Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

M H :

EDICARE  OSPICES
C
ERTIFICATION AND

C
ENTERS FOR

M & M S
EDICARE  EDICAID  ERVICES 

O
VERSIGHT 

Daniel R. Levinson

Inspector General 

April 2007

OEI-06-05-00260
 Office of Inspector General 
http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, as 
amended, is to protect the integrity of the Department of Health and Human Services (HHS) 
programs, as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors in 
carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations.  These assessments help reduce waste, abuse, 
and mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  Specifically, these evaluations focus on preventing fraud, waste, or abuse and 
promoting economy, efficiency, and effectiveness in departmental programs.  To promote 
impact, the reports also present practical recommendations for improving program 
operations.   
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of 
allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust 
enrichment by providers.  The investigative efforts of OI lead to criminal convictions, 
administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, 
rendering advice and opinions on HHS programs and operations and providing all legal 
support in OIG's internal operations.  OCIG imposes program exclusions and civil monetary 
penalties on health care providers and litigates those actions within HHS.  OCIG also 
represents OIG in the global settlement of cases arising under the Civil False Claims Act, 
develops and monitors corporate integrity agreements, develops compliance program 
guidances, renders advisory opinions on OIG sanctions to the health care community, and 
issues fraud alerts and other industry guidance.  I N T R O D U C T I O N
  E X E C U T I V E   S U M M A R Y  

OBJECTIVE 
To assess, for Medicare hospices certified by State agencies: 
1.	 the timeliness and results of hospice certification surveys performed 
by State agencies, and 
2.	 the extent of the Centers for Medicare & Medicaid Services (CMS) 
oversight of the Medicare hospice program. 
BACKGROUND 
Medicare Part A covers hospice care provided to terminally ill patients.  
In recent years, this Medicare benefit has grown in terms of patients 
served, expenditures, and number of hospices.   
Organizations that provide hospice care must be certified by State 
agencies as meeting minimum participation standards prescribed by 
CMS. CMS uses Federal comparative surveys and annual performance 
reviews to evaluate State agencies survey and certification operations. 
Certified hospices must undergo recertifications; however, neither law 
nor regulation specifies the frequency of recertification. Instead, CMS 
notifies States of the certification frequency for hospices through its 
annual budget request policy memorandum to the State agencies. For 
fiscal year (FY) 2005, CMS scheduled hospice certification surveys for 
every 6 years, but for FY 2006, CMS changed the frequency to every  
8 years on average.  This change was the result of budget reductions.   
Whether 6 years or 8 years, the frequency of hospice certification is far 
different from the certification frequencies required for nursing homes, 
hospitals, and home health agencies.  While the priority for hospice 
certification may be lower, CMS did direct State agencies, for FY 2006 
surveys, to target 5 percent of the hospices most at risk for having 
quality problems. Using the results of certification surveys and 
complaint investigations, CMS has the authority to apply only one 
enforcement remedytermination of poorly performing hospices from 
Medicare. 
The report findings are based primarily on analysis of data from CMSs 
Online Survey Certification and Reporting system. We analyzed these 
data for 2,537 hospices that were certified by State agencies and were 
Medicare providers as of July 5, 2005.  We also interviewed staff at 
CMS headquarters and regional offices, State agencies, and professional 
organizations knowledgeable about hospice issues. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  i  EE XX EE CC UU TT II VV EE    SS UU MM MM AA RR YY

FINDINGS 
Eighty-six percent of hospices were certified within 6 years, as 
required, while 14 percent averaged 3 years past due. Hospices that 
were 3 years past due for certification had not been surveyed for 
9 years3 years longer than the CMS standard at the time of our review. 
Two CMS regions accounted for 56 percent of the past-due hospice 
certifications: Region V (33 percent) and Region IX (23 percent). Only 
24 percent of all certified Medicare hospices are located in these two 
regions. 
Applying an 8-year certification frequency to our hospice data decreased 
the percentage of past-due certifications from 14 percent to 9 percent. 
However, because the FY 2006 standard is an average rather than a 
defined interval, it is possible that a State agency could certify some 
hospices less often than every 8 years and still meet the requirement. 
Health deficiencies were cited for 46 percent of hospices surveyed and 
for 26 percent of hospices investigated for complaints; many 
deficiencies related to patient care. The most frequent health 
deficiencies cited during certification surveys and complaint investigations 
centered on patient care planning and quality. These deficiencies 
indicated that written care plans either were not prepared or lacked 
important elements, or that measures to ensure quality patient care were 
insufficient. Fifteen percent of hospices surveyed between July 2002 and 
July 2005 received another citation for the same deficiency cited during a 
previous survey. Of the hospices with deficiencies cited during complaint 
investigations, 49 percent were also cited for the same deficiencies during 
certification surveys over the same period. 
CMS and State agencies rarely use methods other than certification 
surveys and complaint investigations to monitor or enforce hospice 
performance. CMS rarely includes hospices in Federal comparative 
surveys or annual State performance reviews. Further, both CMS and 
State agencies infrequently analyze existing hospice performance data. 
Finally, hospice deficiency data from certification surveys do not include 
ratings for scope (how many patients are affected) and severity (extent to 
which patients safety or health is affected), and individual patient 
assessment data for hospices are not available. For all these reasons, 
targeting at-risk hospices, as CMS required for FY 2006, may be difficult 
for State agencies. CMS has not provided State agencies any direct 
guidance or specific criteria to identify the at-risk hospices. From July 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  ii  EEE XXX EEE CCC UUU TTT III VVV EEE     SSS UUU MMM MMM AAA RRR YYY
2002 to July 2005, CMS terminated one hospice from Medicare, and few 
State agencies exercised their own enforcement measures. 
RECOMMENDATIONS 
To improve oversight of the Medicare hospice program, we recommend 
that CMS: 
Provide guidance to State agencies and CMS regional offices 
regarding analysis of existing data and identification of at-risk 
hospices. CMS should provide written guidance and/or training that 
specifies key performance indicators or analysis techniques for hospice 
data. CMS should also include in its written guidance and/or training 
how States should identify, using analysis of available data, which 
hospices are at risk for quality problems. Instituting scope and severity 
ratings similar to those used for nursing facility deficiency data could 
provide another method for identifying at-risk hospices. Alternatively, 
CMS could develop a standard set of indicators for hospice performance, 
complete data analysis centrally, and ensure that resulting reports are 
routinely provided to CMS regional office and State agency staffs. 
Include hospices in Federal comparative surveys and annual State 
performance reviews. These surveys and reviews allow CMS to ensure 
that State agencies meet CMSs performance requirements and to 
understand overall State agency operations. 
Seek regulatory or statutory changes to establish specific 
requirements for the frequency of hospice certification.  Section 
1861(dd)(2)(G) of the Social Security Act allows the Secretary to 
promulgate other regulatory requirements for hospices. CMS should 
seek a regulatory change that would specify a fixed certification 
frequency for Medicare hospices with commensurate funding for staffing 
and implementation. In lieu of a regulatory change, CMS could pursue 
a statutory change and related funding. Such regulatory or statutory 
and related budgetary changes could help to ensure that CMS 
maintains its certification schedules for hospices. 
CMS should also seek to increase the frequency of hospice certifications 
as part of the regulatory or statutory change. The accrediting 
organizations, the Joint Commission for the Accreditation of Healthcare 
Organizations and the Community Health Accreditation Program, have 
set an industry standard of certification every 3 years for hospices. For 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  iii  E X E C U T I V E   S U M M A R Y  
CMS, surveys of hospices are the primary method for gaining 
information about hospice performance in caring for patients. 
Seek legislation to establish additional enforcement remedies for 
poor hospice performance.  Currently, CMSs only enforcement 
remedy against poorly performing hospices is termination of the hospice 
from the Medicare program.  Our results showed that termination is 
rarely imposed.  Less severe remedies could be effective for addressing 
performance problems that do not merit termination. A potential array 
of enforcement measures could include directed plans of correction, 
directed in-service training, denials of payment for new admissions, civil 
monetary penalties, and imposition of temporary management.   
AGENCY COMMENTS  
In its comments on the draft report, CMS concurred with the 
recommendation to provide greater guidance concerning analysis of 
existing data and identification of at-risk hospices.  To this end, CMS 
reports exploring and implementing methods to become more efficient 
in targeting its limited resources toward providers most in need of 
closer oversight.  CMS also concurred with the recommendation to 
include hospices in annual State performance reviews.  However, CMS 
did not concur with greater inclusion of hospices in Federal comparative 
surveys, citing budget limitations. Additionally, CMS did not concur 
with the recommendation that it make a regulatory change to establish 
frequency requirements for hospice certification. CMS stated that, 
given resource issues, a statutory change, necessitating congressional 
action, is more appropriate.  Finally, CMS is still considering the last 
recommendation:  to pursue new enforcement remedies for poor hospice 
performance.  
OFFICE OF INSPECTOR GENERAL RESPONSE 
We continue to recommend that CMS include hospices in the Federal 
comparative surveys and set a frequency requirement for hospice 
certification. We acknowledge that this frequency requirement can be 
set by a statutory change.  Consequently, we changed the 
recommendation that was included in the draft report to include the 
option of seeking the requirement through either a statutory change or 
a regulatory change. We look forward to CMSs comments on this final 
report addressing its consideration of establishing additional 
enforcement remedies for poor hospice performers.  
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  iv    T A B L E   O F   C O N T E N T S  

