U.S. Department of Health and Human Services 
Office of Inspector General 
 
 
Vulnerabilities in the 
Medicare Hospice Program 
Affect Quality Care and 
Program Integrity: 
An OIG Portfolio 
 
 
OEI-02-16-00570  Joanne M. Chiedi 
July 2018  Principal Deputy  
oig.hhs.gov  Inspector General 
  Port folio in Brief  U.S. Department of Health and Human Services 
July 2018 
Office  of Inspector General 
OEI-02-16-00570 
 
 
 
Vulnerabilities in the Medicare Hospice 
Why OIG Did This Portfolio 
Program Affect Quality Care and Program 
OIG is committed to ensuring that 
Integrity   beneficiaries receive quality care and to 
safeguarding the hospice benefit.  OIG has 
What OIG Found  produced numerous evaluations and audits 
of the hospice program, including in-depth 
Hospice care can provide great comfort to beneficiaries, families, and 
looks at specific levels of care and settings.  
caregivers at the end of a beneficiarys life.  Use of hospice care has grown 
OIG has also conducted criminal and civil 
steadily over the past decade, with Medicare paying $16.7 billion for this care in 
investigations of hospice providers, leading 
2016.  It is 
Hospice payments continue togrow. $16.7 to the conviction of individuals, monetary 
an  $15.9
increasingly  ns $15.1 $15.1 $15.1 penalties, and civil False Claims Act 
o $13.8
important  Billi $12.1 $13.0 settlements.  Through this extensive work, 
benefit for  n  $11.2 OIG has identified vulnerabilities in the 
the  ng i $9.2 $10.3 program.  This portfolio highlights key 
Medicare  ndi vulnerabilities and presents 
e
p recommendations for protecting 
population;  S
e  beneficiaries and improving the program. 
1.4 million  r
a
c
beneficiaries  di  
e
received  M What Medicare Hospice Means 
hospice care 
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016   Beneficiaries forgo curative care for the 
in 2016.   
terminal illness and instead receive 
However, OIG has identified vulnerabilities in the program.  OIG found that  palliative care. 
hospices do not always provide needed services to beneficiaries and    Care may be provided in a variety of 
sometimes provide poor quality care.  In some cases, hospices were not able to  settings, including the home, nursing 
manage effectively symptoms or medications, leaving beneficiaries in  facility, hospital, and hospice inpatient 
unnecessary pain for many days.    unit.  
  There are four levels of care, the most 
OIG also found that beneficiaries and their families and caregivers do not 
common of which is routine home 
receive crucial information to make informed decisions about their care.  
care.  
Further, hospices inappropriate billing costs Medicare hundreds of millions of 
  Within each level of care, Medicare 
dollars.  This includes billing for an expensive level of care when the beneficiary 
pays hospices for each day a 
does not need it.  Also, a number of fraud schemes in hospice care negatively 
beneficiary is in care regardless of the 
affect beneficiaries and the program.  Some fraud schemes involve enrolling 
quantity or quality of services.  
beneficiaries who are not eligible for hospice care, while other schemes involve 
billing for services never provided.   
Lastly, the current payment system creates incentives for hospices to minimize 
their services and seek beneficiaries who have uncomplicated needs.  Within each level of care, a hospice is paid for every 
day a beneficiary is in its care, regardless of the quantity or quality of services provided on that day.  While CMS has 
made some changes to payments, the underlying structure of the payment system remains unchanged. 
   
   
 
What OIG Recommends and How the Agency Responded 
More must be done to protect 
We recommend that the Centers for Medicare & Medicaid Services (CMS) 
Medicare beneficiaries and the 
implement 15 specific actions that relate to 7 areas for improvement.  CMS 
integrity of the program. 
should strengthen the survey processits primary tool to promote 
complianceto better ensure that hospices provide beneficiaries with 
needed services and quality care.  CMS should also seek statutory 
authority to establish additional remedies for hospices with poor performance.  Also, CMS should develop and 
disseminate additional information on hospices, including complaint investigations, to help beneficiaries and their families 
and caregivers make informed choices about hospice care.  CMS should educate beneficiaries and their families and 
caregivers about the hospice benefit, working with its partners to make available consumer-friendly information.  CMS 
should promote physician involvement and accountability to ensure that beneficiaries get appropriate care. 
To reduce inappropriate billing, CMS should strengthen oversight of hospices.  This includes analyzing claims data to 
identify hospices that engage in practices that raise concerns.  Lastly, CMS should take steps to tie payment to beneficiary 
care needs and quality of care to ensure that services rendered adequately serve beneficiaries needs, seeking statutory 
authority if necessary.   
In our draft report to CMS, we recommended 16 specific actions.  CMS concurred with six recommendations, did not 
concur with nine, and neither concurred nor nonconcurred with one.  We considered CMSs comments carefully, and we 
clarified and combined two of our recommendations.  See Appendix A for a list of OIGs 15 recommendations.  We 
remain committed to our recommendations and will continue to work with CMS to promote their implementation.  
   
TABLE OF CONTENTS 
BACKGROUND  1 
   
FINDINGS   
Hospice use has grown steadily over the past decade  3 
Hospices do not always provide adequate services to beneficiaries and sometimes provide  4 
poor quality care  
Beneficiaries and their families and caregivers do not receive crucial information to make  7 
informed decisions about hospice care 
Inappropriate billing by hospices costs Medicare hundreds of millions of dollars     10 
The current payment system creates incentives for hospices to minimize their services and  13 
seek beneficiaries who have uncomplicated needs   
   
CONCLUSION AND RECOMMENDATIONS   
Strengthen the survey process to better ensure that hospices provide beneficiaries with  18 
needed services and quality care 
Seek statutory authority to establish additional remedies for hospices with poor performance  19 
Develop and disseminate additional information on hospices to help beneficiaries and their  19 
families and caregivers make informed choices about their care 
Educate beneficiaries and their families and caregivers about the hospice benefit  19 
Promote physician involvement and accountability to ensure that beneficiaries get  20 
appropriate care 
Strengthen oversight of hospices to reduce inappropriate billing  20 
Take steps to tie payment to beneficiary care needs and quality of care to ensure that services  22 
rendered adequately serve beneficiaries needs, seeking statutory authority if necessary 
Address additional recommendations contained in prior OIG reports   23 
   
