Assisted living facilities are prime settings for questionable hospice care, OIG finds

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Hospice billing patterns raise questions about care in AL facilities, a report states.
Hospice billing patterns raise questions about care in AL facilities, a report states.

Hospice services have rapidly expanded in assisted living facilities, giving rise to suspicions about Medicare billing patterns, according to a new report from the Department of Health and Human Services Office of Inspector General.

Hospice payments for beneficiaries in assisted living increased 119% between 2007 and 2012, reaching $2.1 billion, the OIG found. Medicare hospice spending for other settings increased 38%.

Medicare pays per-day for hospice care, regardless of whether services are provided. Thus, hospices might boost margins by taking on long-term patients that do not need intensive caregiving — a profile that fits assisted living residents. For beneficiaries in ALFs needing routine home care, hospices typically visited for less than five hours a week while being paid about $1,100 during such a period, according to the report released Wednesday.

The hospice benefit is designed for people with a six-month life expectancy, but people can remain on hospice care for longer periods with proper documentation from healthcare professionals. For the five-year time period studied, beneficiaries in assisted living received hospice care for a median of 98 days, the OIG analysis shows. This is almost double the 50 days for nursing facility residents.

The OIG report did not explicitly accuse providers of fraud. However, there are have been several recent legal cases alleging falsified documentation and other illegal practices meant to keep people in hospice care for long periods of time.

The report included several recommendations, including tying hospice payments more closely to beneficiary needs. The watchdog agency also called for targeted reviews of hospices that receive a high proportion of their payments for care in assisted living facilities. The Centers for Medicare & Medicaid Services concurred with all the recommendations.

The investigation was part of an ongoing evaluation of the way Medicare pays for hospice care. Policymakers intend to use the findings to comprehensively redesign the benefit, as called for by the Affordable Care Act.