PublicationsOIG Issues Compliance Guidances for the Hospice Industry and Medicare+Choice Organizations Andrew B. Wachler, Phyllis A. Avery, and Abby Pendleton Introduction Like its previous compliance program guidances issued and its corporate integrity agreements, the latest OIG issuances contain seven key elements that the OIG has determined are fundamental to an effective compliance program. These key elements include: (1) the development and distribution of written standards of conduct and policies and procedures that promote the commitment to compliance and address specific areas of potential fraud; (2) the designation of a compliance officer and, if feasible, other appropriate bodies; (3) the development and implementation of effective training and education; (4) the development and promotion of effective lines of communication; (5) the use of internal auditing and other tools to monitor compliance and reduce problems; (6) the enforcement of standards through well-publicized disciplinary guidelines; and (7) the development and implementation of policies to respond to detected offenses and to initiate corrective action. Keeping in line with other compliance program guidances issued by the OIG, the latest guidances represent the OIG's suggestions on how the hospice industry and Medicare+Choice organizations can best develop and implement internal controls and prevent fraudulent activity. The guidances are voluntary and do not represent binding standards for hospices or Medicare+Choice organizations.1 Although the OIG's draft guidance in the managed care industry was specifically developed for Medicare+Choice Organizations that offer Coordinated Care Plans2, the OIG's guidance may prove useful to other managed care organizations. Indeed, the OIG noted that it "encourages managed care organizations to read the guidance with the whole organization in mind, applying the guidance to whatever departments or divisions, including private-sector managed care areas, that are deemed appropriate." Moreover, the OIG stated that much of the guidance can be used by Medicaid managed care organizations to assist them in developing compliance programs. The OIG also explained that its guidance for Medicare+Choice organizations is pertinent for all types of Medicare+Choice organizations notwithstanding that there may be significant differences among such organizations in terms of types of services, size of services areas, size of the organization, and availability of resources. Similarly, in its issuance for the hospice industry, the OIG noted that its guidance is pertinent for all hospice provider types, whether for-profit or non-profit, hospital associated or free-standing, community or volunteer based, large or small, or urban or rural. While neither the hospice guidance nor the Medicare+Choice organization guidance includes a model compliance program, the OIG does provide a detailed discussion of the recommended compliance program elements and examples of suspect activities or practices which should be addressed in the compliance programs. As expected, the task of developing and implementing an effective compliance program is left to the individual hospice provider or Medicare+Choice organization, as appropriate. In fact, through its guidances, the OIG strongly encourages hospice providers and Medicare+Choice organizations to develop and implement compliance elements and activities that uniquely address their own particular risk areas. OIG Identified Risk Areas Of particular interest to the health care legal community, in assisting hospice providers and managed care organizations in developing and implementing compliance programs, are the areas identified by the OIG as areas of concern or vulnerability in the hospice and managed care industries. In developing the latest guidances and identifying risk areas, in addition to consulting with HCFA, the OIG considered its previous compliance program guidances, Special Fraud Alerts, reports issued by the OIG Office of Audit Services, reports issued by the OIG Office of Evaluation and Inspections, and recent and past investigations conducted by the OIG's Office of Investigations and the Department of Justice. The OIG believes that every compliance program should require the development and implementation of written compliance policies that identify and address specific areas of risk and vulnerability to the entity. Given the nature of the current health care enforcement environment, all hospice providers and managed care organizations should carefully review and assess those areas which the OIG believes are of special concern in the industry. The OIG recommends that such organizations "conduct a comprehensive self-administered risk analysis or contract for an independent risk analysis by experienced health care consulting professionals." Due to the sensitive nature of assessment and auditing activities, including evaluating potential self-disclosure issues, organizations undertaking risk assessment activities as part of their compliance programs are