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

I N T RO DUC T IO N. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

F I N D IN G S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Eighty-six percent of hospices were certified timely; 14 percent   

were past due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Deficiencies in patient care were cited during certification    

surveys and complaint investigations. . . . . . . . . . . . . . . . . . . . . . .  10

CMS and State agencies rarely use methods other than 

certificationsurveys and complaint investigations  . . . . . . . . . . . .  12

R E C O MMEN D A T ION S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

  AgencyComments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

Office of Inspector General Response. . . . . . . . . . . . . . . . . . . . . . .  20

E N D NO T ES   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

A:	  Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

B: 	FY 2005 Selected CMS Priority Survey Activities . . . . . . . . . .  31

C: 	FY 2006 Changes to Selected CMS Priority   

Survey Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

D:	  AgencyComments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

A C K NO WL E D G M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
 IDI NNE TTS RRI OOG DDN UU  ~CC  TTDII ROO ANN F T
  II NN TT RR OO DD UU CC TT II OO NN   

OBJECTIVE 
To assess, for Medicare hospices certified by State agencies: 
1.	 the timeliness and results of hospice certification surveys performed 
by State agencies, and 
2.	 the extent of the Centers for Medicare & Medicaid Services (CMS) 
oversight of the Medicare hospice program. 
BACKGROUND 
Medicare Hospice Benefit 
The Tax Equity and Fiscal Responsibility Act of 19821 established the 
Medicare hospice benefit for eligible beneficaries under Medicare  
Part A.2, 3  As defined by CMS, hospice care focuses on relief of pain and 
uncomfortable symptoms for terminally ill patients, rather than 
curative care or life-prolonging treatment.4,5  Medicare hospice services 
include nursing care, counseling, and home health aide services, as well 
as drugs and medical supplies.  Hospice care is provided either by 
freestanding hospices or by hospices owned or operated by home health 
agencies, hospitals, and skilled nursing facilities.  In the late 1980s, 
nearly all patients enrolled in hospice care had a primary diagnosis of 
cancer,6 but by 2004, more than half of hospice enrollment was for other 
terminal illnesses, such as end-stage heart disease or dementia.7 
Hospice Utilization and Cost 
In recent years, the Medicare hospice benefit has grown in terms of 
patients served, number of hospices, and expenditures.  From 2001 to 
2004, the number of patients using Medicare hospice services increased 
nearly 34 percent (from 605,239 beneficiaries to 809,431 benficiaries),8 
while overall enrollment in Medicare rose 4.25 percent.9 As of 
July 5, 2005, according to CMS data, 2,774 hospices were certified for 
Medicare,10 an increase of approximately 11 percent since 2003.  
Expenditures for the Medicare hospice benefit have risen from  
$3.5 billion in 2001 to $8.6 billion in 2005, a 145-percent increase.11, 12 
In 2005, expenditures for Medicare hospice services accounted for  
4.8 percent of total Part A expenditures.13 
Hospice Participation In Medicare 
Medicare regulations set minimum standards, called conditions of 
participation, with which hospices must comply to participate in the 
Medicare hospice program.14 On May 27, 2005, CMS published a 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  1  III NNN TTT RRR OOO DDD UUU CCC TTT III OOO NNN
proposed rule modifying the current conditions of participation for 
Medicare hospices; the comment period ended July 26, 2005.15 As of 
October 2006, CMS had completed its evaluation of all comments 
received.16 
CMS approves hospices for Medicare participation after receiving 
results of hospice surveys from one of two entitiesa State agency or a 
recognized accreditation organization.17 These surveys assess the 
extent to which hospices meet the conditions of participation. As of 
July 2005, State agencies had certified 92 percent of Medicare 
hospices.18 State surveyors had reviewed each of these hospices and 
had indicated to CMS that the hospices certification results met the 
minimum requirements for Medicare participation. For the same 
period, the remaining 8 percent of Medicare hospices had undergone 
accreditation surveys deemed by CMS to meet or exceed the standards 
of the Medicare conditions of participation. The accreditation 
organizations recognized by CMS for this purpose are the Community 
Health Accreditation Program (CHAP) and the Joint Commission for 
the Accreditation of Healthcare Organizations (JCAHO). 
Hospice Certification Surveys by State Agencies 
State agencies, under contract to CMS, conduct onsite certification 
surveys to determine whether hospices meet Medicare health, safety, 
and program standards. They conduct surveys for: (1) an initial 
certification, (2) a recertification, (3) a followup or revisit after an earlier 
survey has cited deficiencies, and (4) an investigation of complaints. 
During all surveys, State surveyors must cite deficiencies when hospices 
fail to meet conditions of participation or other CMS program 
standards. 
CMS guidelines on certification frequency. Neither law nor regulation 
specifies the frequency of Medicare certification surveys for hospices. In 
contrast, nursing facility certification is required by statute at least 
every 15 months, with a 12-month average.19 Home health agency 
certifications are due at least every 36 months.20  Accreditation 
organizations survey hospices every 3 years. 
CMS establishes the frequency and priority of hospice certification as 
part of its budget process for State agency survey and certification 
activities. The CMS fiscal year (FY) 2005 Budget Call Letter, which 
provided survey instructions to the State agencies, required certification 
surveys of Medicare hospices at least every 6 years.21 This 6-year 
standard has been in effect since FY 2000. The FY 2005 Budget Call 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  2  I N T R O D U C T I O N

Letter also ranked survey and certification activities in a four-tier 
priority system.  Tier I, the highest priority, encompassed activities 
required by statute and thus did not include hospices.  CMS required 
State agencies to complete all Tier I activities before completing those in 
Tiers II through IV, but planning for all survey and certification 
activities in a fiscal year was ongoing.  Complaint investigations for all 
provider types, including hospices, fell under Tier II.  Hospice 
certifications, with a few exceptions, appeared in Tier III. (See 
Appendix B for a more detailed explanation of  FY 2005 survey and 
certification priorities.) 
In August 2005, CMS released its FY 2006 Mission & Priority 
Document,22  which, like the FY 2005 Budget Call Letter, provided 
survey instructions to the State agencies.  For FY 2006, hospice 
certifications were still a Tier III priority; however, the frequency of 
hospice certification changed from every 6 years to every 8 years on 
average.  CMS attributed this change in survey frequency specifically to 
reductions from the Presidents 2005 proposed budget which affected 
the base for 2006.23  CMS also noted in this document that part of this 
reduction had targeted the survey and certification functions.  CMS 
added a new Tier II requirement for a 5-percent targeted survey of 
State-identified hospices most at risk for quality problems.  CMS did not 
specify how State agencies are to identify at-risk hospices.  Finally, 
under Tier IV, States are encouraged to conduct additional surveys and 
bring the average down to 6 years, if resources permit. (See Appendix C 
for a more detailed explanation of FY 2006 survey and certification 
priorities.)   
Complaint investigations. Complaints against certified hospices to the 
State agencies by various parties, e.g., ombudsmen, patients, or 
patients families, trigger an investigation process which often begins 
with an onsite visit.  Surveyors determine whether they can 
substantiate allegations and may identify other deficiencies during the 
investigations. State surveyors, at their discretion, may expand the 
investigations into full certification surveys.  As noted, complaint 
investigations fall into Tier II and thus have higher priority than 
hospice certification, found in Tier III. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  3  II NN TT RR OO DD UU CC TT II OO NN
CMS Oversight Activities 
CMS is responsible for imposing remedies or sanctions on noncompliant 
hospices and for conducting Federal monitoring surveys. 
Enforcement for noncompliance. State surveyors cite deficiencies against 
hospices that are not compliant with the Medicare conditions of 
participation. If they are not corrected in a timely manner, some cited 
deficiencies may be severe enough to warrant enforcement actions by 
CMS or State agencies. Deficiencies cited against hospices, unlike those 
against nursing facilities, have no ratings for scope (how many patients 
are affected) or severity (extent to which patients safety or health is 
affected). Termination from the Medicare program is the only 
enforcement action that CMS can initiate against noncompliant 
hospices.24 In contrast, CMS may impose civil monetary penalties or 
denial of Medicare payments as well as terminations on nursing 
facilities. State agencies may also initiate their own enforcement 
actions against hospices based on survey results. 
Federal monitoring surveys. CMS monitors State agencies Medicare 
certification processes through two Federal monitoring surveys 
comparative surveys and annual performance reviews. CMS uses 
comparative surveys to assess State surveyor performance through a 
Federal resurvey, conducted within 60 days of a State certification 
survey of any Medicare provider subject to these surveys, which 
includes hospices. CMS also conducts annual performance reviews of 
State agencies to evaluate survey and certification operations overall. 
CMS Oversight Data 
As part of its oversight responsibility, CMS collects national and State 
survey data, including data for Medicare hospices certified by the State 
agencies, which it maintains in its Quality Improvement & Evaluation 
System (QIES). One component of QIES is the Online Survey 
Certification and Reporting system (OSCAR), from which CMS can 
extract national and State data. OSCAR contains provider performance 
data collected from State certification surveys. It also maintains 
information about Federal monitoring surveys and enforcement actions. 
State agencies enter provider, survey, and complaint information into 
CMSs Automated Survey Processing Environment (ASPEN), which is 
uploaded to the OSCAR system.25 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  4  II NN TT RR OO DD UU CC TT II OO NN

