Hospices, They Just Keep Picking on You

Original story posted on: November 29, -0001

As a hospice, you thought it was bad enough getting in trouble for the things that you billed and the payments you made to the healthcare providers.

Now you have a new problem. Across the country, regulators are claiming that some of your patients were enrolled in a very small program called a “home and community-based care waiver” or “nursing home diversion waiver” program.

What are the issues?

A number of states, including my home state of Florida, started Medicaid pilot HMOs with a specific aim. The concept behind these very small programs was that if you had a small managed-care company act as a gatekeeper for long-term care services, specifically hospice services, the patient got better care at a lower price.

The messy part of these programs was that they were, and are, extremely small and poorly supervised. Worse, it was not clear to the patients when they were enrolled in these programs what the ramifications were of enrolling. Hospice patients and their families are in the worst of circumstances, and struggle with the existing system.

In 2013 the Office of Inspector General performed a review of the waiver programs and found that these HMOs were poorly organized and poorly run. More importantly, they were poorly supervised.

The waiver providers are for-profit HMOs receiving a monthly standard payment, called a PMPM or Per Member Per Month payment, from which they are supposed to pay providers. The less they spend, the more money they make. Unfortunately, the state agencies in charge of supervising the HMOs were asleep at the switch. They did not make sure hospices and providers knew the HMOs were responsible for paying for patient services for their members. They did not make sure that billing systems and eligibility systems told providers who was responsible for paying claims.

State Medicaid programs just assigned patients to HMOs and paid premiums. Providers and hospices continued to care for patients. Due to the lack of information and bad systems, providers billed Medicaid and provided services blissfully unaware of the HMOs. In Florida, the Long Term Care Diversion waiver had a whopping 15,000 members out of 2.6 million total Medicaid recipients.

After the 2013 OIG study that found lots of problems, the most obvious thing for the states to do was to go after the HMOs in response to the report. Here is where the logic breaks down. States like Florida are instead going after the providers and hospices. They are arguing they paid premiums to the HMOs and the providers billed Medicaid programs in error. They want the money back.

How can a hospice protect itself?

What can you do? Well, in my world, most problems are solved with technology and the documentation of revenue cycle procedures. Find out if your state had or still has a diversion waiver program. Find out about the enrollment processes and who provides data for these programs. Reach out to your trade groups and associations. Review how you can use electronic sources to confirm eligibility.

If you realize you may be a target, look at your compliance plan.

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.

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Timothy Powell, CPA CHCP

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.

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