AGENCY COMMENTS AND OIG RESPONSE   24 
APPENDICES   
A: Key Recommendations to Improve the Medicare Hospice Program  27 
B: List of Related OIG Reports  28 
C: List of Additional Recommendations from Prior Reports  29 
D: Agency Comments  30 
   
ACKNOWLEDGMENTS  36 
   
BACKGROUND 
The Office of Inspector General (OIG) Portfolio presents recommendations to improve program 
vulnerabilities detected in prior audits, evaluations, and investigations.  The Portfolio synthesizes OIGs 
body of work in a program area and identifies trends in payment, compliance, oversight, or fraud 
vulnerabilities requiring priority attention and action to protect the integrity of Department of Health and 
Human Services (HHS) programs and the beneficiaries they serve.  This portfolio focuses on the Medicare 
hospice benefit. 
Hospice is an increasingly important benefit 
for the Medicare population.  It can provide 
Medicare Hospice Benefit 
great comfort to beneficiaries and their 
families and other caregivers at the end of a  What is hospice care?  Hospice care serves terminally ill 
beneficiarys life.  The number of hospice  beneficiaries who decide to forgo curative treatment for the terminal 
illness and instead receive palliative care.  Hospice care aims to make 
beneficiaries has grown every year for the 
the beneficiary as physically and emotionally comfortable as possible 
past decade.  In 2016, Medicare spent about 
and allow the beneficiary to remain in his or her home environment.  It 
$16.7 billion for hospice care for 1.4 million  is an interdisciplinary approach to treatment that includes, among 
beneficiaries, up from $9.2 billion for fewer  other things, nursing care, medical social services (services based on 
than 1 million beneficiaries in 2006.  With this  the patient's psychosocial assessment and the patient's and family's 
needs), hospice aide services, medical supplies, and physician services.   
growth, OIG has identified significant 
vulnerabilities.  OIG evaluations and audits  Who provides it?  Medicare-certified hospices provide the care.  
have raised concerns about hospice billing,  Hospices may be for-profit, nonprofit, or government-owned.  Care 
may be provided in various settings, including the home or other 
Federal oversight, and quality of care 
places of residence, such as an assisted living facility, skilled nursing 
provided to beneficiaries.  OIG investigations 
facility, or other nursing facility.    
of fraud cases have uncovered hospices 
Who is eligible?  To be eligible for Medicare hospice care, a 
enrolling patients without the beneficiarys 
beneficiary must be entitled to Medicare Part A and be certified as 
knowledge or under false pretenses, 
having a terminal illness with a life expectancy of 6 months or less if the 
enrolling beneficiaries who are not terminally  illness runs its normal course.  Upon election of hospice care, the 
ill, billing for services not provided, paying  beneficiary waives all rights to Medicare payment for services related to 
kickbacks, and falsifying documentation.    the curative treatment of their terminal condition or related conditions.   
How does Medicare pay?  Medicare pays the hospice for each 
This portfolio describes the growth in 
day that a beneficiary is in care, regardless of the quantity or quality of 
hospice utilization and reimbursement, and it 
services provided on that day.  Medicare pays a different daily rate for 
summarizes key vulnerabilities that OIG has 
each of the four levels of hospice care: routine home care, general 
identified and continues to monitor.  The  inpatient care, continuous home care, and inpatient respite care.  
portfolio also includes recommendations to 
CMS to address these vulnerabilities.   
OIGs body of work covering hospice care since 2005 serves as the basis for this portfolio.  This work 
includes in-depth looks at specific levels of care and settings.  It focuses on covered hospice services such 
as nursing, physician, medical social, and hospice aide services.  It does not focus on volunteer services.  
See Appendix B for a list of OIG hospice reports.  The portfolio also includes descriptions of OIG 
investigative efforts involving hospices, which resulted in 25 criminal actions, 66 civil actions, and  
$143.9 million investigative receivables from fiscal year (FY) 2013 to FY 2017.   
 
 
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OIG recognizes that many hospices meet Medicare requirements and provide high-quality care.  This 
portfolio focuses on vulnerabilities and 
possible solutions to improve the program    The Four Levels of Hospice Care 
for all hospice beneficiaries.  Future OIG 
Medicare pays for four levels of hospice care.  Medicare-certified 
work will focus on quality of care in  hospices are required to provide each of these levels when needed.1 
hospices, hospice billing, and compliance.    Hospices can provide services directly or under arrangement. 
  Routine home care is the most commonly used.  It is for any day a 
By leveraging advanced analytic techniques 
hospice beneficiary is at home and not receiving continuous 
to detect potential vulnerabilities and fraud 
home care, which is a more intensive level of care.  Routine home 
trends, OIG is better able to target resources  care can be provided in the home or other places of residence, 
at those hospices in need of oversight,  such as an assisted living facility or nursing facility.  In FY 2017, 
leaving others free to provide care and  hospices were paid $190.55 per day for days 1-60 of a 
beneficiarys routine home care and $149.82 per day after day 60.  
services without unnecessary disruption.   
Before 2016, the daily rate paid to hospices did not change based 
OIG work referenced throughout this  on the beneficiarys time in care.2  
  General inpatient care is for pain control or symptom 
document was conducted in accordance 
management that cannot be managed in other settings, such as 
with the professional standards applicable to 
the beneficiarys home.  General inpatient care is intended to be 
audits, evaluations, and investigations.  short term and may be provided in a hospice inpatient unit, a 
hospital, or a skilled nursing facility (SNF).  In FY 2017, hospices 
 
were paid $734.94 per day for general inpatient care. 
  Continuous home care is allowed only during brief periods of 
  crisis and only as necessary to maintain the individual at home.  In 
FY 2017, hospices were paid $964.63 per day for continuous 
  home care.  This is based on an hourly rate of $40.19 per hour.  
  Inpatient respite care is short-term inpatient care provided to the 
beneficiary when necessary to relieve the caregiver.  In FY 2017, 
 
hospices were paid $170.97 per day for inpatient respite care. 
 
