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DEPARTMENT OF HEALTH &. HUMAN S,ERVICES Office of Inspector General
'+,~ ~\-
Jl'iI'() Washington, D.C. 20201
SEP - 4 2009
TO: Charlene Frizzera
Acting, Administrator
& Medicaid Services
Centers for Medicare 
FROM: Stuar Wright
Deputy Ins~ectorGeneral for
Evaluation and Inspections
SUBJECT: Memorandum Re~ort: "Medicare Hospice Care: Services Provided to
Beneficiaries Residing in Nursing Facilities," OEI-02-06-00223
proportion of Medicarehos~ice beneficiaries
This memorandum report detennines the 
residing in nursing facilties in 2006 and describes the natue and extent of hospice
allows a beneficiary with a
services ~rovided to them. The Medicarehos~ice benefit 
palliative
terminal ilness to forgo curative treatmentforthe ilness and instead  receive 
care, which is the relief of pain and other uncomfortble syi~toms. The number of
Medicare beneficiaries receiving hos~ice care has increased significantly in recent years.
In fiscal year 2001, about 580,000 beneficiaries received hos~ice care. In 2006, this
number increased by 62 percent to 939,000 beneficiaries. Medicare s~ending on hospice
care rose from $3.6 bilion in 2001 to $9.2 bilion in 2006. i
nursing
Some studies suggest that the  use of hospicecareisgrowingmost ra~idly in 
has :raised questionsaboutthehos~ice benefit
facilties.2 In  addition, ~revious OIG work 
residents. ForeXtan~le, OlGreportedthat in 1995,~a~mentlevels for
for  nursing facilty 
have been eXtcessive.3 However, little subsequent
hospice care in nursing facilities may 
beneficiaries and almost no
research has been done to examine hospice care for these 
1 Centers for Medicare & Medicaid Services (CMS), "Medicare Hospice Expenditues and Units of  Care."
A vailable online at
htt://www .cms.hhs,gov/ProspMedicareFeeSvcPmtGen/downloads/FYQ_5..update, hospice e~gim.es an
Medicare Health Care Information
d units of care.pdf. Accessed on March 27, 2009; CMSanalysis of 
for calendar year 2006 claims. Provided by CMS on May 5, 2009.
System data 
2 Offce of  Medicare's Hospice
the Assistant Secretary for Planiiing and Evaluation  (ASPE),"'Use of 
Benefit by Nursuig Facility Residents," March 2000; Medicare Payment Advisory Commission, "Report to
the Congress: Medicare Beneficiaries' Accessto Hospice," May 2002, p. 5.
3 OIG, "Hospice Patients in Nursing  Homes," OEI-05-95-00250, September 1997.
OEl -02-06-00223 Medicare Hospice Care: Services Provided to Beneficiaries
Residing in Nursing Facilties Page 2  Charlene Frizzera 
beneficiary-specific data exist.4  In fact, a recent report from the Medicare Payment 
Advisory Commission noted that Medicare has virtually no information on the hospice 
care it purchases, in terms of either the specific services provided or the quality of care 
obtained.5  It also stated that substantially more data will be needed to modernize 
Medicares payment system for hospice. 
 
A 2009 OIG report determined the extent to which hospice claims for beneficiaries in 
nursing facilities met Medicare coverage requirements.6  The report found that 82 percent 
of hospice claims for beneficiaries in nursing facilities did not meet at least one Medicare 
coverage requirement.  Medicare paid approximately $1.8 billion for these claims.  The 
report also found that for 31 percent of claims, hospices provided fewer services than 
outlined in beneficiaries plans of care. 
 
In this evaluation, we found that 31 percent of Medicare hospice beneficiaries resided in 
nursing facilities in 2006.  Medicare paid $2.59 billion for their hospice care, at an 
average of $960 per week for each hospice beneficiary residing in a nursing facility.  
Hospices most commonly provided nursing, home health aide, and medical social 
services.  They furnished an average of 4.2 visits per week for these three services 
combined.  They also commonly provided drugs.  The results in this memorandum report 
can help CMS and other decisionmakers determine whether the types and frequencies of 
hospice services provided to beneficiaries in nursing facilities meet the goals of the 
hospice benefit and whether current payment rates are aligned with the hospice services 
being provided. 
 
