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OIG audit 2023: What hospice and home health agencies need to know

The Office of Inspector General (OIG) is conducting a nationwide hospice audit in 2023. The audit focuses on beneficiary eligibility for hospice services when patients haven’t had inpatient or outpatient hospital services prior to being admitted to hospice.

The audit has triggered questions, and sometimes alarm, for hospice and home health agencies alike, since many out-of-hospital care organizations offer both services. Here’s your OIG audit manual, explaining what we know today, what it could mean for your agency, and how you can reduce your risk of being audited.

Is my agency being targeted?

Two big reasons OIG Medicare audits generate a good deal of concern among home health and hospice agencies is that they can lead to a determination of overpayment, costing agencies millions of dollars. Another unsettling aspect of OIG audits is that findings are published on the OIG website where anyone can see them — including your clients and their families.

While you might feel your agency is being singled out, OIG audits are typically based on industry wide claims data — not complaints or specific providers.

The OIG routinely conducts audits and reviews to identify instances of fraud and abuse associated with federal healthcare spending. Since most OIG resources are focused on oversight of Medicare and Medicaid, it’s no surprise that hospice and home health agencies often see increased scrutiny.

Common types of healthcare fraud include billing for services that weren’t provided or weren’t medically necessary. Indicators that can trigger scrutiny include:

  • Patients with no recent physician visits that certify the ordered care is medically necessary
  • Home care services weren’t provided after a hospital or nursing home stay
  • Multiple home health readmissions occur over a short period of time

What’s the OIG looking for?

Audits are typically based on red flags that come up during analysis of claims data. While these red flags are rarely identified outside of audit reports, the OIG often focuses on lack of documentation, eligibility issues and Medicare spending (most Medicare payments go to patients with a stay of more than 180 days). Red flags that suggest healthcare fraud include:

  • Upcoding services to increase payment
  • Submitting claims for patients who aren’t homebound
  • Billing for visits that aren’t medically necessary or ordered by a physician
  • Billing for visits a doctor ordered, but the patient didn’t receive
  • Billing for services and equipment the patient didn’t receive
  • Forged or fake signatures on medical forms and equipment orders
  • Offers for free goods or services in exchange for Medicare numbers

Current OIG hospice audits appear focused on proper usage and documentation around the length of stay, based on a high incidence of fraud associated with stays of more than six months. In some cases, length of stay exceeded one year or more. The most common Additional Determination Request (ADR) denial reason is lack of documentation to support a prognosis of six months or less. To reduce your risk of audit, it’s important that your agency’s documentation supports the need for hospice intervention per the Centers for Medicare and Medicaid Services (CMS) audit protocols and regulatory guidelines, which require that patients receive a prognosis of six months or less to qualify for hospice care.

According to experts at Husch Blackwell, OIG Medicare and Medicaid audits look for specific errors that commonly occur in hospice and home health care. For instance, in 2021, OIG was looking to see:

  • If patients met requirements for homebound status
  • If patients were truly in need of skilled services
  • Whether OASIS was submitted in a timely way
  • If services were accurately documented

Based on reports released in 2021, it seems reasonable to assume the 2023 audit will be looking at many of these same recurring issues. Right now, home health is seeing an uptick in audits, including SMRC and UPIC audits like those being conducted in the hospice space. If these audits detect more problem areas, reviews may be expanded and could lead to new or revised policies, increased regulatory oversight, or payment changes for both home health and hospice.

The OIG plans to publish its reports on the public website in 2023. It’s likely these reports could generate a new round of audits, and it’s only then that we may be able to determine additional areas of focus.

Preparing for the OIG audit

If you’re wondering how to prepare for an audit or reduce your agency’s risk, you’re not alone. Based on what we know today, here are steps you can take to manage your risk and the impact an audit could have on your agency:

  • Gather your data and compare it to national trends
  • Make sure clinical documentation, coding and billing are accurate and timely
  • Pay close attention to eligibility and Certificate of Terminal Illness documentation
  • Sign up for OIG updates and review published reports for trending issues and payment denials
  • Step up compliance around identified issues and concentrate on performance improvement
  • If your agency is experiencing an audit, seek professional counsel

As you ready your agency for the possibility of an OIG audit, consider it an opportunity to review your internal compliance processes and get a handle on your data. This is likely the best way to reduce your risk of being audited. It’s also a good idea to connect with colleagues in the industry to compare experiences and learn about the most effective ways to improve compliance with new and existing CMS protocols and requirements.

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Sue Weeks

Sue possesses a diverse range of experience in the Home Health and Hospice field, including firsthand involvement in managing authorizations, accounts receivable, and various other revenue cycle positions within Home Care and Hospice agencies. Additionally, she has played a pivotal role in software implementation, specifically in the financial model, where she trained customers on best practices, software functionality, and system administration. Sue's experience includes working closely with payors, particularly Medicare, and she has become a subject matter expert on the specific billing rules and regulations applicable to Home Care and Hospice.

Currently serving as the Project Manager for the Revenue Cycle Division, Sue leverages her skills and knowledge to develop optimal workflows for the RCM team, update auditing and quality measures, provide training, and collaborate with customers to enhance their billing and accounts receivable processes.

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