 
   
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FINDINGS: TRENDS IN MEDICARE HOSPICE 
 
  
Hospice Use Has Grown Steadily Over the Past Decade
Medicare paid   Medicare paid $16.7 billion for hospice care in 2016, an increase of  
81 percent since 2006.  Over this period of time, the number of Medicare 
$16.7 billion for 
hospice beneficiaries increased each year.  About 1.4 million beneficiaries 
hospice care in 2016  
received hospice care in 2016, an increase of 53 percent since 2006.  See 
Exhibit 1.  Increases in hospice care were greater than increases in Medicare 
spending and enrollment in general.  From 2006 to 2016, total Medicare 
spending grew 66 percent, while the total number of Medicare beneficiaries 
grew 32 percent.3   
Exhibit 1: Hospice payments, providers, and beneficiaries have grown.     
Source: OIG analysis of CMS data, 2017. 
OIG has found that patient characteristics, Medicare payments, and services 
provided differ among care settings and between for-profit and nonprofit 
hospices.   
More than one-half of hospice beneficiaries55 percentreceived care in 
the home, and 25 percent received care in a nursing facility or SNF in 2016.  
Thirteen percent of hospice beneficiaries received care while residing in an 
assisted living facility (ALF).  Compared to other settings, ALFs has had the 
greatest growth in hospice beneficiaries; from 2010 to 2016, the number of 
beneficiaries receiving care in ALFs grew 64 percent.    
The number of hospices serving Medicare beneficiaries has increased every 
year since 2006.  In 2016, a total of 4,374 hospices provided care to 
Medicare beneficiaries.  For-profit hospices accounted for 64 percent of the 
total.  These hospices received more than one-half of the dollars (55 
percent), and served just under half (49 percent) of the beneficiaries.  Of all 
hospices, 34 percent were small (fewer than 90 beneficiaries per year),  
37 percent were medium sized (90 to 320 beneficiaries per year), and  
29 percent were large (over 320 beneficiaries per year).   
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FINDINGS: ENSURING BENEFICIARIES RECEIVE APPROPRIATE HOSPICE 
CARE
 
Hospices Do Not Always Provide Adequate Services to 
Beneficiaries and Sometimes Provide Poor Quality Care 
  
Key services are  When beneficiaries elect hospice care, they are choosing to receive care that 
will not cure their terminal illness, but should provide comfort and relief 
sometimes lacking  
from pain.  All services related to their terminal illness become the hospices 
responsibility.4  Yet hospices do not always provide the care beneficiaries 
need to control pain and 
manage symptoms.   
Notably, hospices provided 
fewer services than outlined 
in the plans of care for  
31 percent of claims for 
hospice beneficiaries residing 
in nursing facilities.5  In addition, hospices did not provide adequate nursing, 
physician, or medical social services in 9 percent of general inpatient care 
stays in 2012.6  These services are particularly important to beneficiaries in 
general inpatient care because they have uncontrolled symptoms requiring 
pain control or symptom management that cannot be provided in other 
settings.7  In some cases, hospices were not able to effectively manage 
symptoms or medications, leaving beneficiaries in pain for many days.   
 
Examples of Hospices Providing Poor Quality Care 
 
  A hospice billed Medicare for serving a 101-year old beneficiary with dementia.  He had uncontrolled 
pain throughout his 16 days in general inpatient care.  The hospice did not change his pain 
medication until the last day and did not provide him the special mattress he needed for more than 
a week.8   
 
  A hospice billed for 17 days of general inpatient care for a 70-year old beneficiary, but never visited 
him.  Instead, the hospice called his family to inquire how he was doing.9 
 
  An 89-year old beneficiarys respiratory symptoms were uncontrolled for 14 days during a general 
inpatient care stay in which the hospice rarely changed his medication dosage.  The beneficiary 
continued to experience respiratory distress and anxiety.10  
 
 
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Hospices often do a  Proper care planning helps ensure that beneficiaries receive the care and 
attention they need and that services are coordinated effectively.  Yet 
poor job care 
hospices often fall short in care planning. 
planning   
Hospices are required to establish an individualized written plan of care for 
each beneficiary they serve and to provide services that meet the plan.11  
The plan of care must be developed 
by an interdisciplinary group that  Plans of care play a key role 
includes a physician, a registered 
nurse, a social worker, and a pastoral  Proper care planning is crucial 
or other counselor.  This helps ensure  in providing beneficiaries the 
that the hospice team meets all of the  care they need.  Plans must be 
beneficiarys needs.  The plan of care 
individualized and detailed. 
must also contain a detailed 
statement of the scope and frequency of needed services.12   
Hospices often fail to meet these requirements.  Specifically, hospices did 
not meet plan of care requirements in 85 percent of general inpatient care 
stays in 2012.13  An OIG study several years earlier, which focused on all 
levels of hospice care provided in nursing facilities, found that hospices 
failed to meet requirements for plan of care for 63 percent of claims.14  
Hospices often did not involve all members of the interdisciplinary group in 
establishing the plans or failed to include a detailed statement of the scope 
and frequency of needed services in the plans of care.15  
Hundreds of  In each year from 2006 to 2016, hundreds of hospices provided only the 
most basic level of careroutine home careto all the beneficiaries they 
hospices provide 
served throughout the year.  In 2016, a total of 665 hospices provided only 
only one level of 
routine home care.  This is an increase of nearly 55 percent from 2011, when 
care    429 hospices did so.16   
  Medicare pays for three other levels of hospice care in addition to routine 
home care.17  Hospices must provide, directly or under arrangements, these 
levels when needed.18  When hospices provide just routine home care, it 
calls into question beneficiaries access to needed services.  It is critical that 
intense services, such as general inpatient care and continuous home care, 
be available to control the beneficiarys pain and other symptoms when 
needed.  Respite inpatient care, which offers relief to caregivers, should also 
be available given the essential role that caregivers and family members 
play in caring for their loved ones at the end of life.   
   