BACKGROUND 
 
The Medicare Hospice Benefit 
The Tax Equity and Fiscal Responsibility Act of 1982 created the Medicare hospice 
benefit for eligible beneficiaries under Medicare Part A.7  The goals of hospice care are 
to help terminally ill beneficiaries continue life with minimal disruption and to support 
beneficiaries families and other caregivers throughout the process.  The care may be 
provided to individuals and their families in the home or other places of residence, such 
as a skilled or other nursing facility.  The care provided to families and other caregivers 
includes counseling and training to provide care for the individual and bereavement 
counseling. 
                                                 
4 Government Accountability Office (GAO), Medicare Hospice Care:  Modifications to Payment 
Methodology May Be Warranted, GAO-05-42, October 15, 2004, pp. 4 and 20; ASPE, Synthesis and 
Analysis of Medicares Hospice Benefit, March 2000. 
5 Medicare Payment Advisory Commission, Report to the Congress:  Reforming the Delivery System, 
June 2008, Chapter 8, p. 224. 
6 OIG, Medicare Hospice Care for Beneficiaries in Nursing Facilities:  Compliance With Medicare 
Coverage Requirements, OEI-02-06-00221. 
7 The Tax Equity and Fiscal Responsibility Act of 1982,  122, P.L. No. 97-248  122, 96 Stat. 324, 356, 
42 U.S.C.  1395x(dd). 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 3  Charlene Frizzera 
To be eligible for Medicare hospice care, a beneficiary must be entitled to Part A of 
Medicare and be certified as having a terminal prognosis with a life expectancy of  
6 months or less if the disease runs its normal course.  Upon a beneficiarys election of 
hospice care, the hospice agency assumes the responsibility for medical care related to 
the beneficiarys terminal illness and related conditions.  This care is palliative, rather 
than curative.  The beneficiary waives all rights to Medicare payment for services related 
to the treatment of the terminal condition or a related condition but retains rights to 
Medicare payment for services to treat conditions unrelated to the terminal illness.8   
 
Hospice services.  A plan of care must be established as set forth in regulations before 
services are provided, and the services must be consistent with the plan of care.9  
Pursuant to Federal statutes and regulations, Medicare covers the following hospice 
services: 
 
  nursing care provided by, or under the supervision of, a registered nurse;  
  physical or occupational therapy or speech-language pathology services;  
  medical social services under the direction of a physician;  
  home health aide and homemaker services;  
  medical supplies (including drugs and biologicals) and the use of medical 
appliances; 
  physician services;  
  short-term inpatient care (including both respite care and procedures necessary for 
pain control and acute and chronic symptom management);  
  counseling (including dietary counseling) with respect to care of the terminally ill 
individual and adjustment to the individuals death; and  
  any other service that is specified in the plan of care as reasonable and necessary 
for the palliation and management of the terminal illness and related conditions 
and for which payment may otherwise be made under Medicare.10  
 
Levels of care and payment.  The Medicare hospice benefit has four levels of care, and 
each level has an all-inclusive, prospectively determined daily rate.  The rate is paid to 
the hospice for each day that a beneficiary is in hospice care, regardless of the number of 
services furnished.  The four levels of care are:  routine home care, continuous home 
care, respite care, and general inpatient care.  Routine home care is the most common 
level of care and includes, but is not limited to, nursing and home health aide services.  
Appendix A provides detailed information on the four levels of care and the payment 
rates. 
 
In addition, Medicare pays for physician services for hospice beneficiaries.  This 
reimbursement may be through Part A or Part B, depending on the physicians 
                                                 
8 42 CFR  418.24. 
9 42 CFR  418.200. 
10 42 CFR  418.202. 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 4  Charlene Frizzera 
relationship with the hospice.  Medicare pays the hospice for physician services under 
Part A when the beneficiarys attending physician is an employee of or is under contract 
with the hospice provider.11  The hospice compensates the physician through salary or 
some other arrangement.  Medicare pays the physician for physician services under Part 
B when the beneficiarys attending physician does not have a payment arrangement with 
the hospice.   
 