METHODOLOGY 
We based the report findings primarily on analysis of OSCAR data for 
all hospices that were certifed for Medicare by State agencies and were 
active hospice providers as of July 5, 2005. Our analysis did not include 
the 8 percent of hospices with JCAHO or CHAP accreditation that CMS 
had deemed as meeting Medicare standards. To assess the extent to 
which State agencies met CMS requirements for frequency of hospice 
certification, we applied CMSs criteria for FY 2005 (certification every 
6 years) and FY 2006 (certification every 8 years on average). We 
analyzed health-related deficiencies cited against hospices by State 
agencies, but we did not include life-safety code deficiencies. Interviews 
with CMS staff and surveys of State agencies and accreditation 
organizations provided additional information on oversight activities 
from State, national, and provider perspectives. (See Appendix A for a 
detailed methodology.) 
Hospice Study Population 
Of the 2,774 hospices in the OSCAR database, we identified 2,537 that 
were certified for Medicare by State agencies and that were active 
Medicare providers as of July 5, 2005. We eliminated 220 accredited 
hospices that CMS had deemed as meeting Medicare standards and 
17 hospices that had received no Medicare hospice payments in 
CY 2004.26 
Data Collection and Analysis 
We determined from the OSCAR data the frequency and results of 
hospice certification surveys, results of complaint investigation surveys, 
completion of Federal monitoring surveys, and enforcement actions 
taken. Data on Medicare payments to the State-certified hospices from 
1998 to 2004 came from the Healthcare Information System (HCIS). 
We conducted followup with the five States that had the greatest 
number of hospices past due for certification or the longest past-due 
certifications. We surveyed all State agencies to obtain information 
about their actions and priorities regarding hospices. Finally, we 
interviewed key staff from CMS headquarters and regional offices and 
from professional associations concerning oversight of Medicare 
hospices. 
Certification frequency. Using OSCAR data, we calculated the 
frequency of certification surveys and the number of Medicare 
hospices for which State agencies met the 6-year standard for 
certification. We used two timeframes: 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  5  I N T R O D U C T I O N

Prior Survey-------------------Last Survey------------------July 5, 2005 
1.	 Date of last certification survey to July 5, 2005. For each 
State-certified hospice, we calculated the elapsed time between its 
last certification survey and July 5, 2005.  This identified hospices 
for which the last certification surveys were (a) 6 years old or less 
or (b) more than 6 years old.   
2.	 Date of prior certification survey to date of the last certification 
survey. For each hospice in group (a) above, we calculated the 
elapsed time between the prior certification survey and the last 
certification survey.  We then compared the elapsed times to the 
6-year standard. This analysis does not include hospices that 
were certified as new providers during their last surveys. 
Based on the results for timeframe 1, we contacted five States that 
had the greatest number of hospices with (1) past-due certifications 
and (2) certifications more than 6 years past due; i.e., the last 
certification was 12 or more years ago. Three States (California, 
Illinois, and Michigan) met both criteria.  We then selected the next 
State remaining on each list (Minnesota and Maryland).  For these 
States, we verified whether they had reported all survey activities 
and we inquired about what circumstances, if any, contributed to the 
past due certifications we had identified.  Finally, for the timeframe 
encompassing the date of each hospices last certification survey to 
July 5, 2005, we calculated how many hospices in our study 
population had been certified within 8 years. 
Survey results, Federal monitoring, and enforcement. We analyzed 3 years 
of OSCAR data (July 5, 2002, through July 5, 2005) for information 
about certification deficiencies for 1,394 hospices surveyed in that 
period. We also examined the same OSCAR hospice data for all 981 
complaint investigations conducted and for Federal monitoring surveys 
and enforcement actions, if any. 
From these data, we determined the number of hospices cited for 
health-related deficiencies and the types and frequencies of these 
deficiencies.  Our analysis did not include deficiencies cited for  
life-safety codes, which address building, fire, and environmental codes.  
We also determined the number of complaint investigation surveys for 
hospices, frequency of deficiencies cited, and survey outcomes.   
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  6  III NNN TTT RRR OOO DDD UUU CCC TTT III OOO NNN
From the information on Federal monitoring surveys, we identified the 
extent to which the surveys included hospices. We also counted how 
many terminations for enforcement purposes were either initiated or 
completed against hospices. Through interviews, we addressed CMSs 
annual State agency performance reviews with respect to hospices. 
Lastly, discussions with CMS and a survey of all State agencies 
provided qualitative data on workload priorities and enforcement tasks. 
CMS monitoring and oversight. We conducted structured interviews with 
staff from CMS headquarters and regional offices to obtain information 
on the current hospice issues affecting oversight and on the extent to 
which CMS uses survey data to monitor hospice performance. We also 
interviewed staff at professional hospice associations and accreditation 
organizationsnamely, the National Hospice and Palliative Care 
Organization (NHPCO), the National Association for Home Care and 
Hospice, CHAP, and JCAHOfor their perspectives of CMSs 
monitoring and oversight activities. 
Standards 
This study 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. 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  7  FFF III NNN DDD III NNN GGG SSS    
  F I N D I N G S

Eighty-six percent of hospices were certified  For the period of our review, 
within 6 years, as required, while 14 percent  the CMS standard required 
hospice certification every   
averaged 3 years past due 
6 years. Eighty-six percent of 
hospices (2,172 of 2,537) had been certified within the 6 years ending 
July 5, 2005.  The remaining 14 percent of hospices (365) were past due 
for certification because the last certification for each had occurred more 
than 6 years before July 5, 2005.   
On average, hospices past due for certification had not been surveyed for  
9 years3 years longer than the CMS standard 
The extent to which the 365 hospices were past due for certification 
ranged from 34 days to more than 13 years, averaging 3 years past due. 
Eleven percent of these hospices were more than 6 years past due, with 
their last certification surveys having occurred more than 12 years 
before July 5, 2005 (see chart below).  Medicare payment data from 
1998 to 2004 show that all hospices with past-due certifications received 
Medicare payments for each of these years. In 2004 (the last full 
calendar year of payment data available), Medicare payments to each 
hospice with a past-due certification averaged $2.7 million. 
Hospices With Past-Due Certifications 
(N = 365) 
s 
e 70% 
c 59% 
pi 60% 
s
o 50% 
H
of  40%  30% 
e  30% 
g
a 20% 
nt 11% 
e 10% 
c
er 0% 
P
up to 3 Years  3-6 Years  >6 Years 
Number of Years Past Due 
Source:  Office of Inspector General (OIG) analysis of elapsed time between last survey and  

 July 5, 2005, CMS OSCAR data.