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Most beneficiaries  In each year from 2006 to 2016, about three-quarters of hospice 
beneficiaries did not have a visit with a hospice physician.  Medicare does 
do not see a hospice 
not require physician visits, and 
physician   
hospices can separately bill for 
them if provided.19  Most 
beneficiaries do not receive 
visits.   
This includes beneficiaries with 
complex needs receiving 
general inpatient care in 
hospice inpatient units.  Again, 
physician visits are not a 
requirement of general 
inpatient care.  However, it is 
important to note that beneficiaries are placed in this high level of care 
when the hospice determines that their pain or other symptoms are 
uncontrolled and cannot be managed at home.20   
  
Common fraud  OIG has uncovered a number of fraud schemes in hospice care that 
schemes involve  negatively affect beneficiaries and their families and caregivers.  Some fraud 
schemes involve paying recruiters to target beneficiaries who are not 
inappropriately 
eligible for hospice care, while other schemes involve physicians falsely 
enrolling 
certifying beneficiaries.  For example, a hospice physician inappropriately 
beneficiaries   certified a beneficiary as terminally ill who just days before was determined 
by a hospital to be in good shape.     
Beneficiaries are put at risk when they are enrolled in hospice care 
inappropriately, as Medicare hospice does not pay for curative treatment for 
a beneficiarys terminal illness. 21  Therefore, a beneficiary who is 
inappropriately enrolled in hospice care might be unwittingly forgoing 
needed treatment.  In one example, a hospice falsely told a beneficiary that 
she could remain on a liver transplant list even if she elected hospice care.  
When the beneficiary elected hospice care, she was removed from the 
transplant list.  After the beneficiary learned of this, she stopped hospice 
care so she could be reinstated on the transplant list.  As this example 
demonstrates, it is critical that beneficiaries know when they are in hospice 
care and what that means for their treatment options. 
 
 
 
 
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Examples of Fraud Schemes Affecting Beneficiaries 
 
  An owner of a Mississippi hospice used patient recruiters to solicit beneficiaries who were not eligible for 
hospice care.  These patients were not even aware that they were enrolled in hospice care.  The owner 
submitted fraudulent charges and received more than $1 million from Medicare.22  The owner was later 
excluded from the Medicare program. 
 
  A Minnesota-based hospice chain agreed to pay $18 million to resolve allegations that it inappropriately 
billed Medicare for care provided to beneficiaries who were not eligible for hospice because they were 
not terminally ill.  The hospice chain also allegedly discouraged physicians from discharging ineligible 
beneficiaries.23 
 
  Two certifying physicians from one California hospice were found guilty of health care fraud for falsely 
certifying beneficiaries as terminally ill.  Both physicians were excluded from the Medicare program.  The 
false certifications were part of a larger fraud scheme organized by the hospice owner.  The scheme 
involved illegal payments to patient recruiters for bringing in beneficiaries, creating fraudulent diagnoses, 
certifying beneficiaries as terminally ill when they were not, and altering medical records.  The owner 
pleaded guilty to health care fraud and was sentenced to 8 years in Federal prison.24 
 
 
 
Beneficiaries and Their Families and Caregivers Do Not Receive 
Crucial Information To Make Informed Decisions About Hospice 
Care  
  
CMS provides  CMS does not provide comprehensive information to the public that is 
essential for making informed decisions about hospice care.  CMS launched 
beneficiaries little 
a compare website about hospices in August 2017 called Hospice Compare.  
information about 
Hospice Compare was created much later than compare websites for 
hospice quality   hospitals, nursing facilities, and home health agencies.  Compare websites 
for each of these providers were created over a decade ago.  
 
Hospice Compare does not include critical information about the quality of 
care provided by individual hospices and offers no information about 
complaints filed against individual hospices.  This information is essential in 
helping beneficiaries and their families choose the hospice that would best 
fit their needs and provide good care.  
CMS is required to develop quality measures for hospices.  These measures 
must go through a process in which they are endorsed by a consensus-
based entity, such as the National Quality Forum.  Hospices review the data 
for these measures before they are made available to the public.25   
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Currently, Hospice Compare includes some quality measures self-reported 
by the hospice, such as whether the patient was checked for pain, and some 
quality measures from a survey of family caregivers, such as their willingness 
to recommend the hospice. 26  These measures do not capture a patients 
full experience with hospice care.    
Hospice Compare does not include any information about the number, 
type, and severity of problems found during surveys and complaint 
investigations.  This information 
would benefit beneficiaries and their  Hospice Surveys 
families and caregivers by alerting 
them to hospices found to have done  Surveyors conduct onsite 
a poor job caring for patients.   reviews of hospices every  
Although this information is required  3 years to promote 
to be made public,27 CMS does not 
compliance and quality care.  
include it on Hospice Compare.  
Surveyors observe the 
Instead, some States publish this 
operations of the hospice, 
information on their websites.  
review clinical records, and 
Gaining access to hospice survey and 
visit patients.  Surveys are also 
complaint information is difficult and 
conducted in response to 
time consuming, rendering it largely 
unhelpful.  In contrast, CMS publishes  complaints. 
survey and complaint information 
about nursing homes on the nursing home compare website.  
 