well advised to seek legal counsel from experienced health care specialists when engaging in such activity. Health care attorneys who work with providers, suppliers and other organizations to develop compliance programs may be in the best position to assist in fulfilling compliance obligations while also minimizing the risk of potential adverse actions. Hospice Risk Areas The OIG sets forth a number of different areas of concern for hospice providers within the text of its guidance, The OIG's annotated footnotes also provide a comprehensive look at the issues and provide a valuable framework for hospice providers interested in implementing compliance activities. In addition to identifying and generally summarizing its areas of concern, the OIG provides further insight with regard to those risk areas related to hospice Medicare eligibility requirements (i.e., terminal illness requirement, plan of care, utilization of services, levels of hospice care, and hospice services provided to patients in nursing homes) as such areas have been the frequent subject of investigations and audits. The twenty-eight (28) OIG identified hospice risk areas include the following activities/practices: (1) uninformed consent to elect the Medicare Hospice Benefit; (2) admitting patients to hospice care who are not terminally ill; (3) arrangement with another health care provider who a hospice knows is submitting claims for services already covered by the Medicare Hospice Benefit; (4) under-utilization; (5) falsified medical records or plans of care; (6) untimely and/or forged physician certifications on plans of care; (7) inadequate or incomplete services rendered by the Interdisciplinary Group; (8) insufficient oversight of patients receiving more than six consecutive months of hospice care; (9) hospice incentives to actual or potential referral sources (e.g. physicians, nursing homes, hospitals, patients, etc.) that may violate the anti-kickback statute or other similar Federal or State statute or regulation, including improper arrangements with nursing homes; (10) overlap in the services that a nursing home provides, which results in insufficient care provided by a hospice to a nursing home resident; (11) improper relinquishment of core services and professional management responsibilities to nursing homes, volunteers, and privately-paid professionals; (12) providing hospice services in a nursing home before a written agreement has been finalized, if required; (13) billing for a higher level of services than was necessary; (14) knowingly billing for inadequate or substandard care; ( 15 ) pressure on a patient to revoke the Medicare Hospice Benefit when the patient is still eligible for and desires care, but the care has become too expensive for the hospice to deliver; (16) billing for hospice care provided by unqualified or unlicensed clinical personnel; (17) false dating of amendments to medical records; (18) high-pressure marketing of hospice care to ineligible beneficiaries; (19) improper patient solicitation activities, such as "patient charting"; (20) inadequate management and oversight of subcontracted services, which results in improper billing; (21) sales commissions based upon length of stay in hospice; (22) deficient coordination of volunteers; (23) improper indication of the location where hospice services were delivered; (24) failure to comply with applicable requirements for verbal orders for hospice services; (25) non-response to late hospice referrals by physicians; (26) knowing misuse of provider certification numbers, which results in improper billing; (27) failure to adhere to hospice licensing requirements and Medicare conditions of participation; and (28) knowing failure to return overpayments made by Federal health care programs. While many of the hospice risk areas identified by the OIG involve rather obvious problematic activities (e.g. false dating of amendments to medical records, falsified medical records or plans of care, and forged physician certifications on plans of care), the OIG's list also includes areas involving complex and undefined issues facing all hospice providers. For example, although vulnerable to potential fraud and abuse, the terminal illness eligibility requirement raises many potential complexities. In order to be eligible to elect hospice care under the Medicare hospice benefit, an individual must be entitled to benefits under Part A of Medicare and certified as "terminally ill." Additionally, the individual must elect to receive all care related to the terminal illness through the hospice rather than standard Medicare benefits. For purposes of Medicare regulations3, an individual is considered "terminally ill" if the individual has a medical prognosis that his/her life expectancy is six (6) months or less if the terminal illness runs its normal course. Notably, it is well recognized for those in the hospice industry that determining a patient's prognosis, particularly in the area of non-cancer diagnoses, can be difficult to establish and is the subject