News: OIG audit found Northwest Hospice received reimbursement for services not complying with Medicare requirements

In a review of 100 claims, an OIG audit of Northwest Hospice, LLC (NW Hospice), found 19 did not support the beneficiary’s terminal prognosis resulting in an extrapolated $3.9 million in  unallowable Medicare reimbursement for hospice services.

The audit covered a random sample of 100 claims from a total of 6,864 claims for which NW Hospice received a total reimbursement of $31.5 million between June 2016 and May 2018. The OIG evaluated compliance with selected Medicare billing requirements to determine whether the services met coverage, medical necessity, and coding requirements.

According to the OIG audit, “improper payment occurred because NW Hospice’s policies and procedures were not effective in ensuring that the clinical documentation it maintained supported the terminal illness prognosis.” Based on the audit, the OIG estimates that NW Hospice incorrectly received $3.9 million in incorrect funds and recommended refunding the money. The OIG also recommended NW Hospice “exercise reasonable diligence to identify, report, and return any overpayments in accordance with the 60-day rule,” as well as strengthen its policies and procedures to make sure hospice services comply with Medicare requirements.

NW Hospice agreed with the conclusion of the OIG for seven of the 19 claims, but disagreed with the remaining 12. “Specifically, NW Hospice stated that: 1) the beneficiaries were discharged from hospice the same month or the month following our contractor’s determination of ineligibility (six claims) and 2) the licensed physician it hired determined that the beneficiaries were eligible for hospice services (six claims).”

The hospice center did not explicitly concur or nonconcur with the recommendation, according to the OIG. It did, however, agree to take appropriate action to refund payments for services determined to not have complied with Medicare requirements. NW Hospice also provided information on actions that it had taken or planned to take to address the other OIG recommendations.

After reviewing NW Hospice’s comments, the OIG maintains that their recommendations are valid and that the medical records for each of the 19 sampled claimed did not support the beneficiary’s terminal prognosis.

Editor’s note: The OIG audit can be found here. ACDIS coverage of other OIG audits can be found here.