Hospice care in nursing facilities.  When a beneficiary resides in a nursing facility, the 
hospice is responsible for providing the hospice services to the beneficiary.  The nursing 
facility provides room and board and care unrelated to the terminal illness.  Medicare 
reimburses the hospice according to the level of care provided, and the beneficiary or a 
third-party payer pays the nursing facility for room and board costs.12 
 
Related Work 
An earlier OIG report found that 28 percent of Medicare hospice beneficiaries resided in 
nursing facilities while they received hospice care in 2005.13  These beneficiaries were 
more than twice as likely as beneficiaries in other settings to have terminal diagnoses of 
ill-defined conditions, mental disorders, or Alzheimers disease.  Another report found a 
number of cases in which the use of respite care for nursing facility beneficiaries may 
have been inappropriate; these cases were referred to CMS for appropriate action.14   
 
METHODOLOGY 
 
To conduct this study, we used complete claims data for all Medicare beneficiaries who 
received hospice care in 2006.  We also used data from a medical record review of a 
stratified random sample of hospice claims for beneficiaries in nursing facilities.  We 
selected a stratified random sample of 470 hospice claims from this file, and our final 
sample included 450 hospice claims.  See Appendix B for detailed information about our 
sample selection. 
 
Medical Record Review 
We used a contractor to collect and review the medical records associated with each 
sampled claim.  The contracted reviewers recorded all hospice services provided to the 
beneficiary during the claim period, with the exception of physician services.15  The 
reviewers also recorded whether drugs were provided to the beneficiary but did not 
identify the drugs or record dosages provided.  The reviewers did not record services 
provided to family members. 
                                                 
11 The beneficiarys attending physician may be a nurse practitioner. 
12 Medicare Benefit Policy Manual, chapter 9, section 20.3.  Available online at 
http://www.cms.hhs.gov/manuals/Downloads/bp 102c09.pdf.  Accessed on February 10, 2009. 
13 OIG, Medicare Hospice Care:  A Comparison of Beneficiaries in Nursing Facilities and Beneficiaries in 
Other Settings, OEI-02-06-00220, December 2007. 
14 OIG, Hospice Beneficiaries Use of Respite Care, OEI-02-06-00222, March 2008. 
15 Services provided by beneficiaries attending physicians are not always included in the hospice records. 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 5  Charlene Frizzera 
The contractor reviewed a total of 447 claims.  For the other three claims, the hospices 
did not provide any documentation to review.16  Because no information on services was 
available for these claims, they were excluded from our analysis.  
 
Analysis 
Using the complete National Claims History file, we calculated the total number of 
Medicare beneficiaries who received hospice care in 2006.17  Hospice claims typically 
cover a 1-month period but could be for shorter periods of time.  After matching this file 
to the Minimum Data Set file, we calculated the total number of Medicare hospice 
beneficiaries who resided in nursing facilities in 2006.  We determined the total dollars 
and the average weekly amount Medicare paid for their hospice care, not including 
physician payments.  In addition, we determined the percentage of claims for these 
beneficiaries by the levels of care provided.  
 
Based on our medical record review of sampled claims, we calculated the percentage of 
claims for which drugs, nursing services, home health aide and homemaker services 
(hereinafter referred to as home health aide services), medical social services, 
counseling, volunteer and other miscellaneous services, physical therapy, occupational 
therapy, or speech-language pathology services were furnished.  The use of medical 
appliances and supplies was not included in our analysis.18  Because a hospice could have 
provided an appliance before the sampled claim period, the use of that appliance may not 
have appeared in the collected medical records. 
 
We calculated the average number of visits hospices provided per week for nursing, 
home health aide, and medical social services.  We described the average length of these 
visits among sampled claims that covered routine care only.  Durations were not recorded 
for a significant percentage of visits, so projecting the average length of visits from our 
sample was unfeasible.  Finally, we compared the types of services provided by 
not-for-profit hospices and for-profit hospices.  We were unable to compare types and 
frequencies of services by level of care provided, because most of the claims in our 
sample were for routine care only.  We tested for statistically significant differences and 
noted in our findings when these differences occurred.     
 
See Appendix C for selected point estimates and their confidence intervals, and see 
Appendix D for the results of our statistical tests. 
 
