OPERATION RESTORE TRUST: Review of Hospice Eligibility at the Family Hospice of Dallas

EXECUTIVE SUMMARY:

This report provides you with the results of our audit of Medicare hospice beneficiary eligibility determinations at the Family Hospice of Dallas (FHD) in Dallas, Texas. This audit was part of Operation Restore Trust (ORT), a joint initiative among various Department of Health and Human Services components. The ORT seeks to identify specific vulnerabilities in the Medicare program and pursue ways to reduce Medicare's exposure to abusive practices.

The objective of our review was to evaluate hospice eligibility determinations for beneficiaries that remained in hospice care for more than 210 days. We also determined the amount of payments made to the Family Hospice of Dallas (FHD) for those Medicare beneficiaries that did not meet the Medicare reimbursement requirements.

Our review included a medical evaluation of FHD's eligibility determinations for 60 Medicare beneficiaries who had been in hospice care for more than 210 days. Of the 60 cases, 26 were active in hospice at the time of our review and represent 20 percent of the 133 patients who were active Medicare hospice beneficiaries at FHD as of September 7, 1995. The review showed that:

• 20 beneficiaries were not eligible for hospice coverage at the time of admission, and
  
• medical records for 2 other beneficiaries were insufficient to conclusively determine a life expectancy of 6 months or less, as required by the Medicare program.

Our medical determinations were made by physicians who were consultants to the Texas Medical Foundation, the Texas Peer Review Organization (PRO). As part of their initial review, all 22 cases, which were found ineligible or inconclusive, have been reviewed by staff from the fiscal intermediary, Palmetto Government Benefits Administrators (PGBA). The PGBA agreed with the PRO's decisions.

We believe the identified discrepancies with the 20 beneficiaries occurred due to inaccurate prognoses of life expectancy by hospice physicians based on the medical evidence in the patients' files. For the two other questionable beneficiaries, we believe the evidence in the medical files was not sufficient to permit a determination of eligibility. The FHD received Medicare payments for hospice services totaling $973,094 for 20 ineligible patients and $69,648 related to the 2 beneficiaries for whom we were unable to determine that a terminal illness existed at the time of admission to the hospice.

We are recommending that the intermediary:

• Recover payments of $973,094 for the 20 beneficiaries who were not eligible for Medicare hospice benefits. Recover payments made on behalf of ineligible beneficiaries after September 7, 1995.
  
• Conduct medical reviews of the two cases for which we were unable to conclusively determine whether the beneficiary was terminally ill. Based on the results of these reviews, take appropriate action to recover amounts ($69,648) determined to be overpayments.
  
• Coordinate with the Health Care Financing Administration (HCFA) in providing training to hospice providers and physicians on eligibility requirements for hospice beneficiaries, particularly the requirement for a 6-month prognosis.
  
• Analyze utilization trends to identify hospices with large increases in claims for beneficiaries with over 210 days of hospice coverage and conduct medical reviews on a sample of their claims.
  
• Conduct periodic reviews of hospice claims to ensure the hospices are obtaining sufficient medical information to make valid eligibility determinations.

The intermediary responded to a draft of this audit report on November 18, 1996. The intermediary officials have reviewed information that we provided and they concur with the eligibility determinations made by the PRO physicians. However, they stated that they would be reluctant to recover payments. These officials believe that the beneficiary would be held liable in these situations and HCFA had instructed them to educate providers rather than deny services for the time period in question. The intermediary officials stated that hospice data is currently included in the intermediary's focused medical review data analysis process and its education department regularly conducts education workshops on eligibility requirements for hospice providers and physicians.

We will be working with HCFA on the beneficiary liability issue and the recovery of overpayments from the hospice.