of much debate. Given the OIG's and the Medicare Fiscal Intermediaries' increased scrutiny in this area, hospice organizations are well advised to take a careful look at this area and develop and implement internal policies to address eligibility and continuing eligibility practices within the organization. These policies may cover, including but not limited to, standards relating to initial terminality certifications and re- certifications, documentation protocols to support prognosis determinations and re-determinations, and procedures to follow regarding determining eligibility and continuing eligibility for patients with non-cancer diagnoses. The OIG guidance sets forth that hospice organizations should create over- sight procedures to ensure that its Medicare beneficiaries' terminal illnesses are verified and that factors qualifying the beneficiaries as terminally ill are appropriately documented. Also that, prior to billing the Medicare program for hospice services, any determinative assessment of the terminal illness should be completed. The OIG's guidance further provides that hospice organizations should establish written policies and procedures that require, at a minimum:
Another important area identified by the OIG as vulnerable to fraud and abuse and that has been the subject of an OIG Special Fraud Alert is the provision of services to hospice patients in nursing homes. Given the continuing focus in this area by the OIG, Medicare Fiscal Intermediaries, and the complexities raised by nursing home arrangements, hospice organizations should, with assistance of health care legal counsel, carefully review this area of "their services and implement policies to enhance compliance. The OIG states that hospice organizations should implement sufficient oversight controls to ensure that hospice care it provides to nursing home residents is appropriate, complete, and in accordance with applicable laws and Medicare requirements. According to the OIG, in order to satisfy Medicare requirements in the nursing home context, hospice organizations should implement policies to ensure that:
With respect to nursing home arrangements, the OIG also notes that hospice organizations should establish and implement policies, taking into consideration the OIG's safe harbor regulations, to prevent certain practices which may raise anti-kickback concerns. Such prohibited practices, as identified by the OIG, include by way of example, hospice organizations paying room and board to nursing homes in excess of amounts the nursing home would have received directly from Medicaid had the beneficiary not been enrolled in hospice; hospices referring patients to nursing homes to induce the home to refer patients; and hospice organizations providing free staff to nursing homes to perform. duties that would be performed by the home. Addressing other anti-kick back and self-referral concerns, the OIG also advises hospice organizations, among other recommendations, that they should implement procedures so that all contracts and arrangements with actual or potential referral sources are reviewed carefully. Managed Care Risk Areas Like the hospice guidance. the Medicare+Choice organization guidance identifies certain areas of concern for managed care organizations. Unlike any of its previously issued guidances which focus on providers and suppliers of health care and issues that arise in the billing and submission of health care claims, the Medicare+Choice organization guidance is unique in that it addresses risk areas that arise when an organization both arranges for, and pays for, medical care. The OIG guidance is unclear as to a Medicare+Choice organization's compliance responsibilities with regard to its subcontractors. Specifically, the OIG notes that "[t]he fact that Medicare+Choice organizations may be both providers and insurers of health care increases the number and types of risk areas to which a Medicare+Choice organization must be attuned, as well as the type of auditing and monitoring procedures that must be implemented, in the development of its compliance efforts." Moreover, that Medicare+Choice organizations contracting with a variety of providers in different specialties must consider a variety of applicable risk areas. In its guidance, the OIG strongly recommends that the Medicare+Choice organization coordinate with its providers to establish compliance responsibilities. The OIG notes that the delineation of compliance responsibilities should be formalized in an enforceable contract between the provider and the Medicare+Choice organization. Thus, in addition to regulatory requirements, managed care providers can expect to see delegation of compliance responsibilities in their contracts. In addition to the seven (7) enumerated risk areas addressed by the OIG in its guidance and discussed below, the OIG also sets forth an additional seven (7) areas, previously articulated in documentation promulgated by HCFA and other Federal agencies, which managed care organizations should consider as "de facto