                                                 
16 We contacted the hospices by telephone and certified mail, but they did not provide the requested 
records.  We have referred these cases to CMS for appropriate action. 
17 We excluded claims that were for physician services only. 
18 Appliances may include durable medical equipment as well as other self-help and personal comfort items 
related to the palliation or management of the patients terminal illness.  See 42 CFR  418.202(f).   
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 6  Charlene Frizzera 
Limitations 
This memorandum report is based on a medical record review of sampled claims.  These 
claims were also the basis for another OIG report, which found that 82 percent of claims 
did not meet at least one Medicare coverage requirement.19  For this memorandum report, 
we presented information on the types and frequencies of services provided by hospices 
to beneficiaries in nursing facilities.  We did not assess whether individual services were 
appropriate.   
 
STANDARDS 
 
This review was conducted in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency and the Executive Council 
on Integrity and Efficiency (now Council of the Inspectors General on Integrity and 
Efficiency). 
                                                 
19 OIG, Medicare Hospice Care for Beneficiaries in Nursing Facilities:  Compliance With Medicare 
Coverage Requirements, OEI-02-06-00221. 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 7  Charlene Frizzera 
RESULTS 
 
Thirty-One Percent of Medicare Hospice Beneficiaries Resided in Nursing Facilities 
in 2006; Medicare Paid $2.59 Billion for Their Hospice Care  
Based on claims data for all Medicare beneficiaries receiving hospice care, we found that 
31 percent of hospice beneficiaries resided in nursing facilities in 2006, compared to 28 
percent in 2005.20  In 2006, 289,544 beneficiaries received hospice care while residing in 
nursing facilities.   
 
Medicare paid hospices approximately $2.59 billion for care provided to beneficiaries 
residing in nursing facilities in 2006.  On average, Medicare paid $960 per week for each 
hospice beneficiary in a nursing facility.  This amount did not cover physician services, 
which were paid for separately from 
the daily rate.  Table 1:  Percentage of Claims by Levels of 
  Care for 2006 
By far, the most common level of 
Percentage of 
hospice care provided to these  Level of Care  Claims 
beneficiaries was routine care.  
Routine care only  91% 
Ninety-one percent of their hospice 
General inpatient care only  3% 
claims were for routine care only.  
Another 3 percent were for general  Routine and general inpatient care only  3% 
inpatient care only.  Most of the 
Routine and continuous care only  2% 
remaining claims were for a 
All other levels or combinations  
combination of routine care and one or  1% 
of levels of care 
more other levels of care.  See Table 1. 
Source:  OIG analysis of hospice claims, 2008. 
 
Hospices Most Commonly Provided Nursing, Home Health Aide, and Medical 
Social Services; They Also Commonly Provided Drugs 
Based on the medical record review, hospices provided nursing services to beneficiaries 
for 96 percent of claims in 2006.  Hospices furnished home health aide services to 
beneficiaries for 73 percent of claims and medical social services for 68 percent of 
claims.  Hospices provided counseling for 58 percent of claims.  Volunteer and other 
miscellaneous services were provided to a lesser extent.  Physical therapy, occupational 
therapy, and speech-language pathology services occurred only in rare instances.  See 
Table 2.  In addition to these services, drugs were provided to beneficiaries for 96 percent 
of claims. 
 
                                                 
20 OIG, Medicare Hospice Care:  A Comparison of Beneficiaries in Nursing Facilities and Beneficiaries in 
Other Settings, OEI-02-06-00220, December 2007, p. 8. 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 8  Charlene Frizzera 
The medical record review revealed some differences between the types and frequencies 
of services provided by for-profit hospices and those provided by not-for-profit hospices.  
Home health aide services were 
Table 2:  Percentage of Claims by Types of  furnished for a higher percentage 
Services Provided  of claims from for-profit hospices 
than from not-for-profit hospices.  
Percentage 
Type of Service 
of Claims*  These services were provided for  
79 percent of for-profit hospice 
Nursing services  96% 
claims, compared to 67 percent of 
Home health aide services  73% 
not-for-profit hospice claims.  By 
Medical social services  68%  contrast, volunteer and other 
Counseling (including spiritual, pastoral,   miscellaneous services were 
58% 
or chaplain services)  furnished for a lower percentage of 
Volunteer and other miscellaneous services  14%  claims from for-profit hospices 
than from not-for-profit hospices,  
Physical therapy, occupational therapy, or  
<1% 
speech-language pathology services  8 percent and 21 percent, 
respectively.  These differences 
Source:  OIG analysis of medical record review results, 2008. 
*Percentages are not mutually exclusive.  were statistically significant at the 
95-percent confidence level. 
 