Hospices often  Beneficiaries and their families and caregivers do not always get the 
information they need when they elect hospice care because hospices often 
provide 
provide incomplete or inaccurate information on election statements.  The 
beneficiaries 
hospice election statement is an important source of information about the 
incomplete or  benefit, and hospices are required to provide it.  It is written by the hospice 
and must be signed by a beneficiary or representative before the start of 
inaccurate 
care.  The statement should be complete and accurate so that beneficiaries 
information about 
and their caregivers understand what they are entitled to receive and what 
the benefit  
they must give up with the election of hospice care. 
  In 35 percent of general inpatient care stays, however, hospices election 
statements lacked required information or had other vulnerabilities.28  Most 
 
commonly, these statements neglected to specify that the beneficiary was 
electing the Medicare hospice benefit as opposed to Medicaid hospice or 
some other insurance.  It is important for beneficiaries to know which 
benefit they are receiving, especially because eligibility criteria and election 
periods in some State Medicaid programs differ from those of Medicare, 
and private health insurance may cover hospice care differently than 
Medicare.  
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Some election statements did not mentionas requiredthat the 
beneficiary was waiving coverage of certain Medicare services by electing 
hospice care, or inaccurately stated which Medicare benefits were waived.  
Other election statements did not stateas requiredthat hospice care is 
palliative rather than curative.  CMS recently developed model text that 
hospices can use when they write their election statements.29  It is crucial 
that beneficiaries and their families and caregivers understand that when 
beneficiaries begin hospice care they are turning over all care for their 
terminal illness to the hospice.   
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FINDINGS: PROTECTING THE MEDICARE HOSPICE PROGRAM 
 
 
Inappropriate Billing by Hospices Costs Medicare Hundreds of 
Millions of Dollars  
Hospices frequently  Reviews of individual hospices have found improper payments ranging from 
$447,000 to $1.2 million for services not meeting Medicare requirements.  In 
bill Medicare for a 
these cases, the hospices billed for inappropriate levels of care, lacked 
higher level of care 
required certifications of terminal illness, or did not have sufficient clinical 
than the beneficiary  documentation.30 
needs  
Hospices have also inappropriately billed for expensive levels of care that 
were not needed.  Specifically, in 2012 hospices billed one-third of general 
 
inpatient care stays inappropriately, costing Medicare $268 million.31  
  General inpatient care is the second most expensive level of hospice care 
and should only be billed when the beneficiary has uncontrolled pain or 
symptoms that cannot be managed at home. 
Hospices often billed for general inpatient care when the beneficiary 
needed only routine home care.  As a result, these hospices were paid  
$672 per day instead of $151 per day.32  At other times, the hospice 
inappropriately billed for general inpatient care when the beneficiarys 
caregiver was not available and inpatient respite care was needed.  Again, 
the hospices received more than they should have.  By billing 
inappropriately, the hospices received $672 per day for general inpatient 
care instead of $156 per day for inpatient respite care, the level of care 
specifically designed to relieve caregivers.33  
Hospices were more likely to bill inappropriately for general inpatient care 
provided in SNFs than general inpatient care provided in other settings.  
Forty-eight percent of general inpatient care stays in SNFs were 
inappropriate compared to 30 percent in other settings.  In addition, for-
profit hospices were more likely than other hospices to bill inappropriately 
for this level of care.  For-profit hospices billed 41 percent of their general 
inpatient care stays inappropriately.  In comparison, other hospices, 
including nonprofit and government-owned hospices, billed 27 percent of 
their general inpatient care stays inappropriately. 
 
 
 
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Examples of Hospices Billing Inappropriately 
 
  A for-profit hospice in Mississippi inappropriately billed Medicare for a general inpatient care stay lasting 
over 7 weeks for a beneficiary whose symptoms were under control.  She needed assistance only with 
personal care, eating, and the administration of medication, yet the hospice was paid almost $30,000 for 
general inpatient care.34 
 
  A for-profit hospice inappropriately billed for a beneficiary in Florida who entered general inpatient care for 
symptom management.  Her symptoms were managed within 2 days, yet she remained in general inpatient 
 
care for 15 additional days.  Medicare paid close to $12,000 for this stay.35 
 
  A hospice in New York billed for 1 month of continuous home care for dates after the beneficiarys death. 
The hospice improperly received at least $1,266,517 for hospice services billed on behalf of this beneficiary 
and others that did not comply with Medicare requirements.36  
 
  A hospice in Puerto Rico billed for services after the beneficiary revoked the hospice election.  The hospice 
received at least $453,558 in improper payments for services billed on behalf of this beneficiary and others 
that did not comply with Medicare requirements.37  
  
 
Medicare sometimes  Medicare sometimes paid for drugs through Part D for hospice beneficiaries 
when payment for these drugs should have been covered by the daily rate 
pays twice for the 
paid to the hospice.  Hospices are required to provide the beneficiarys 
same service  
drugs that are used primarily for the relief of pain and symptom control 
related to the terminal illness.38  If Part D pays for them, Medicare is in effect 
 
paying twice.  Also, beneficiaries may face significant copays depending on 
the plan and the drug. 
OIG found that Part D and beneficiaries paid more than $30 million in 2009 
for drugs in certain categories that potentially should have been covered 
under the daily rate paid to hospices.  These categories include analgesic, 
antinausea, laxative, or antianxiety drugs, which are commonly used in 
hospice care. 39 
In 2012, OIG found that Part D inappropriately paid for more than 100 drugs 
for beneficiaries in sampled general inpatient care stays.40  These 110 drugs 
were used primarily for the relief of pain and symptom control related to 
the hospice beneficiary's terminal illness and should have been provided by 
the hospice.  Some of them were analgesic, antinausea, laxative, or 
antianxiety drugs while others were not.41   
In addition to drugs, Medicare also paid twice for some physician services 
for hospice beneficiaries.  OIG identified nearly $566,000 in questionable 
claims for physician services provided to hospice beneficiaries in 2009.42  In  
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each of these cases, a service was billed under both the Part A hospice 
benefit and Part B even though it was from the same physician, on the same 
day, for the same beneficiary and terminal illness, leading OIG to suspect 
that the beneficiary did not receive two distinct services, but rather one 
service billed twice.43 
  
Hospice physicians  For hospice services to be covered by Medicare, a physician must certify a 
are not always  beneficiary as terminally ill every election period.44  This certification is based 
on the physicians clinical judgment.45  The physician is required to compose 
meeting 
a narrative and include an attestation in each certification of terminal illness.  
requirements when 
These requirements help to ensure that physicians are involved in 
certifying  determining that hospice care is appropriate for the beneficiary. 
beneficiaries for 
However, some hospice physicians are not meeting requirements when 
hospice care  certifying beneficiaries.  In 14 percent of general inpatient care stays in 2012, 
the certifying physician did not meet at least one requirement.46  
 
Specifically, the physicians did not explain their clinical findings or attest that 
their findings were based on their examination of the beneficiary or review 
of the medical records.  
 