Two CMS regions accounted for 56 percent of hospices with past-due 
certifications:  Region V (33 percent) and Region IX (23 percent).  Only 
24 percent of all certified Medicare hospices are located in these two 
regions. Three States account for 41 percent of all hospices with  
past-due certifications: Michigan (12 percent) and Illinois (12 percent) 
in Region V, and California (17 percent) in Region IX.  
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  8  F I N D I N G
 S  
To verify our findings regarding past-due certifications, we contacted 
State agency staff in five States (California, Illinois, Michigan, 
Minnesota, and Maryland) that had the most hospices with past-due 
certifications or the most past due by 6 or more years.  Staff from these 
States reported that their workload priorities based on required State 
and Federal activities contributed to the delays we identified, as did 
resource constraints, such as insufficient or untrained staff to conduct 
surveys.27 
Of hospices with timely certifications in their last cycles, 33 percent had 
been certified late in their prior cycles 
Of the hospices that were certified within 6 years as of July 2005,  
70 percent (1,515 of 2,172) had earlier certifications also subject to the 
6-year standard. Thus, we were able to calculate for these 
1,515 hospices the elapsed time between their prior certification surveys 
and their last certification surveys. For 33 percent of these hospices, 
the elapsed time was more than the required 6 years.28 
Changing the certification frequency to every 8 years on average will likely 
improve the compliance rate, but some hospices may still be certified less 
often than every 8 years 
In the FY 2006 Mission & Priority Document of August 2005, CMS 
notified State agencies of revised hospice survey and certification 
requirements for FY 2006.  According to this document, CMS made 
changes to FY 2005 certification frequency for some providers due to 
reductions in the Presidents 2005 proposed budget.  To address this 
reduction, one change decreased the FY 2005 hospice certification 
frequency from every 6 years to every 8 years on average per State with 
a new Tier 4 expectation that additional surveys be conducted to bring 
the 8-year average up to a 6-year average.   
To determine the effect of the FY 2006 requirement, we applied an  
8-year certification frequency to our hospice data but did not calculate 
an overall average for certification frequency.  This reduced the 
proportion of past-due certifications from 14 percent under the FY 2005 
requirement to 9 percent under the FY 2006 requirement. However, 
because the FY 2006 standard is an average rather than a defined 
interval, it is possible that a State agency could certify some hospices 
less often than every 8 years and still meet the requirement. 
Certifying hospices no more often than every 6 years was a concern 
expressed by staffs from two professional associations knowledgeable 
about hospice issues, NHPCO and JCAHO.  During interviews, each 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  9  F I N D I N G S  
associations staff indicated that the priority and frequency of hospice 
certification should be consistent with the priority and timeframes 
required for other facilities providing care for seriously ill patients,  
i.e., hospitals, nursing facilities, and home health agencies. Some State 
agency and CMS regional office staff expressed similar concerns but 
attributed the change to the budget reductions and the lack of 
legislative or regulatory requirements.  However, State agency staffs 
indicated that they generally schedule work for all providers based on 
the higher priority levels of statutory and regulatory requirements 
reflected in the CMS budget letter instructions. 
From July 2002 to July 2005, 
Health deficiencies were cited for 46 percent 
State agencies conducted 1,815 
of hospices surveyed and for 26 percent of 
certification surveys for 1,394 
hospices investigated for complaints; many 
Medicare hospices.  Of these 
deficiencies related to patient care  hospices, 46 percent (642 of 
1,394) were cited for at least one 
health deficiency, and 15 percent (213 of 1,394) received repeat citations 
for the same deficiencies cited during previous surveys.29  Some hospices 
had multiple survey visits, presumably to follow up on prior deficiencies. 
In the same timeframe, State agencies conducted 981 complaint 
investigations for 577 hospices.  Of these hospices, State agencies cited 
health deficiencies for 26 percent (152 of 577).  Further, of the  
152 hospices with deficiencies, 49 percent (75 of 152) were also cited for 
the same deficiencies during certification surveys over the same period. 
Thirty-eight percent (222 of 577) of the hospices were the subjects of two 
or more complaint investigations conducted during the review period. 
The most frequently cited health deficiencies on certification surveys 
related to care planning and quality issues 
The 13 most frequently cited health deficiencies accounted for  
43 percent of deficiencies cited against the 642 hospices.30  Twelve of 
these 13 deficiencies related to care planning and quality issues. (See 
Table 1 on the next page.)   
Thirty percent of deficiencies were cited for problems with hospices care 
planning for their patients. These cited deficiencies show that a written 
care plan either was not completed for each patient or lacked important 
elements of acceptable care planning.  Another 11 percent of the health 
deficiencies cited indicated that efforts to ensure quality patient care 
were also insufficient.  Proper care planning and ensuring that needed 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  10  F I N D I N G S  
care is provided are important for establishing an acceptable level of 
quality for patient-specific care. 
Table 1: Most Frequent Health Deficiencies From Certification Surveys 
Percentage of 
Deficiencies  Hospices 
Deficiencies 
(cited if the element is missing or insufficient)  Cited* 
(N=3,534) 
Plan of Care 
L133  written plan of care established, maintained for each individual  6%  202 
L135  plan reviewed, updated at intervals specified in plan  5%  176 
L137  plan states scope, frequency of services needed  5%  172 
L136  plan includes assessment of needs, identification of services  4%  148 
L134  establishment of plan of care  3%  100 
L200  plan of care for bereavement services reflects family needs  3%  100 
L155  periodic review and update of each individuals plan of care  2%  82 
L211  written instructions for patient care are prepared by RN for aides  2%  74 
Ensuring Quality Patient Care 
L176  maintains clinical record for every individual receiving care/services  3%  116 
L210  RN visits home site at least every 2 weeks when aide services provided  3%  115 
L209  services available/adequate in frequency to meet needs of patients  3%  96 
L142  conduct self-assessment of quality, appropriateness of care provided  2%  81 
Administrative 
L-108  governing body assumes legal responsibility for hospices total 
2%  84 
  operation 
Total  43% 
*Number of hospices cited does not total 642 because hospices may be cited for more than one deficiency. 
Source:   OIG analysis of OSCAR database for 3-year period ending July 5, 2005. 
The most frequently cited deficiencies during complaint investigations  
also related to care planning and quality 
Complaint investigations substantiated 43 percent (423 of 981) of the 
complaints, meaning that those complaint allegations were found to be 
valid. This resulted in State agencies citing health deficencies for  
37 percent (360 of 981) of complaint investigations against 152 hospices.  
The 12 most frequently cited deficiencies resulting from complaint 
investigations accounted for 42 percent of the deficiencies cited.31  (See 
Table 2 on the next page.)  Eleven of these 12 deficiencies pertained to 
problems with patient care planning and quality, the same deficiencies 
cited during certification surveys. Twenty percent of the cited 
deficiencies show that a written plan was either not prepared for each 
patient or lacked important elements.  Another 19 percent of health 
deficiencies indicated a quality of care problem, almost always in 
connection with ensuring that patients received adequate and 
appropriate care.  Because OSCAR records did not indicate the nature 
of the actual complaints, we could not determine whether the cited 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  11  F I N D I N G S  
deficiencies were directly related to the complaints or were discovered 
during the complaint investigation. 
Table 2: Most Frequent Health Deficiencies From Complaint Surveys 
Percentage of 
Deficiency  Hospices 
Deficiencies 
(cited if the element is missing or insufficient)  Cited*