Hospices Provided an Average of 4.2 Visits Per Week for the Three Most Common 
Services Combined 
Hospices provided an average of 4.2 visits per week for nursing services, home health 
aide services, and medical social services combined.  Although nursing services were 
furnished for the greatest percentage of claims, they did not occur the most frequently.  
Home health aide services were provided more often, at an average of 2.2 times per 
week.  For over half of the claims, beneficiaries received about 1 to 3 home health aide 
visits per week.  Nursing services 
Table 3:  Average Number of Visits Per Week 
averaged 1.7 visits per week, with 
beneficiaries receiving about 1 to   for the Most Common Services 
2 nursing visits per week for  
Average Number of 
Type of Service 
two-thirds of the claims.  Medical  Visits Per Week* 
social services usually occurred on a 
Home health aide services  2.2 
monthly or bimonthly basis, averaging 
Nursing services  1.7 
about 1.7 visits per month or 0.4 visits 
Medical social services  0.4 
per week.  See Table 3. 
 
All three services combined  4.2 
As noted in the methodology, 
durations were not recorded for a  Source:  OIG analysis of hospice claims, 2008. 
*The averages for individual services do not sum to the average for all 
significant percentage of visits, so 
three services combined because of rounding. 
projecting the average length of visits 
from our sample was unfeasible.  Based on the limited number of visits whose lengths 
were recorded and which were for routine care only, we found that home health aide 
visits were 65 minutes on average, although their duration ranged from 2 minutes to  
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 9  Charlene Frizzera 
8 hours.  Nursing services were shorter, at 53 minutes on average, and ranged from  
5 minutes to 4 hours.  Medical social service visits were shorter still, at 43 minutes on 
average, and ranged from 5 minutes to 2.6 hours.   
 
CONCLUSION 
 
We found that 31 percent of Medicare hospice beneficiaries resided in nursing facilities 
in 2006.  Medicare paid hospices approximately $2.59 billion for care provided to 
beneficiaries in nursing facilities in 2006.  On average, Medicare paid $960 per week for 
hospice care for each hospice beneficiary in a nursing facility, not including payment for 
physician services.  This care most commonly included nursing, home health aide, and 
medical social services.  Hospices furnished an average of 4.2 visits per week for these 
three services combined.  They also commonly provided drugs. 
 
The results of this memorandum report can help CMS and other decisionmakers 
determine whether the types and frequencies of hospice services provided to beneficiaries 
in nursing facilities meet the goals of the hospice benefit.  The results can also help 
decisionmakers determine whether current payment rates are aligned with the hospice 
services being provided. 
 
This report is being issued directly in final form because it contains no recommendations.  
If you have comments or questions about this report, please provide them within 60 days.  
Please refer to report number OEI-02-06-00223 in all correspondence.
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 10  Charlene Frizzera 
APPENDIX A 
 
HOSPICE PAYMENT RATES 
 
The Centers for Medicare & Medicaid Services (CMS) publishes general hospice 
payment rates annually to be used for each level of care.21  The rates are adjusted based 
on the beneficiarys geographic location.  The levels of care and the fiscal year 2006 
Medicare unadjusted daily rates for each are as follows: 
 
  Routine Home Care ($126.49):  The routine home care rate is paid to the hospice 
for each day that the beneficiary is under the care of the hospice and is not 
receiving one of the other categories of care.  Routine home care includes, but is 
not limited to, nursing and home health aide services.  Routine home care may be 
provided in the home or other places of residence, such as a nursing facility. 
 
  Continuous Home Care ($738.26):  Continuous home care is allowed only during 
periods of crisis in which a beneficiary requires continuous care to achieve 
palliation or management of acute medical symptoms.  It is covered only as 
necessary to maintain the terminally ill beneficiary at home.  The care must be 
predominantly nursing care.  Continuous home care may be provided in the home 
or other places of residence, such as a nursing facility.  The continuous home care 
rate is divided by 24 hours to determine an hourly rate.  A minimum of 8 hours 
must be provided. 
 