Hospice fraud  OIG has increasingly uncovered fraud schemes that put the program at risk 
schemes are  of improper payments.  These schemes include paying kickbacks for patient 
referrals, billing for medically unnecessary services, upcoding, and billing for 
growing and include 
services not provided.  In one case, a physician received kickbacks for 
kickbacks and false 
recruiting beneficiaries, many of whom were not terminally ill, but were 
billing  seeking opioids.  OIG has taken action against a number of hospices 
involved in fraud schemes.    
  
OIG Investigative Receivables for Hospice 
 
In FY 2013, OIG investigative receivables were $15.5 million and 
grew to $55.8 million in FY 2017.  In total, investigative 
receivables from FY 2013 to FY 2017 amounted to $143.9 
million. 
 
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Examples of Fraud Schemes  
 
  An Illinois-based hospice billed Medicare for medically unnecessary hospice services.  The hospice paid 
bonuses to staff for placing patients in general inpatient care when it was not medically necessary and 
provided gifts and kickbacks to nursing homes for referring patients to the hospice.47  A director of this 
hospice was excluded from the Medicare program. 
 
 
  A former hospice owner in Alabama pleaded guilty to defrauding Medicare of more than $3 million by 
billing for general inpatient care but providing a lower level of hospice care.48   In addition, the owner was 
 
excluded from the Medicare program. 
 
  An owner of a Mississippi hospice was sentenced to almost 6 years in prison for submitting fraudulent 
charges to Medicare and receiving millions of dollars in Medicare funds based on alleged hospice services 
for patients who were not eligible for hospice care, services that were never provided, and claims based on 
the forged signatures of physicians.  Another person involved in the scheme provided patient names and 
identifying information in return for kickback payments.49  This person and the hospices owner were 
excluded from the Medicare program. 
 
 
The Current Payment System Creates Incentives for Hospices To 
Minimize Their Services and Seek Beneficiaries Who Have 
Uncomplicated Needs  
 
Payments to  A hospice is paid for every day a beneficiary is in its care regardless of how 
hospices are based  many services it provides on a particular day.  The daily rate is determined 
by the level of care, with routine home care accounting for over 95 percent 
on the time spent in 
of all hospice care days.50  The base rate is the same for all beneficiaries in 
care, not services  routine home care, regardless of the beneficiarys needs or care setting.51   
provided  
A hospice is paid the same rate for routine home care provided in a nursing 
  facility as it is for routine home care provided in a beneficiarys home.  
However, unlike private homes, nursing facilities are staffed with 
professional caregivers and are required to provide personal care services.  
These services are similar to hospice aide services that are included in the 
daily rate of the hospice benefit.  Therefore, the hospice is being paid for 
aide services when a beneficiary resides in a nursing facility even though the 
facility is already providing them.  Furthermore, hospice payments do not 
include any adjustments or other payments that are tied to the quality of 
care provided by the hospices. 
The Patient Protection and Affordable Care Act requires Medicare hospice 
payment reform not earlier than October 1, 2013.52  CMS recently changed 
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the rate for routine home care, increasing the amount for the first 60 days 
and decreasing the amount thereafter; it also provides additional 
reimbursement if the hospice provides skilled care in the last 7 days of life.53  
However, the underlying structure of the benefitpaying for care on a daily 
basis regardless of the care providedremains unchanged. 
The financial incentives created by this payment system may cause hospices 
to seek out certain beneficiaries over others.  Hospices may target 
beneficiaries who are likely to have long lengths of stay or fewer needs, as 
these beneficiaries may offer hospices the greatest financial gain.  Hospices 
may look for these beneficiaries who have certain diagnoses or are in 
certain settings.  When hospices target specific types of beneficiaries, it 
raises questions as to whether hospices are enrolling beneficiaries 
appropriately, whether they are serving all the beneficiaries who need care, 
and whether they have incentives to care for beneficiaries with greater 
needs.  The financial incentives in the current system also could cause 
hospices to minimize the amount of services they provide.   
 
On average, hospices provided 4.8 hours of visits per week and were paid 
Hospices typically 
about $1,100 per week for each beneficiary receiving routine home care in 
provide less than  
an ALF in 2012.54  Most of the visits were from aides.  Of note, 25 hospices 
5 hours of visits per  did not report making any visits to their beneficiaries receiving routine 
week   home care in ALFs in 2012.  This involved 210 beneficiaries.  Medicare paid 
these hospices a total of $2.3 million to care for these beneficiaries.  
 
These findings are similar to earlier OIG findings regarding hospice care 
provided in nursing facilities.55  Hospices provided an average of 4.2 visits 
per week to hospice beneficiaries in nursing facilities.  This included the 
three most common servicesnursing, hospice aide, and medical social 
servicescombined.  Again, hospice aide services were the most commonly 
provided.   
 
Hospices seldom  Hospices must make services available, as needed, on a 24-hour basis,  
7 days a week.56  Hospices provided fewer services on weekends, however, 
provide services on 
raising concerns about whether beneficiaries needs are adequately served 
weekends  
on weekends.  Hospices provided the great majority of services to 
beneficiaries in ALFs during the workweek and rarely on weekends in 2012.  
 
