The Office of Inspector General sets its sights on hospice care in nursing homes

On September 8, 2009, the Office of Inspector General posted an eye-catching report on Medicare hospice care in nursing facilities. The OIG found that 82 percent of hospice claims for beneficiaries in nursing facilities did not meet at least one Medicare coverage requirement. The Medicare hospice benefit allows a beneficiary with a terminal illness to forgo curative treatment for the illness and instead receive palliative care. Medicare paid approximately $1.8 billion for these claims.

We have long subscribed to the belief that predicting where the government will focus its investigative resources is as simple as determining where the government feels it has the best chances of recovering overpayments. Based on the results of this report, we anticipate the government will be even more focused on monitoring compliance with hospice coverage requirements. According to the OIG report, studies suggest that the use of hospice care has grown most rapidly in nursing facilities. Skilled nursing homes, hospice care providers and the doctors who certify terminal illness requirements should read the report (http://www.oig.hhs.gov/oei/reports/oei-02-06-00223.pdf) and monitor their compliance with Medicare coverage requirements.

The report identifies several ways that hospice and skilled nursing providers frequently fail to meet Medicare coverage requirements. Eighty-one percent of claims did not meet at least one Medicare coverage requirement pertaining to election statements, plans of care, services, or certifications of terminal illness. In thirty-one percent of claims, hospices provided fewer services than outlined in beneficiaries' plans of care. Significant to the physicians who certify compliance, four percent of claims did not meet certification of terminal illness requirements.

Reports like the one issued by the OIG this week signal the existence of a well-stocked pond to folks who like to fish for False Claims Act cases. Government investigators and whistleblowers are likely to cast their lines in these waters. It is a good time for health care providers engaged in hospice care to carefully review their compliance with hospice coverage requirements and take the steps necessary to ensure compliance.

New Amendments to the Delaware False Claims Act May Signal More Claims Against Health Care Providers

After more than two years of trying to pass a law amending Delaware’s False Claims and Reporting Act, the House and the Senate were finally able to pass a bill in the last days of the recent legislative session. Governor Jack Markell signed the bill into law late last week. The amendments to the Act provide the State enhanced financial incentives for pursuing False Claims Act recoveries. Accordingly, we expect the Delaware Department of Justice Medicaid Fraud Control Unit to step up its False Claims Act recovery efforts.

The changes to Delaware’s False Claims and Reporting Act were brought about by the federal Deficit Reduction Act of 2005, which contained provisions that created incentives for states to enact anti-fraud legislation modeled after the federal False Claims Act. The primary incentive offered by the federal government was an increased percentage of any False Claims Act recovery, meaning the State of Delaware would receive an additional 10% of any False Claims Act recovery if it brought its Act into compliance.

It took the General Assembly over two years (and several versions) to enact a bill.

The delay was in large part due to effective lobbying efforts of several organizations representing the interests of Delaware health care providers. As a result of their work, the current bill appears to meet the requirements of the Deficit Reduction Act of 2005, but does not contain several provisions that the Delaware Department of Justice (“DOJ”) had proposed.

Gone from the bill is the controversial provision creating a DOJ False Claims Act Litigation Fund that would have required the accused to finance the costs of the government’s investigation. Also removed from the final version of the bill was a section giving the DOJ broad investigative powers that would have permitted it to demand records without any requirement of demonstrating cause.

The new bill imposes an annual reporting obligation on the DOJ. Each year the DOJ will have to report, among other things, the number of cases filed under the Act during the previous calendar year and the total amounts recovered. We will now be able to see whether the enhanced financial incentives will generate more filings against health care providers.

Turning up the HEAT on health care fraud

The United States Department of Justice and the U.S. Department of Health & Human Services have created an interagency team – the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”) – to increase both fraud detection and fraud prevention.

Significant to Delaware health care providers, HEAT will work with State Medicaid officials to conduct provider audits and monitor activities to detect fraudulent activities. HEAT has announced that it will use modern technology to complete in a matter of days analysis of electronic evidence that previously took months to analyze using traditional investigative tools.

Perhaps most significant among the announced HEAT initiatives is a new focus on using criminal prosecutions as a deterrent against health care fraud. Already, HEAT has announced filing criminal charges against 53 doctors for alleged fraud.

Additional HEAT initiatives include increasing compliance training for Medicare providers, improving communication between CMS and law enforcement, and focusing on suppliers of durable medical equipment. HEAT is also asking the public to get involved in the fight against fraud and has created a Web site (www.hhs.gov/stopmedicarefraud) and a tip line for reporting suspected fraud.

The joint announcement of the HEAT initiatives by Attorney General Holder and HHS Secretary Sebelius underscore the Obama administration’s commitment to health care fraud enforcement.