risk areas." These "de facto risk areas" include: (1) the election process; (2) benefits and beneficiary protections; (3) quality assurance; ( 4) premiums and cost sharing; (5) solvency, licensure and other State regulatory issues; (6) claims processing; and (7) appeals and grievance procedures. The OIG notes that given the breadth of the rules and regulations applicable to Medicare+Choice organizations, it has not attempted to identify every policy that such organizations should develop and implement. Rather, based on its review of OIG audits, investigations and evaluations, it has identified the following seven (7) areas of special concern: (1) marketing materials and personnel; (2) selective marketing and enrollment; (3) disenrollment; (4) under-utilization and quality of care; (5) data collection and submission processes; (6) anti-kickback statute and other inducements; and (7) anti-dumping statute. Like its previous guidances, the OIG also expects Medicare+Choice organizations to supplement the identified risk areas with risk areas particular to the organization. The OIG also points out that while these areas specifically apply to Medicare+Choice organizations, similar issues may arise in other types of managed care organizations. The OIG also recommends that Medicare+Choice organizations access various government web sites when conducting risk assessment activities including: http://www.hcfa.gov/medicare/mgd-ops.htm and http://www.dhhs.gov/progorg/oig. In addition to uncertainty surrounding compliance responsibilities and subcontractors, of particular note for Medicare+Choice organizations are certain statements made by the OIG in discussing marketing materials. The OIG is concerned that Medicare+Choice organizations accurately and fully describe their plan information in any marketing materials or any other materials distributed to individuals enrolled in the applicable plan. The OIG's concern, in part, stems from a study conducted by the General Accounting Office that evaluated certain managed care organizations and found that all had distributed materials containing inaccurate or incomplete information. Importantly, the OIG notes that the materials examined as pan of the study were all reviewed and approved by HCFA and that Medicare+Choice organizations "should take special care to ensure that all marketing materials are accurate notwithstanding whether the materials have been approved by HCFA." Such statements are likely to cause concern for Medicare+Choice organizations as the OIG works towards finalization of its draft guidance. In further addressing marketing issues and although while recognizing Medicare+Choice organizations are responsible for acts or omissions of marketing agents per federal regulation, the OIG's guidance "strongly encourages Medicare+Choice organizations to employ their own marketing personnel, as opposed to contracting these responsibilities to outside entities." Moreover, the OIG advises that it and HCFA "strongly discourage the use of physicians for marketing agents." The OIG's guidance also recommends that Medicare+Choice organizations implement policies to ensure that the organization is not engaging in marketing tactics, known as "cherry-picking" or "selective marketing" aimed at discriminating in the enrollment process based upon an enrollee's degree of risk for high cost or extended treatment. Given the OIG's concern in this area, Medicare+Choice organizations are well advised to review the numerous examples set forth by the OIG of trouble- some selective marketing practices. Another area of special concern identified by the OIG is disenrollment. With certain exceptions (e.g. failure to pay premiums), a Medicare+Choice organization is prohibited from disenrolling or requesting or encouraging an enrollee to disenroll from a plan. The OIG believes that each Medicare+Choice organization should implement policies to address this area which should include clarification of circumstances in which it is appropriate for medical personnel to discuss the concept of disenrollment. The OIG also believes that generally speaking, "it would be inappropriate for medical personnel to initiate discussion of disenrollment or to promote disenrollment except in the rare circumstance where the Medicare+Choice organization cannot provide the covered medical items or services needed by the patient." The OIG also views under-utilization as a serious concern for Medicare+Choice organizations and has identified at least three (3) types of policies that such organizations should implement to address this serious issue. Specifically, the OIG believes that Medicare+Choice organizations should implement policies that: (1) prohibit interference with health care professionals' advice to enrollees; (2) ensure compliance with Physician Incentive Plan ("PIP") regulations, to the extent the organization utilizes PIPs in their payment arrangements with physicians or physician groups; and (3) address appropriate provider selection and credentialing. Given the OIG's focus in