  Respite Care ($130.85):  Respite care is short-term inpatient care provided to the 
beneficiary when necessary to relieve the beneficiarys caregiver(s).  Respite care 
may be provided only on an occasional basis and is not reimbursed for more than 
5 consecutive days.  Respite care may be provided in a Medicare- or  
Medicaid-certified hospice inpatient facility, hospital, skilled nursing facility, or 
nursing facility. 
 
  General Inpatient Care ($562.69):  General inpatient care is for pain control and 
symptom management that cannot feasibly be provided in other settings.  General 
inpatient care may be provided in a Medicare- or Medicaid-certified hospice 
inpatient facility, hospital, or skilled nursing facility. 
 
 
                                                 
21 CMS, Medicare Claims Processing Manual, Pub. No. 100-04, ch. 11, Transmittal 663, Change Request 
3977.  Available online at http://www.cms.hhs.gov/transmittals/downloads/R663CP.pdf.  Accessed on 
January 28, 2009. 
 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 11  Charlene Frizzera 
APPENDIX B 
 
METHODOLOGY 
 
We based this study on data from a medical record review of a stratified random sample 
of hospice claims for beneficiaries in nursing facilities.  
 
Sample Selection 
Using the National Claims History file, we extracted all Medicare hospice claims that had 
service dates in 2006 and were received through December 2006.  Hospice claims 
typically cover a 1-month period but could be for shorter periods.  We matched the 
claims data to the Medicare Enrollment Database by health insurance claim number to 
identify the Social Security number for each beneficiary.    
 
Because hospice claims in 2006 did not include place of service, we used the Minimum 
Data Set (MDS) to identify nursing facility stay dates.  The MDS includes assessments 
on all residents in Medicare- or Medicaid-certified nursing facilities.  We used the MDS 
assessments received from January 2004 through December 2006 to create a record for 
each beneficiary of the dates when he or she resided in a nursing facility.   
 
We matched the hospice claims to these nursing facility stay dates by the beneficiaries 
Social Security numbers to identify claims for beneficiaries while they resided in nursing 
facilities.  We created a file that included all hospice claims that corresponded to 
beneficiaries nursing facility stays.  This file included 812,668 hospice claims for 
231,978 beneficiaries.22 
 
We selected a stratified random sample of 470 hospice claims from this file.  We 
stratified the sample to ensure that we included claims for beneficiaries who had  
high-dollar-amount claims and had received hospice care while in a nursing facility for 
an extended period.  This stratum comprised all claims for hospice beneficiaries with an 
average hospice reimbursement of $400 or more per day for at least 60 days while in a 
nursing facility during 2006.  The other two strata comprised claims for all remaining 
beneficiaries who received hospice care while in a nursing facility:  one stratum included 
all claims for beneficiaries with a maximum claim amount of $3,000 or less, and the 
other included all claims for beneficiaries with a maximum claim amount of more than 
$3,000.  We then selected a random sample of claims from each stratum.  See Table B-1. 
 
 
 
 
                                                 
22 These numbers were based on claims received through December 2006. 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 12  Charlene Frizzera 
 
Table B-1:  Sample Selection 
 
Initial  Final 
 Description of Strata  Population 
Sample  Sample   
 
Claims for beneficiaries with high  Average claim    
average daily claim amounts and  amount > $400/day  1,441  35  33 
extended nursing home stays  for at least 60 days   
 
Maximum claim   
  279,697  85  82 
Claims for all other beneficiaries  amount < $3,000   
with nursing home stays 
Maximum claim   
531,530  350  335 
amount > $3,000 
 
     Total claims  812,668  470  450   
 
We excluded 12 claims from our sample because the hospices were currently under 
investigation by the Office of Inspector General.  We excluded an additional claim 
because the beneficiarys nursing facility stay information was incomplete and an 
additional three claims because we were unable to locate the hospices.23  We also 
excluded another four claims because the contractor erred in record collection.24  Our 
final sample included 450 claims. 
 
As a last step, we identified the names and addresses of the hospices associated with each 
sampled claim by using the Online Survey and Certification Reporting System (OSCAR).  
We matched the hospice provider numbers in the claims file with the OSCAR data.  We 
also identified hospices that were for-profit and those that were not-for-profit using a 
variable that indicated the type of provider ownership.  In total, 43 percent of claims were 
from not-for-profit hospices and 53 percent of claims were from for-profit hospices.  The 
remaining 4 percent were for services provided by government hospices.   
 