(N=1,347) 
Plan of Care 
L133  written plan of care established, maintained for each individual  7%  75 
L136  plan includes assessment of needs, identification of services  6%  64 
L135  plan reviewed, updated at intervals specified in plan  4%  53 
L137  plan states scope, frequency of services needed  3%  33 
Ensuring Quality Patient Care 
L194  services provided in accordance w/ recognized standards of practice   3%  43 
L176  maintains clinical record for every individual receiving care/services  3%  37 
L103 assures continuity of patient/family care in all settings  3%  37 
L192  services directed or staffed to assure needs   3%  35 
L116  make nursing and physician services, drugs available on 24-hour basis  3%  34 
L185  patients clinical records must contain complete documentation of all 
2%  31
  services/events, including evaluations, treatments, progress notes, etc. 
L209  home health aide and homemaker services must be available and  
  adequate in frequency to meet patients needs; aide must meet other   2%  25 
specified requirements 
Administrative 
L108  governing body assumes legal responsibility for hospices total 
3%  36
  operation 
Total  42% 
*Number of hospices cited does not total 152 because hospices may be cited for more than one deficiency. 
Source:  OIG analysis of OSCAR database for 3-year period ending July 5, 2005. 
According to CMS and State 
CMS and State agencies rarely use methods 
agency staffs, onsite surveys for 
other than certification surveys and complaint 
certification and complaint 
investigations to monitor hospice performance 
investigations are their primary 
and enforce standards  
methods for determining whether 
hospice providers meet Federal 
program standards.   
In addition to conducting certification and complaint investigation 
surveys, CMS and State agencies have other options for oversight of the 
Medicare hospice program.  CMS can monitor State agencies certification 
processes (and performance of some hospices) by conducting Federal 
comparative surveys and annual State performance reviews.   
Both CMS and State agencies can also analyze available, but limited, 
certification and complaint investigation data to review hospice 
performance.  CMSs only enforcement remedy for poor performance by 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  12  FF II NN DD II NN GG
 SS  
hospices is termination of these providers from the Medicare program; 
State agencies may have additional enforcement measures. 
CMS rarely includes hospices in Federal comparative surveys or annual 
State performance reviews 
CMS performs comparative surveys to review the accuracy of State 
agency surveys. The comparative survey is an onsite Federal resurvey 
of a provider, which could include a hospice, within 60 days of the State 
agency survey. From July 2002 to July 2005, CMS conducted 
comparative surveys for 13 of 2,537 hospices, about one-half percent of 
the certified hospices in our population. We verified these data on 
comparative surveys with all 10 CMS regional offices. Staff from 
6 of the 10 regional offices reported that they had conducted 
comparative surveys for some provider type in the same 3-year period; 
4 reported that they had not conducted any comparative surveys in that 
period. Staff from two of the six regional offices indicated that they had 
sometimes included at least one hospice, and staff from four 
acknowledged that they rarely or never included hospices. 
Staff in 5 of 10 CMS regional offices reported conducting performance 
reviews of State agencies and their survey operations from 2002 to 
2005. All five staffs indicated that they rarely focused these reviews on 
survey operations for hospices. Their stated reasons were that hospices 
account for lower Medicare expenditures than other provider types and 
that they serve fewer beneficiaries relative to other Medicare programs. 
They also noted that hospices lack statutory or regulatory requirements 
that, if present, would make hospices a higher priority for CMS and 
State agencies. 
CMS and State agencies infrequently analyze existing hospice performance 
data; both face several challenges in identifying at-risk hospices as required 
for FY 2006 
The CMS FY 2006 Mission & Priority Document requires a new 
certification survey for a 5-percent sample of at-risk hospices per State 
(Tier II). CMS requires State agencies to use their judgment to 
identify and target those hospices most at risk of quality problems.32 
CMS has not provided State agencies any direct guidance or specific 
criteria for identifying these hospices. 
Staff from 8 of the 10 CMS regional offices reported that they rarely 
analyze available OSCAR and ASPEN hospice data to identify potential 
problems for specific hospices or to identify trends among hospices or 
States. Staff from one regional office reported that for 3 years they had 
OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  13  F I N D I N G
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requested training from CMS headquarters regarding how to analyze 
the available hospice data but had received none.  Of the 41 State 
agencies responding to our survey, 19 reported that they do not define 
poorly performing hospices; 22 define poor performance but not based on 
analysis of available data. 
Two months after the release of the FY 2006 Mission & Priority 
Document in August 2005, we asked all State agency staffs how they 
would prioritize their hospice workloads.  Of the 42 responding State 
agencies, 34 answered that they would consider the date of the last 
survey, but none specifically reported that they would target those 
hospices for which the last survey was more than 6 years ago. Eighteen 
State agencies indicated that in FY 2006, they had targeted or would 
target hospices based on complaint investigations and on the 
seriousness of any cited deficiencies.  Scheduling of survey workloads for 
FY 2006 also included consideration of hospices with new complaints 
that warranted investigation (Tier II) and of certification surveys of 
hospices seeking to become new Medicare providers (Tier III).  
CMS and State agencies face several data limitations in identifying at-risk 
hospices. Unlike data for nursing facilities, hospice deficiency data do not 
include ratings for scope (how many patients are affected) and severity 
(extent to which patients safety or health is affected).  In addition, CMS 
and State agencies have no individual patient outcome and assessment 
data from hospice providers by which to monitor quality of care.  At 
present, hospices are not required to report individual patient assessment 
data similar to those reported to the Minimum Data Set for nursing 
facility residents or maintained on home health agencies and their 
patients in the Outcome and Assessment Information Set (OASIS).  CMSs 
proposed changes to the conditions of participation for hospices include 
capturing individual patient data.33  CMS states that hospices could 
voluntarily provide the data to an existing private system, e.g., NHPCO.  
In interviews, CMS staff indicated an interest in collecting such patient 
information but that it is not currently considering the establishment of 
such a data repository. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  14  F I N D I N G S  
From July 2002 to July 2005, CMS terminated one hospice from Medicare; 
few States exercised their own enforcement measures 
Currently, CMSs only enforcement remedy for noncompliant hospices is 
termination from Medicare based on recommendations by the State 
agencies. In the 3 years from July 2002 to July 2005, one hospice was 
terminated as a result of severe problems identified during an initial 
survey.  In that same period, 93 hospices voluntarily left the Medicare 
program71 of them because of mergers with other hospice providers 
and 22 for a variety of other reasons.   
Of the 42 State agencies responding to our survey, 32 reported having 
their own enforcement measures. These include such remedies as 
focused in-service training, civil monetary penalties, plans of correction, 
and loss of State licensure which would result in termination from the 
Medicare program.34  However, only 8 of these 32 State agencies had 
invoked any enforcement action against a hospice from July 2002 to 
July 2005. State agencies staffs attributed their limited focus on 
hospices, and thus their infrequent use of available enforcement 
measures, to relatively small Medicare expenditures and low beneficiary 
enrollment.  Like the CMS regional office staffs, they also noted that 
hospices lack the statutory or regulatory requirements to make them a 
higher priority.  
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  15  R E C O M M E N D A T I O N S  
  R E C O M M E N D A T I O N S  

