the Medicare hospice benefit:

  • Per the OIG, hospices are not always providing the care that patients need to control the pain and symptoms of terminal illness. OIG believes that hospices are not:
    • preparing or following adequate plans of care;
    • being available around the clock on a daily basis;
    • providing adequate physician services; and
    • providing all levels of care available in the hospice Medicare benefit to individuals who need them.
  • Per the OIG, some hospices are enrolling individuals who are not terminally ill, thereby denying them access to curative therapies for their illnesses.
  • Per the OIG, CMS does not provide adequate information on Hospice Compare to allow individuals to meaningfully choose the best hospice provider for themselves or their family members.
  • Per the OIG, hospice election statements often do not fully apprise individuals about the hospice benefit and the services that they will receive or are misleading about this information.
  • Per the OIG, hospices bill Medicare for higher levels of care than the patient needs and consequently obtain significantly higher payment than is medically justified.
  • Per the OIG, Medicare sometimes paid for drugs through Part D for hospice beneficiaries when payment for these drugs should have been covered by the daily Part A rate paid to the hospice, thereby essentially double-paying.
  • Per the OIG, the structure of hospice reimbursement encourages hospices to minimize the services provided to individuals and to cherry pick only the patients who need the fewest services.
  • Per the OIG, the structure of the hospice benefit permits hospices to be paid for aide services for patients residing in a nursing facility even though the nursing facility is actually providing the service, allegedly incentivizing hospices to favor patients who reside in nursing facilities.

Recommended OIG solutions

The OIG proposes a number of solutions to these concerns directed principally at CMS:

  • Enhance the survey process using data about hospice deficiencies and claims.
  • Seek statutory authority to establish additional, intermediate remedies for poor hospice performance.
  • Enhance the data reported on Hospice Compare.
  • Make available consumer-friendly information explaining the hospice benefit.
  • Ensure that a physician is involved in the decisions to start and continue general inpatient care.
  • Use data to identify problematic hospices, and take appropriate follow-up action.
  • Increase oversight of general inpatient care claims and focus particularly on general inpatient care provided in nursing facilities.
  • Implement comprehensive prepayment review for general inpatient care.
  • Ensure that hospices provide drugs covered under the hospice benefit as necessary without inappropriately shifting the cost to Part D.
  • Assess the current payment system to determine what changes may be needed to tie payments to beneficiaries’ care needs and quality of care, and adjust payments accordingly.
  • Modify payments for hospice care in nursing facilities.


It is certainly uncomfortable for health care attorneys and providers to hear the OIG’s strident criticism of the hospice industry, and to contemplate the consequences of the OIG’s recommended solutions if they are ever implemented. But uncomfortable or not, the OIG’s portfolio can serve as a blueprint for hospice self-assessment regarding those OIG-identified issues that are within the providers’ control. Such self-assessment can maximize quality of care, enhance program integrity, and repair any reputational damage that publication of the portfolio may have caused.

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