Medical Record Review 
We used a contractor to collect and review the medical records associated with each 
sampled claim.  For each claim, we requested that the hospices provide the relevant 
hospice election statement, plan(s) of care,25 record of services provided (including those 
furnished under arrangement or contract with the hospice), certification(s) of terminal 
illness, and clinical information and other documentation that supported the medical  
                                                 
23 The hospices telephone numbers were disconnected and the hospices could not be reached by certified 
mail.  We have referred these cases to CMS for appropriate action. 
24 The contractor collected records for the wrong claim period in three cases and contacted the wrong 
provider in one case.  
25 Although only one plan of care is in effect at any given time, some beneficiaries had more than one plan 
of care during the claim period.    
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 13  Charlene Frizzera 
prognosis.  Hospices are required to keep all of this information in the clinical record that 
they establish for every individual receiving care and services.26  We requested these 
records for the claim period and, if possible, for the 30 days preceding and the 30 days 
following the claim period. 
                                                 
26 42 CFR  418.74. 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 14  Charlene Frizzera 
APPENDIX C 
 
CONFIDENCE INTERVALS FOR SELECTED ESTIMATES 
 
 
 
95-Percent 
Type of Service  n  Point Estimate 
Confidence Interval   
 
Nursing services  447  96.3%  93.3%  97.9% 
 
Home health aide services  447  73.0%  68.1%  77.4% 
 
Medical social services  447  68.0%  63.0%  72.7%   
Counseling (including spiritual, pastoral,   
447  57.6%  52.4%  62.6% 
or chaplain services)   
Volunteer and other miscellaneous   
447  14.4%  11.3%  18.2% 
services 
 
Physical therapy, occupational therapy,   
447  0.6%  0.2%  1.8% 
or speech-language pathology services 
 
Source:  Office of Inspector General (OIG) analysis of medical record review results, 2008.   
 
 
95-Percent 
  n  Point Estimate 
Confidence Interval   
 
Drugs*  446  96.1%  93.5%  97.8%  
 
Source:  OIG analysis of medical record review results, 2008. 
 
*Reviewers did not indicate for one claim whether drugs were provided. 
 
 
 
Type of Service   n  Average Number of  95-Percent   
Visits Per Week  Confidence Interval 
 
 
Home health aide services  447  2.16  2.01  2.32 
 
Nursing services  447  1.68  1.59  1.77 
 
Medical social services  447  0.38  0.35  0.42   
 
All three services combined*  447  4.23  4.03  4.42   
 
Source:  OIG analysis of medical record review results, 2008. 
 
*The averages of individual services do not sum to the average for all three services combined because of rounding. 
 
 
 
 
 
 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities  Page 15  Charlene Frizzera 
APPENDIX D 
 
WEIGHTED CHI-SQUARE TEST COMPARING NOT-FOR-PROFIT AND  
FOR-PROFIT HOSPICES 
 
Percentage of Claims  Percentage of Claims 
From Not-for-Profit  From For-Profit 
Type of Service  Hospices for Which  Hospices for Which  P-Value 
Services Were  Services Were 
Provided  Provided 
Nursing services  97.6%  96.5%  0.55 
Home health aide services*  67.0%  78.6%  0.02 
Medical social services  67.5%  69.6%  0.69 
Counseling (including spiritual, 
59.0%  57.9%  0.83 
pastoral, or chaplain services) 
Volunteer and other 
21.2%  8.3%  0.0005 
miscellaneous services* 
Physical therapy, occupational 
therapy, or speech-language  0.9%  0.4%  N/A 
pathology services** 
Source:  Office of Inspector General (OIG) analysis of medical record review results, 2008. 
* Differences between percentages of claims from not-for-profit hospices and those from for-profit hospices were statistically 
significant at the 95-percent confidence level. 
**Percentages for these services were too small for statistical testing. 
 
Percentage of Claims  Percentage of Claims 
From Not-for-Profit  From For-Profit 
  Hospices for Which  Hospices for Which  P-Value 
Services Were  Services Were 
Provided  Provided 
Drugs  96.3%  96.6%  0.88 
Source:  OIG analysis of medical record review results, 2008. 
 
 
OEI-02-06-00223  Medicare Hospice Care:  Services Provided to Beneficiaries 
Residing in Nursing Facilities