CMS is responsible for the oversight of certified Medicare hospices and 
their terminally ill patients.  CMSs primary sources of information 
about hospice performance are the results of State agencies certification 
surveys, complaint investigations, and recommendations for 
termination when warranted.  Neither statute nor regulation specifies 
survey frequency for hospices, but from FY 2000 to FY 2005, CMS policy 
set the frequency at every 6 years. For FY 2006, because of budgetary 
constraints, CMS changed its policy on survey frequency to every  
8 years on average.  CMS policy has consistently assigned a higher 
priority to certification surveys of hospitals, nursing homes, and home 
health agencies than it has to certification surveys of hospices. 
Our analysis of OSCAR data through July 2005 found that State agency 
certifications for 86 percent of hospices met the CMS standard, while  
14 percent of hospices were past due by 3 years on average.  Changing 
the certification frequency to every 8 years on average will likely 
improve the compliance rate.  However, because this is an average, a 
State agency could certify some hospices less often than every 8 years 
and still meet the requirement.  Our analysis also showed that State 
agencies cited a substantial proportion of hospices for health-related 
deficiencies during certification surveys and complaint investigations.   
CMSs oversight activities rarely included hospices in its Federal 
comparative surveys or annual State performance reviews, nor did CMS 
staff report analyzing existing hospice performance data.  Also for  
FY 2006, CMS required State agencies to annually target a 5-percent 
sample of at-risk hospices for certification.  However, CMS has not 
provided State agencies guidance for identifying at-risk hospices, and 
specific performance data on hospices are limited.   
Based on our findings, we conclude that CMS needs to strengthen its 
oversight of the Medicare hospice program to better protect both the 
program and its beneficiaries.  Specifically, we recommend that CMS: 
Provide Guidance to State Agencies and CMS Regional Offices Regarding 
Analysis of Existing Data and Identification of At-Risk Hospices 
Analysis of existing data. CMS should provide written guidance and/or 
training that specifies key performance indicators or analysis 
techniques for hospice data.  CMS regional office and State agency staffs 
reported that they rarely analyze available OSCAR and ASPEN data for 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  16  R E C O M M E N D A T I O N S  
hospice performance.  Alternatively, CMS could develop a standard set 
of indicators for hospice performance, complete data analysis centrally, 
and ensure that the resulting reports are routinely provided to CMS 
regional offices and State agency staffs. 
Analysis of these existing certification, deficiency, and complaint 
investigation data would enable CMS and State agencies to identify 
potential problems at specific hospices or to identify trends among 
hospices or States.  For example, our analysis showed that 15 percent of 
hospices surveyed between July 2002 and July 2005 received a repeat 
citation for the same deficiency cited during previous surveys. It also 
identified hospices which were cited during both certification surveys 
and complaint investigations in the same 3-year period. 
Identification of at-risk hospices. CMS should provide written guidance 
and/or training on how State agencies should analyze available data to 
identify which hospices are at risk for quality problems.  For FY 2006, 
CMS has required a 5-percent targeted survey of at-risk hospices as a 
priority activity.  However, CMS has not provided State agencies any 
direct guidance or specific criteria for identifying these hospices so that  
State agencies can include them in their planned workloads.  
For better identification of at-risk hospices, CMS could also institute 
ratings of scope (how many patients are affected) and severity (extent to 
which patients safety or health is affected) for cited hospice deficiencies.  
These ratings are not currently available for hospices in the OSCAR 
database.  CMS and State agencies also have no individual patient 
outcome and assessment data from hospice providers with which to 
monitor quality of care. Our analysis of OSCAR data identified that 
health deficiencies cited for hospices frequently pertained to patient 
care planning and quality.  To add this more-specific information, CMS 
could modify existing survey and certification databases to include 
hospice scope and severity ratings similar to those used for nursing 
facility deficiency data. Linking scope and severity ratings to the 
specific health deficiencies cited for a hospice would better inform a 
decision to terminate a hospice from the Medicare program. 
Include Hospices in Federal Comparative Surveys and Annual State 
Performance Reviews 
CMSs Federal comparative surveys and annual State performance 
reviews rarely include hospices.  These surveys and reviews allow CMS 
to ensure that States agencies meet CMSs performance requirements 
and to understand overall State agency operations.  These surveys also 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  17  R E C O M M E N D A T I O N S  
provide CMS the opportunity to review the State survey processes used 
by the surveyors and to identify inconsistent methods that may require 
additional training or clarification, such as appropriately identifying, 
citing, and reporting deficiencies. 
Seek Regulatory or Statutory Changes To Establish Specific Requirements 
for the Frequency of Hospice Certification 
At present, neither law nor regulation specifies the frequency of 
Medicare certification surveys conducted by State agencies for hospices. 
However, Section 1861(dd)(2)(G) of the Social Security Act, which 
applies specifically to hospices, allows the Secretary to promulgate other 
regulatory requirements.  These other requirements could include 
frequency of hospice certifications.  In lieu of a regulatory change, CMS 
could pursue a statutory change.   
CMS should seek a regulatory or statutory change, with commensurate 
funding, that would specify a fixed certification frequency for Medicare 
hospices. Such a change would enable CMS to maintain its certification 
schedules for hospices despite general budget cuts.  CMS has noted in 
its FY 2006 Mission & Priority Document that budgetary constraints 
caused it to change its policy on survey frequency from every 6 years to 
every 8 years on average.  However, a regulatory or statutory change 
would allow the Secretary to designate a portion of the overall 
departmental budget for hospice survey and certification.   
As part of the change, CMS should also seek to increase the frequency of 
hospice certifications.  Surveys every 3 years is the industry standard 
for hospices, as practiced by the accrediting organizations, JCAHO and 
CHAP. Nursing facilities and home health agencies, which also care for 
seriously ill patients, are certified at least every 15 months and every  
3 years, respectively.  For CMS, surveys of hospices are the primary 
method for gaining information about hospice performance in caring for 
patients.  Staff from two professional associations knowledgeable in 
hospice issues supported more frequent hospice certifications.   
Seek Legislation To Establish Additional Enforcement Remedies for Poor 
Hospice Performance 
Currently, CMSs only enforcement remedy against poorly performing 
hospices is termination from the Medicare program.  Our review found 
that termination is rarely imposed. The cited deficiencies that we 
reviewed, when taken together, identify potentially serious problems in 
care planning and quality.  In some cases, termination may be the 
appropriate remedy.  However, less severe remedies could be effective 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  18  R E O M M E N D A T I O N S  
for addressing performance problems that do not merit termination.  A 
potential array of enforcement measures could include directed plans of 
correction, directed in-service training, denials of payment for new 
admissions or all patients, civil monetary penalties, and imposition of 
temporary management.   
AGENCY COMMENTS  
In its comments on the draft report, CMS stated that its management 
challenge is to make the most effective use of whatever resources are 
appropriated.  To this end, CMS reports diligently exploring and 
implementing methods to become more efficient in targeting those 
resources toward providers most in need of closer oversight. For 
hospices, examples include targeted surveys of at least 5 percent of 
sample hospices identified by the State as being most at risk, inclusion 
of hospices in State Performance Standards, the addition of contract 
surveyors to assist CMS in performing oversight surveys, the 
development of hospice reports to assist States in targeting at-risk 
hospices, and plans to publish new Conditions of Participation for 
hospices in 2008 that set expectations for hospice accountability.    
CMS concurred with our first recommendation to provide greater 
guidance concerning analysis of existing data and identification of  
at-risk hospices. Its planned guidance involves alerting States and 
CMSs regional offices to the availability and usefulness of a number of 
reports that can help to identify the at-risk hospices.  However, CMS 
has indicated that given the very limited number of administrative 
enforcement actions available to it, adding scope and severity indicators 
for cited hospice deficiencies would add little to no value. 
CMS concurred partially with our second recommendation.  While 
agreeing to include hospices in annual State performance reviews, 
which it began in FY 2006, CMS did not concur with greater inclusion of 
hospices in Federal comparative surveys, citing budget limitations.  
CMS did not concur with our third recommendation to make a 
regulatory change to establish frequency requirements for hospice 
certification. CMS considers this a statutory issue necessitating 
congressional action to address fundamental resource issues. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  19  R E C O M M E N D A T I O N S  
Finally, CMS neither concurred nor nonconcurred with our fourth 
recommendation to pursue new enforcement remedies for poor hospice 
performance. CMS is continuing to consider the recommendation. 
For the full text of CMSs comments, see Appendix D. 
OFFICE OF INSPECTOR GENERAL RESPONSE 
We recognize that since this evaluation concluded, CMS has taken a 
number of steps to improve its oversight of hospices by developing new 
tools and enhancing available processes.  However, we continue to 
recommend several additional actions.   
Responding to our first recommendation, CMS states that given the 
very limited number of administrative enforcement actions available to 
it, scope and severity indicators would add little to no value to the 
hospice reports available through its data systems.  However, without a 
scope and severity component associated with deficiencies or 
complaints, there appear to be few ways to identify the pervasiveness 
and seriousness of cited problems within hospices. Scope and severity 
ratings are currently utilized for both nursing homes and home health 
agencies. Further, given that termination is the only available 
enforcement remedy, scope and severity ratings would provide 
additional assessment information to more effectively determine 
whether to terminate a hospice from the Medicare program or to 
identify it as an at-risk hospice. 
We continue to recommend that CMS include hospices in the Federal 
comparative surveys. These surveys provide CMS with the opportunity 
to ensure State performance, understand overall State agency 
operations, and review and ensure consistency of State survey 
processes.  
We continue to recommend that CMS set a frequency requirement for 
hospice certification.  We acknowledge that this frequency requirement 
can be set by a statutory change.  CMS has the authority to set a 
frequency for hospice certification surveys through regulation; however, 
we acknowledge that a statutory change could also address this issue.  
Consequently, we changed the third recommendation in the draft report 
to add the option of seeking statutory change to establish a specific 
frequency requirement. Either vehicle could be used to address this 
recommendation.  
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  20  R E C O M M E N D A T I O N S  
With respect to our final recommendation, we look forward to CMSs 
comments to this final report addressing its consideration of 
establishing additional enforcement remedies for poor hospice 
performers. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  21  FR IE NC DO IMN MG ES N  D A T I O N S  
  E N D N O T E S  