Specifically, between 18 and 20 percent of hours were provided on each of 
the weekdays.  In contrast, only 4 percent of the hours were provided on 
Saturdays and 3 percent on Sundays.  See Exhibit 2.  Hospices are paid for 
every day a beneficiary is under their care, and the rates are the same for 
every day of the week. 
 
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Exhibit 2: Hospice visits drop off on weekends.  
 
 
Source: OIG analysis of CMS data, 2013. 
Note: Totals do not sum to 100 percent because of rounding. 
 
Hospices were also more likely to provide more acute caregeneral 
inpatient care levelon weekdays than weekends.57  This level is for pain 
control or symptom management that cannot be managed in other 
settings, making it critical that beneficiaries receive it when they need it.  At 
least 16 percent of general inpatient care stays started on each weekday, 
while 8 percent started on Sundays and 11 percent on Saturdays. 
 
Hundreds of  Medicare paid $2.1 billion for hospice care provided in ALFs in 2012, an 
increase of 119 percent from 2007.58  The median amount Medicare paid 
hospices target 
hospices for care for beneficiaries in ALFs was $16,195, twice as much as the 
beneficiaries in 
median amount for beneficiaries at home.59  The longer lengths of stay for 
certain settings who  beneficiaries in ALFs explain the higher payments, as total Medicare 
have long lengths of  payments are a function of time spent in care.  Over one-third of 
beneficiaries in ALFs received hospice care for more than 180 days.  
stay 
The median stay for beneficiaries in ALFs who were served by for-profit 
hospices was almost 4 weeks longer than the median for nonprofit 
hospices.  Consequently, for-profit hospices received thousands of dollars 
more than nonprofits per beneficiary in ALFs.  See Exhibit 3.   
 
 
 
 
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Exhibit 3: Time in care was longer and payments were higher in for-profit hospices. 
  Median time in hospice   Median Medicare 
payment amount  
For-Profit Hospice   111 days  $18,261 
Nonprofit Hospice  85 days   $13,941 
Difference  26 days  $4,320 
            Source: OIG analysis of CMS data, 2013. 
Most hospice beneficiaries in ALFs60 percenthad diagnoses that 
typically require less complex care.  These include ill-defined conditions, 
mental disorders, or Alzheimers disease.60  Beneficiaries in ALFs were six 
times more likely to have these diagnoses than a diagnosis of cancer.  See 
Exhibit 4.   
Exhibit 4: Most beneficiaries in assisted living facilities and nursing facilities had 
diagnoses that typically require less complex care. 
Percentage of Beneficiaries with Diagnoses of Ill- Percentage of 
Primary Setting of Hospice 
Defined Conditions, Mental Disorder, or  Beneficiaries with 
Care 
Alzheimers Disease  Diagnosis of Cancer 
ALF  60%  10% 
Nursing Facility  54%  13% 
Skilled Nursing Facility  52%  15% 
Home  27%  38% 
            Source: OIG analysis of CMS data, 2013. 
            Note: Includes beneficiaries who received care in 2012. 
Beneficiaries with cancer often require complex care and receive hospice 
care for substantially fewer days than beneficiaries with diagnoses of ill-
defined conditions, mental disorders, or Alzheimers disease.  
Almost 100 hospices stand out for their focus on ALFs.  These  
97 hospices received most of their Medicare hospice payments in 2012 for 
care provided in ALFs.  All but seven of these hospices were for-profit.  
Similarly, 263 hospices targeted beneficiaries in nursing facilities.  For each 
of these hospices, two-thirds of the beneficiaries served resided in nursing 
facilities.61  Almost three-quarters of the hospices were for-profit.  Like 
beneficiaries in ALFs, beneficiaries residing in nursing facilities commonly 
have conditions that are associated with less complex care, longer stays, and 
more Medicare payments.   
In addition, hospices may target beneficiaries in nursing facilities because 
nursing facilities are required to provide personal care services.  As 
discussed earlier, these services are similar to the aide services that hospices 
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should provide under the hospice benefit and are included in the daily 
payment rate.  OIG has recommended that hospice care provided in nursing 
facilities should be paid at a lower rate because of this overlap.  For more 
information, see our prior work.62  The Medicare Payment Advisory 
Commission (MedPAC) has also suggested a reduction in the payment rate 
for beneficiaries in nursing facilities.63  As mentioned, CMS recently 
increased the rate for routine home care in all settings for the first 60 days 
and decreased the amount thereafter. 
   
