While supplies last! Free 2022 Coding Essentials for Infusion & Injection Therapy Services book with every RACmonitor webcast order. No code required. Order now >

What are the Issues?

The major focus of most of the audits is medical necessity. They are looking for long stays in the hospice, particularly for patients who recover enough that they eventually leave hospice care.

Most hospices suffer from a coding issue in this regard. There is a tendency for the progress notes to all sound the same. Many times, the monthly progress notes appear to have been literally copied from the prior months. This makes for skeptics when the progress notes say something like, “life signs continue to weaken and the family has been contacted.”

Another painful focus of the current audits relates to the overlap between hospice providers and managed care companies. Most hospice care is not provided in brick-and-mortar buildings. Hospices often pay other providers such as nursing homes to care for their patients. Here is the rub. Patients may be enrolled in a managed care plan like a Medicaid “waiver” plan and still sign up for hospice services. Add to the problem that getting information is hard, because the patient’s family often is frazzled when the patient is terminal. The managed care plan is getting a monthly premium and the hospice is paying for services. In Florida, Medicaid has claimed that the hospices are double-billing when this happens.

How Can a Hospice Protect Itself?

First, look at your benchmark data.

Your first indicator is free. It is an annual report mailed to you called the Program for Evaluating Payment Patterns Electronic Report (PEPPER).

The PEPPER report provides:

  • Live discharges data

  • Long length of stay data

The provider is scored against:

  • Federal averages

  • State averages

  • MAC Jurisdictional averages

Look at how your hospice compares with other hospices. If you want to dig a little deeper, there is Medicare cost report data for every hospice in the country. If your billing patterns raise red flags, it is time to focus on the second step.

Review Your Coding

The best advice I can give about coding is to review it carefully and think like an auditor. Accounting requires that financial auditors apply a skeptical eye. Most auditors are accountants, not coders. Have your claims reviewed by someone who will ask questions like: “Six months ago you said he was dying, and now he is leaving the hospice and going back to work – how could that happen?”

The second advice I have on coding is to be more specific. If a patient is wasting away, give measurements of the width of the patient’s arms and the patient’s weight. Hospice patients should show a progression.

Look at Coordination Requirements

Also take a look at which managed care plans operate in your state. Does Medicaid have “waiver” plans that provide services to patients who qualify for hospice? If they do, find out what the requirements are. Do patients have to dis-enroll from managed care as part of being admitted to the hospice? Can the hospice bill the managed care company?

Use Technology

Look at what eligibility tools you have to confirm a hospice patient’s coverage. One best practice is to confirm eligibility for 95 percent of all patients at admission. It is hard, but it can be done. Technology is not free, but losing revenue is more expensive than the cost of the software in the modern world.

About the Author

Timothy Powell, CPA, is the healthcare manager for Moore, Stephens long-term care group. He has more than 30 years of reimbursement experience working with the “Big 4.” He has worked in the managed care area for most of his career.

Contact the Author


To comment on this article go to editor@racmonitor.com


Timothy Powell, CPA

Timothy Powell is a nationally recognized expert on regulatory matters, including the False Claims Act, Zone Program Integrity Contractor (ZPIC) audits, and U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) compliance. He is a member of the RACmonitor editorial board and a national correspondent for Monitor Mondays.

You May Also Like

Leave a Reply

Your Name(Required)
Your Email(Required)