1	 Public Law 97-248  122, 96 Stat. 324, 356 established the 
Medicare hospice benefit for eligible Medicare Part A beneficiaries. 
2	 Section 1861(u) of the Social Security Act (the Act) created hospices 
as a provider category, and Section 1861(dd)(1) defines the scope of 
benefits for hospice care and the hospice program.  
3	 42 CFR  418 sets forth the Conditions of Participation.  
Specifically, 42 CFR  418.50(b)(2) states that hospices must 
provide care that is reasonable and necessary for the palliation 
and management of terminal illness and related care. . . . 
4	 Medicare Hospice Benefits pamphlet, CMS, July 2005.   
5	 Section 1861(dd)(1) of the Act. 
6	
Medicare Program Expenditures Associated With Hospice Use, 
LRP-200402-07, RAND Corporation, 2004.  
7	 RAND Corporation, February 2004, and National Hospice and 
Palliative Care Organization.  Available online at 
http://rand.org/research_areas/health/ and 
http://www.nhpco.org/templates/1/homepage.cfm. Accessed 
September 2005 and March 2006, respectively. 
8	 CMSs Health Care Information System (HCIS), 19982004.  
Available online at http://www.cms.hhs.gov/FilesForOrderGenInfo/. 
Accessed August 2, 2005. 
9	 Overall enrollment increased from 40,025,724 beneficiaries in 2001 
to 41,728,804 beneficiaries in 2004.  Medicare Enrollment:  
National Trends 1966 to 2005.  Available online at 
http://www.cms.hhs.gov/MedicareEnRpts/Downloads/HISMI05.pdf. 
Accessed July 2005. 
10	 As of July 5, 2005, according to OSCAR data, there were actually 
2,757 hospices receiving Medicare reimbursement; 17 hospices were 
not active Medicare providers. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  22  11	 Data Book:  Healthcare Spending and the Medicare Program, 
Chapter 6, MedPac, June 2004.   
12	 2005 CMS Statistics.  Available online at 
http://www.cms.hhs.gov/home/rsds.asp. Accessed July 2006. 
13	 2005 CMS Statistics, CMS Pub. No. 03455, Table 30, September 
2005. 
14	 42 CFR  418 sets forth the Conditions of Participation.     
42 CFR  488.100 requires an additional condition applicable only 
to hospices that provide short-term inpatient care and respite care 
directly, rather than under arrangements with other participating 
providers. 
15	 Medicare and Medicaid Programs:  Hospice Conditions of 
Participation, Federal Register, Vol. 70, No. 102, May 27, 2005, 
Proposed Rule, pp. 3084030893. 
16	 Telephone interview with Senior Nurse Consultant, Office of 
Clinical Standards and Quality, CMS, on October 26, 2006. 
17	 Section 1864(a) of the Act establishes the relationship between CMS 
and State agencies relating to Medicare certification processes. 
18	 CMS OSCAR data extracted July 5, 2005. 
19  Sections 1819(g)(2)(A)(iii) and 1919(g)(2)(A)(iii) of the Act and       
42 CFR  488.308 require that each skilled nursing facility and 
nursing facility receive a certification survey no later than         
15 months after the last day of the previous certification survey. 
Further, the statewide average interval between certification 
surveys of skilled nursing facilities and nursing facilities cannot 
exceed 12 months. 
20	 Section 1891(c)(2)(A) of the Act states that certification surveys will 
occur no later than every 36 months with more frequent surveys 
within this interval permitted. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  23  21	 FY 2005 State Survey and Certification Budget Call Letter, CMS 
memorandum to Directors, State Survey and Certification,       
June 10, 2004. 
22	 Quality Assurance for the Medicare & Medicaid Program, FY 2006 
Mission & Priority Document, Survey and Certification, CMS, 
August 5, 2005.   
23	 Quality Assurance for the Medicare & Medicaid Program, FY 2006 
Mission & Priority Document, Survey and Certification (Managing 
Resource Limitations),  p. 9. 
24	 42 CFR  488 (Survey, Certification, and Enforcement Procedures) 
and 42 CFR  489 (Provider Agreements and Supplier Approval). 
25	 CMS plans to replace OSCAR with the Certification and Survey 
Provider Enforcement Reporting (CASPER) system.  CASPER will 
be an end-product database for reporting collected QIES 
information.  No date is available for this change. 
26	 For these 17 hospices, the CMS HCIS database showed no Medicare 
hospice payments in 2004, the last full calendar year of payment 
data available at the time of our study. 
27	 CMS requires that surveyors attend its course, Basic Hospice, 
before conducting certification surveys for hospices.  According to a 
few State agencies staffs at the time of our surveys in Summer 
2005, CMS last offered this course more than 3 years ago.  
However, CMS staff said the agency offered the training in August 
2005 and January 2006.   
28	 For 25 hospices, their last surveys occurred in 1999 when the 
certification frequency was every 10 years.  When we allowed       
10 years in elapsed time between the prior survey and the last 
survey for these 25 hospices, none of the last certifications were 
completed late.  These 25 hospices are not included in the 
33-percent statistic. 
29	 We excluded 1 percent of the OSCAR records from the deficiency 
frequency analysis because these records indicated that a health 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  24  deficiency was cited; however, the specific deficiency tag was not 
reported. 
30	 The table reflects the most frequently cited deficiencies from 
certification surveys that represented 2 percent or more (before 
rounding) of all deficiencies cited in the 3-year period ending      
July 5, 2005. 
31	 The table reflects the most frequently cited deficiencies from 
complaint investigations that represented 2 percent or more (before 
rounding) of all deficiencies cited in the 3-year period ending      
July 5, 2005.  Another 10 deficiencies, not identified in the table, 
represented less than 2 percent before rounding (1.63 percent to 
1.93 percent) and accounted for an additional 18 percent of cited 
complaint deficiencies.  Nine of these ten deficiencies were for 
patient care planning or quality. 
32	 Quality Assurance for the Medicare & Medicaid Program, FY 2006 
Mission & Priority Document, Survey and Certification, CMS, 
August 5, 2005.   
33	 Medicare and Medicaid Programs:  Hospice Conditions of 
Participation, Federal Register, Vol. 70, No. 102, Proposed Rule,  
pp. 3084030893, May 27, 2005. 
34	 Interviews with CMS regional office staff concerning CMS oversight 
identified possible State enforcement actions beyond CMS 
terminations.   
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  25    A P P E N D I X   ~   A  
Inspection Methodology 
Data Sources 
Report findings apply to hospices for which certification resulted from 
State agency surveys.  Survey and certification data found within the 
Centers for Medicare & Medicaid Services (CMS) Online Survey 
Certification and Reporting (OSCAR) and Medicare payment data from 
the Healthcare Information System (HCIS) database were primary data 
sources for analysis.  Additional sources were consulted to identify 
deemed hospices as well as to better understand the oversight 
environment from State, national, and provider perspectives. 
Specific information from OSCAR used in this evaluation and available 
as of July 5, 2005, includes: 
	 hospice provider data;  
	 survey and certification data, including deficiencies cited for the  
3-year period July 5, 2002, through July 5, 2005;  
	 complaint survey data, including deficiencies cited, for the 3-year 
period July 5, 2002, through July 5, 2005; and  
	 Federal monitoring survey data for the 3-year period July 5, 2002, 
through July 5, 2005. 
We also utilized the following information: 
	 hospice payment data from CMSs HCIS for years 1998 through 
2004; 
	 inquiry results from several State agencies in States with extreme 
cases of certified hospices past due for certification;  
	 reports submitted by accreditation organizations to CMS for 
quarters 1 and 2 of 2005;  
	 accreditation activity data for hospices deemed as meeting 
Medicare requirements obtained directly from the Joint 
Commission for the Accreditation of Healthcare Organizations 
(JCAHO);  
	 structured discussions regarding CMSs management of hospices 
with key personnel from CMS central and regional offices, 
JCAHO, the Community Health Accreditation Program (CHAP), 
the National Hospice and Palliative Care Organization (NHPCO), 
and the National Association for Home Care and Hospice (NAHC);  
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  26  A P P E N D I X ~ A  
	 results of a national survey of State agencies about hospice 
oversight and enforcement; and 
	 recent survey and certification budget letters and workload 
guidance sent by CMS to State agencies. 
Evaluation Population 
As of July 5, 2005, the OSCAR system showed that 2,774 hospices 
certified for Medicare by State agencies were active providers.  Proper 
identification of hospices deemed as meeting their certification 
requirements through an accreditation survey was necessary to exclude 
them from analysis for this report. However, the number of deemed 
hospices in OSCAR was significantly lower than the numer reported to 
us by CMS and the accreditation organizations.  As a result, we also 
relied on hospice data supplied by accreditation organizations to CMS 
and to the Office of Inspector General directly.  
CMS requires accreditation organizations to report activities related to 
deemed hospices on a quarterly basis.  Although this is done 
electronically, the OSCAR system is not typically updated with this 
information. We requested copies of quarterly reports from CMS and 
requested data directly from both accreditation organizations.  
Quarterly reports were available only for recent quarters and only 
JCAHO fulfilled our request.  However, this information proved 
valuable for identifying all hospices deemed by JCAHO rather than 
simply those deemed within the last 3 months. Quarterly reports 
submitted by CHAP were more historical, containing all deemed 
hospices in addition to those recently accredited and deemed.  Based 
upon our review, we identified 220 deemed hospices that were active at 
the time of the evaluation.  Preliminary analysis of survey frequency 
was conducted on the remaining 2,554 hospices certified by State 
surveys. 
Measures of Certification Frequency 
To determine certification frequencies, we measured the elapsed time 
between the last survey date identified in OSCAR and July 5, 2005, for 
all active hospices certified by State surveys.  We verified with CMS 
that, for each year from fiscal year (FY) 2000 to FY 2005, it had 
instructed State agencies to certify Medicare hospices every 6 years. 
For FYs 1998 and 1999, the frequency of certification was set at every 
10 years. 
Hospices whose last certification surveys were less than 6 years old as 
of July 5, 2005, were considered to be current.  Among hospices 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  27  A P P E N D I X ~ A  
considered current on certification, not enough time had elapsed for a 
certification survey to become due. Hospices whose last surveys were 
more than 6 years before July 5, 2005, were initially considered to have 
past-due certifications. However, we allowed a grace period of  
31 additional days, and only certifications that remained past due after 
that adjustment were determined as past due for analysis purposes.  
Thus, for hospices reported as having past-due certifications, more than 
6 years and 1 month had elapsed between their last survey and July 5, 
2005. 
For hospices having both current certifications and prior certification 
survey dates, we measured the elapsed time between the prior surveys 
and the last surveys. Here, too, we allowed a grace period of 31 days.  
When the elapsed time between prior and last surveys exceeded 6 years 
and 1 month, hospices were classified as having late certification 
surveys.  We made one exception to this measurement.  For 25 hospices, 
their most recent surveys occurred in 1999, when the certification 
standard was every 10 years.  Therefore, when we allowed 10 years in 
elapsed time between the prior surveys and the last surveys for these  
25 hospices, we found that none of them was late for its last 
certification. Approximately one-third of hospices having current 