this area, as part of their compliance activities, Medicare+Choice organizations should carefully review practices in light of under-utilization concerns. Per Medicare regulations, Medicare+ Choice organizations must comply with numerous requirements relating to data collection and submission. To this end, the OIG believes that Medicare+Choice organizations should implement a policy setting forth that all required submissions to HCFA be accurate, timely and complete.. The OIG, however, is particularly concerned regarding accuracy of information when such information deter - mines the amount of payment from HCFA. The OIG guidance states that "[w]hen a Medicare+Choice organization is claiming payment (or the right to retain payment) based on information submitted to HCFA, it must take responsibility for having taken reasonable steps to assure the accuracy of this information." The OIG states that Medicare+Choice organizations should implement policies addressing enrollment, encounter, and adjusted community rate ("ACR") data taking note of two OIG reports that found problems in two areas of this data. Based on its report findings, the OIG recommends that procedures be in place to ensure that the administrative component of the ACR is calculated appropriately and internal controls are in place to ensure that the institutional status of beneficiaries is reported accurately. Given the OIG's identification of anti-dumping violations as a special concern, managed care organizations should also carefully review this area as part of their compliance efforts. The OIG states that it and HCFA believe that there may be special concerns relative to emergency services provided to Medicare+Choice enrollees. Notably, the OIG guidance provides that according to the OIG and HCFA, "the anti-dumping statute requires that notwithstanding the terms of any managed care contractual arrangements, the provisions of the anti-dumping statute govern the obligations of hospitals to screen and provide stabilizing treatment to any patient presenting at an emergency facility. No contract between a hospital and managed care organization can excuse the hospital from the anti- dumping statute obligations." The OIG also cautions Medicare+Choice organizations to be particularly aware of the anti-dumping requirements when the organization has entered into an arrangement with the hospital allowing the organization to have its own physicians in the emergency department for screening and treating of enrollees. Conclusion Given the current health care enforcement environment and the OIG's continuing focus on compliance, various types of manages care organizations and hospice providers should carefully consider implementing compliance within their organizations. Indeed, by January 1, 2000, all Medicare+Choice organizations are required to have compliance plans encompassing the elements set forth in the Federal Sentencing Guidelines. Although the Draft OIG Compliance Program Guidance for Certain Medicare+Choice organizations is not mandatory, Medicare+Choice organizations, with assistance from health care legal counsel, can use this guidance as a valuable tool in developing and implementing a compliance program specific to the organization. Andrew B. Wachler is a principal of Wachler and Associates, P.C. He graduated Cum Laude from the University of Michigan in 1974 and Cum Laude from Wayne State University Law School in 1978. Mr. Wachler is a member of the State Bar of Michigan, Health Care Law Section (Health Providers Subcommittee American Bar Association, the Program Committee of the Health Law Section of the American Bar Association, Health Care Law Section Council of the State Bar of Michigan, American Health Lawyers Association, and the Michigan Society of Healthcare Attorneys. Phyllis A. Avery is an associate with Wachler & Associates. P.C. She graduated from the University of Michigan in 1984 with honors and graduated Cum Laude from the University of Michigan Law School in 1988. Ms. Avery is a member of the State Bar of Michigan. Health Care Law Section (Health Providers Subcommittee) and the American Health Lawyers Association. Abby Pendleton is an associate with Wachler & Associates. P.C. She graduated Cum Laude from Central Michigan University in 1993 and was a member of the Golden Key National Honor Society She graduated Magna Cum Laude from Wayne State University Law School in 1996 and is a member of the Order of the Coif. Ms. Pendleton is a member of the State Bar of Michigan, Health Care Law Section, the American Health Lawyer's Association and the Health Care Compliance Association. Endnotes 1 Although the regulations implementing the Medicare+Choice program require such organizations to implement a compliance plan that includes the elements set forth in the Federal Sentencing Guidelines. the OIG notes that its guidance is "voluntary and simply is intended to provide assistance for Medicare+Choice organizations looking for additional direction in the development and implementation of a compliance program." |