certification surveys did not have prior survey dates.  They were 
relatively new providers and their last surveys were conducted for 
initial certification. 
Inactive Hospices 
Initial results, which showed that some hospices were past due on their 
certifications by up to 13 years, suggested that these hospices might not 
be active Medicare providers.  We matched hospices shown as active 
providers in OSCAR with HCIS payment data from 1998 through 2004 
to verify that they had received Medicare payments.  This data match 
showed that 17 hospices had no Medicare payments for 2004 or prior 
years.  Searches of the NHPCO and NAHC hospice provider databases 
failed to find 8 of the 17 hospices in either database.  The remaining 
nine hospices were in the NHPCO or NAHC databases, but not both. 
Ultimately, we learned that of the remaining nine hospices, three had 
invalid phone numbers, five had discontinued hospice services, and  
one had merged with another hospice. 
We concluded that all 17 hospices were inactive providers and should 
have been removed from the OSCAR system.  We excluded them from 
our evaluation population, leaving a total of 2,537 State-surveyed 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  28  A P P E N D I X ~ A  
hospices for analysis.  This served as the final population used for 
analysis of survey frequencies, survey deficiencies, complaint surveys, 
complaint survey deficiencies, Federal monitoring surveys, and 
enforcement actions. 
Hospices Selected for Followup 
Of the States with the greatest number of past-due certification surveys 
and/or the most time elapsed since surveys were due, we selected a few 
for additional followup. We identified the top five States in terms of two 
aspects of late certification surveys: (1) those with the greatest number 
of late certification surveys and (2) those with the greatest number of 
late certification surveys more than 6 years past the date for which the 
certification surveys should have occurred.  Three States (California, 
Illinois, and Michigan) met both qualifications.  We then selected the 
next State remaining on each list (Minnesota and Maryland).  We asked 
these five State agencies to provide explanations as to why so much 
time had elapsed since the last surveys were conducted for the five 
hospices most past due. 
Interviews 
In addition to analyzing survey frequency and results, we conducted 
structured interviews with key personnel of CMS headquarters; 10 CMS 
regional offices; and the accreditation organizations with deeming 
authority for hospices, CHAP and JCAHO.  These discussions provided 
context for understanding current issues affecting management 
activities, the extent to which survey data are used to monitor hospice 
performance, vulnerabilities in oversight activities, and available 
enforcement actions.  We spoke with staff of NHPCO and NAHC about 
CMS management activities from the hospice provider perspective. 
State Agency Survey 
We conducted an e-mail survey of State agencies about oversight and 
enforcement activities related to hospices within their States.  Of the  
51 agencies surveyed (including Puerto Rico), 42 responded to our 
questionnaire. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  29  CMS Program Guidance 
As stated previously, most criteria for hospice certification and review 
are found in programmatic guides, rather than statute or regulation.  
The 6-year hospice certification standard used in this evaluation was 
outlined in the FY 2005 State Survey and Certification Budget Call 
Letter.  We found that the same standard had been applied annually 
since FY 2000.  Budget call letters are sent annually by CMS to State 
agencies.  They direct how survey and certification workloads for all 
provider types should be prioritized for the year.  Provider types are 
prioritized using a four-tier system.  Tier I is given top priority, followed 
by Tiers II through IV. For FY 2005, State agencies were expected to 
prioritize their work using that system.  Hospices were placed in 
Tier III, except for complaint investigations.  Complaint investigations 
were classified as Tier II activities, regardless of the provider type being 
investigated. 
During this evaluation, CMS released new guidelines for the next fiscal 
year.  On August 5, 2005, CMS issued the Quality Assurance for the 
Medicare & Medicaid Program, Fiscal Year 2006 Mission & Priority 
Document, Survey and Certification.  Though renamed, it serves the 
same purpose as previous budget call letters.  The FY 2006 Mission & 
Priority Document relaxed frequency guidelines for certifications of 
hospices and other non-long-term-care providers.  Non-long-term-care 
provider certifications are still a Tier III activity, but the requirement 
that they occur at least every 6 years was replaced with a target of an  
8-year average.  Under Tier IV, States are encouraged to conduct 
additional surveys and bring the average down to 6 years, if resources 
permit. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  30    A P P E N D I X   ~   B  
Fiscal Year 2005 Selected Centers for Medicare & Medicaid Services 
Priority Survey Activities for Selected Providers 
PROVIDER OR 
Tier I  Tier II  Tier III  Tier IV 
ACTIVITY 
Specific administrative and systems activities are identified under each tier.  Activities in each tier must be 
Core  completed before activities of the subsequent tiers are begun.  Examples of activities within each tier 
Infrastructure  include timely entry of survey workload data, maintenance of all systems and hotlines, performance 
measurement activities, training, etc. 
Complaint 
Complaint investigations of all provider types 
Investigations 
Initial certification 
New Provider 
surveys of all 
Initial Surveys 
provider types 
 Nursing Home Oversight and Improvement 
Program expectations delineated by the 
Centers for Medicare & Medicaid Services 
(CMS) and through various memorandums 
requiring States to intensify their review of 
facilities abilities to prevent bedsores, 
Certification  dehydration, malnutrition  
surveys, 
Nursing 
frequency   Fund additional costs associated with 
Facility 
requirements per  immediate sanctions 
nursing home 
 Fund additional costs associated with special 
focus initiatives and conducting surveys on 
repeat offenders with serious violations  
 Fund costs associated with staggering timing 
of nursing home inspections 
5% validation 
Recertification 
Home Health  surveys of deemed 
surveys within 3 
Agency  home health 
years 
agencies 
1% sampled 
validation 
Hospital 
surveys 
Accredited 
identified by 
CMS 
 33% recertification covers all levels of 
facilities  
Hospital 
 5% prospective payment system-excluded 
Nonaccredited 
hospitals, rehabilitation units, and psychiatric 
units no later than 
90 days after cost reporting period 
 Recertification 
surveys every 6 
years 
Hospice* 
 5% validation 
surveys of deemed 
hospices 
*The identified survey priority activities for hospices are the same as those for ambulatory surgical centers, outpatient physical therapy 
providers, comprehensive outpatient rehabilitation facilities, portable x-ray providers, and rural health clinics. Only the required hospice 
validation survey is not required of these. 
Source:  CMSs fiscal year 2005 State Survey and Certification Budget Call Letter to State agency directors and regional CMS administrators.  Shaded areas 
indicate no suggested priority activity for that tier. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  31    A P P E N D I X   ~   C  
Fiscal Year 2006 Changes to Selected Centers for Medicare & Medicaid Services 
Priority Survey Activities for Selected Providers 
PROVIDER OR 
Tier I  Tier II  Tier III  Tier IV 
ACTIVITY 
Core  Changed from listing under tiers in FY 2005 to a standard core requirement, 
Infrastructure  all of which must be completed 
Complaint 
Unchanged from FY 2005 
Investigations 
New Provider 
Initial certification surveys of all provider types 
Initial Surveys 
Nursing Facility  Unchanged from FY 2005 
 36-month 
 5% additional targeted 
maximum interval  24-month average for 
sample survey identified by 
for certification  additional surveys based 
the Centers for Medicare & 
surveys   on State judgment for 
Medicaid Services (CMS) as 
agencies most at risk for 
most at risk of poor care; 
Home Health   Extended surveys  poor care to ensure that 
may count toward 
Agency  required when  all agencies are surveyed 
36-month interval 
complaint  on average every 24 
investigations  months (to ensure 50% 
 5% validation surveys of 
identify  agencies surveyed each 
deemed home health 
substantiated  year on average) 
agencies identified by CMS 
noncompliance 
 1% sampled 
validation surveys 
of accredited 
hospitals identified 
by CMS 
 1% targeted 
additional stratified 
5% validation surveys of 
Hospital  random sample 
deemed Critical Access 
Accredited  surveys 
Hospitals identified by CMS 
 Full certification 
surveys for each 
complaint 
investigation 
resulting in 
substantiated 
noncompliance 
 3-year average based 
on additional 
 4.5-year average for 
recertification surveys 
additional 
based on State 
  6-year maximum interval  recertification surveys 
determination of most at 
between certification  based on State 
risk of poor care 
surveys  determination of most 
at risk of quality 
Hospital   Recertification surveys 
 5% targeted sample  problems (at least 
Nonaccredited of all new critical access 
survey identified by Centers  22% per year) 
hospitals within  
for Medicare & Medicaid 
12 months of initial 
Services (CMS) as most at   Inpatient 
survey 
risk of providing poor care  prospective payment 
system surveys (new 
(both to ensure 33% of 
and 5% existing) 
hospitals are surveyed 
annually) 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  32  A P P E N D I X ~ C  
Fiscal Year 2006 Changes to Selected Centers for Medicare & Medicaid Services 
Priority Survey Activities for Selected Providers 
PROVIDER OR 
Tier I  Tier II  Tier III  Tier IV 
ACTIVITY 
 8-year average for 
additional 
recertification surveys 
5% targeted sample 
based on State  6-year average for 
surveys based on State 
determination of most  additional recertification 
judgment of most at risk of 
at risk quality  surveys (to ensure that 
Hospice*  quality problems that may 
problems  all hospices in State are 
count toward the State 
surveyed no less than 
average 8-year survey 
 5% validation  every 6 years) 
interval in Tier III 
surveys of deemed 
hospices identified by 
CMS 
*The identified survey priority activities for hospices are the same as those for ambulatory surgical centers, outpatient physical therapy 
providers, comprehensive outpatient rehabilitation facilities, portable x-ray providers, and rural health clinics. Only the required hospice 
validation survey is not required of these. 
Source:  CMSs FY 2006 Survey Frequency & Priority chart in the FY 2006 Mission & Priority Document for Survey and Certification. Other provider types 
omitted for purposes of this report include psychiatric hospitals, end stage renal disease facilities, ambulatory surgical centers, outpatient physical therapy 
providers, comprehensive outpatient rehabilitation facilities, portable x-ray providers, and rural health clinics.  Shaded areas indicate no suggested priority 
activity for that tier. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  33  A P P E N D I X   ~   D  
Agency Comments 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  34
   OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  35    OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  36    OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  37    OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  38    A C K N O W L E D G M E N T S  

This report was prepared under the direction of Kevin K. Golladay, 
Regional Inspector General for Evaluation and Inspections in the Dallas 
regional office. 
Leah K. Bostick served as the team leader for this study.  Scott 
Whitaker from the Office of Evaluation and Inspections Dallas regional 
office contributed to this report.  Central office staff who contributed to 
this report include Tricia Davis, Sandy Khoury, and Barbara Tedesco. 
  OEI-06-05-00260  MEDICARE HOSPICES:  CERTIFICATION AND CMS OVERSIGHT  39