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CONCLUSION AND RECOMMENDATIONS 
Hospice is an increasingly important benefit for the Medicare population.  It can provide great comfort to 
beneficiaries and their families and caregivers at the end of a beneficiarys life.  Hospice use has grown 
steadily over the past decade.  Medicare now pays $16.7 billion for hospice care for 1.4 million 
beneficiaries.  Recognizing the importance of the benefit, OIG has produced numerous evaluations and 
audits of the hospice program, including in-depth looks at specific levels of care and settings.  OIG has 
also conducted criminal and civil investigations of hospice providers, leading to the conviction of 
individuals, monetary penalties, and civil False Claims Act settlements.  Through this extensive work, OIG 
has identified vulnerabilities in the benefit.  These vulnerabilities need to be addressed to ensure that 
beneficiaries receive quality care and that Medicare payments to hospices are appropriate.   
The following recommendationsbased on OIGs body of hospice workaddress these vulnerabilities.  In 
some cases, we have expanded on recommendations that we have made in the past that remain 
unimplemented.  We recognize that CMS continues to work on implementing past OIG recommendations, 
and we note where CMS has made progress in addressing specific vulnerabilities.  However, more needs to 
be done.  We look forward to more dialogue with CMS in our combined efforts to protect beneficiaries 
and safeguard the program.  In addition, OIG will continue to conduct audits, evaluations, and 
investigations to identify vulnerabilities and provide recommendations to further strengthen the Medicare 
hospice benefit.64   
To improve the quality of care for beneficiaries and strengthen program integrity, CMS should: 
Strengthen the survey process to better ensure that hospices provide beneficiaries 
with needed services and quality care 
Protecting beneficiaries and making sure they receive what they need from hospices at the end of their 
lives is paramount.  CMS relies on surveyors to conduct onsite reviews of hospices as its primary tool to 
promote hospice compliance and quality care.  Surveyors observe the operation of the hospice, review 
clinical records, and visit patients.  Surveyors cite the hospice with a deficiency if it fails to meet a 
requirement needed for participating in the Medicare program.  CMS has recently provided training to 
surveyors about care planning.    
CMS should further strengthen this survey process to better ensure beneficiaries receive needed services 
and quality of care.  Specifically, CMS should:  
  Analyze claims data to inform the survey process.  CMS should identify hospices that 
do not provide all levels of care, infrequently provide physician services, or rarely provide 
care on weekends.  CMS should instruct surveyors to pay particular attention during their 
review of these hospices to the issues identified. 
  Analyze deficiency data to inform the survey process.  CMS should identify hospices 
with persistent problems (e.g., repeat deficiencies) and instruct surveyors to focus on these 
problem areas during their reviews of the individual hospices. The analyses of deficiency 
data would be in addition to the reviews of previous surveys and complaints that may be 
done by individual surveyors. 
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Seek statutory authority to establish additional remedies for hospices with poor 
performance  
CMS does not have adequate tools to address hospices with poor performance.  Currently, CMSs only 
recourse when a hospice is found to have serious deficiencies is to terminate the hospice from the 
Medicare program, a drastic step that limits CMSs ability to address performance problems.  The lack of 
intermediate remedies undermines the survey process, as hospices have few incentives to improve 
performance.  If CMS cannot effectively address hospices performance problems, it cannot protect 
beneficiaries or the program.  CMS must be able to take action against providers that do not fulfill their 
responsibilities to beneficiaries and the program.  Specifically, CMS should: 
  Seek statutory authority to establish additional, intermediate remedies for poor 
hospice performance.  Such measures could include directed plans of correction, directed 
in-service training, denials of payment for new admissions or for all patients, civil monetary 
penalties, and imposition of temporary management. 
Develop and disseminate additional information on hospices to help beneficiaries 
and their families and caregivers make informed choices about their care 
Beneficiaries and their families and caregivers need reliable information about hospice performance so 
they can compare providers and make the best decision for their care needs.  CMS has taken the positive 
step of launching the Hospice Compare website.  At this time, however, it offers limited information.  CMS 
is developing two claims-based quality measures, but additional information is needed.  CMS should 
include on Hospice Compare critical data that will enable beneficiaries and their caregivers to make more 
informed choices and will hold hospices more accountable for the care they provide.  Specifically, CMS 
should: 
  Develop other claims-based information and include it on Hospice Compare.  This 
would be in addition to the quality measures that are included on the website.  Claims-
based data have been previously recommended by OIG, MedPAC, hospice experts, and 
others.  Such data could include the average number of services a hospice provides, the 
types of services, how often physician visits are provided, and how often a hospice provides 
services on weekends.   
  Include on Hospice Compare deficiency data from surveys, including information 
about complaints filed and resulting deficiencies.  CMS should provide the number 
and nature of deficiencies for each hospice as available, and report information by key 
categories, such as care planning and assessments.  This should be provided in a 
consumer-friendly way to inform beneficiaries about hospices that have provided poor 
care.  
Educate beneficiaries and their families and caregivers about the hospice benefit 
The goals of hospice care are to help terminally ill beneficiaries continue life in comfort and to support 
beneficiaries families and caregivers.  Having complete, accurate information about hospice is crucial to 
achieving these goals.  We support CMSs efforts to improve election statements by developing model 
text.  In addition to these efforts, CMS should proactively educate beneficiaries and their families and 
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caregivers about this important benefit.  This may also help protect beneficiaries from becoming victims of 
fraud schemes.  Specifically, CMS should: 
  Work with its partners, such as hospitals and caregiver groups, to make available 
consumer-friendly information explaining the hospice benefit to beneficiaries and 
their families and caregivers.  CMS has produced brochures, which are currently 
available on the Medicare website.  CMS has also included information such as a video 
explaining the benefit on Hospice Compare.  In addition to these efforts, CMS should work 
with health care partners to ensure that these and other consumer-friendly informational 
resources are easily accessible to families and caregivers who may benefit from learning 
about the hospice benefit.   
Promote physician involvement and accountability to ensure that beneficiaries get 
appropriate care 
Physicians serve a vital role in the appropriate provision of hospice services, but our work has shown that 
they are not always involved in decision making.  CMS has taken steps to remind hospices and physicians 
about the requirements for valid physician certifications and recertifications, but more needs to be done.  
Notably, we found that hospices did not always provide the care beneficiaries need to control pain and 
manage symptoms.  Specifically, CMS should: 
  Ensure that a physician is involved in the decisions to start and continue general 
inpatient care.  CMS should implement additional strategies to increase physician 
involvement and accountability so that beneficiaries get appropriate care.  Increased 
physician involvement could also help minimize the amount of time a beneficiary is in pain 
or has other uncontrolled symptoms.   
The interdisciplinary group, which includes the physician, is required to review and revise 
the patients plan of care as frequently as the patient's condition requires.  However, the 
care-planning process, which OIG found lacking, does not offer sufficient safeguards 
against inappropriate use of general inpatient care.  Another safeguard could be requiring 
the hospice to obtain a physicians order to change the level of care to general inpatient 
care and including the ordering physicians National Provider Identifier on the hospice 
claim.  The hospice could also have the physician sign off on the level of care at reasonable 
intervals during the general inpatient care stay.  These intervals should be determined by 
CMS.  Making the physician more accountable and requiring some record of the physicians 
involvement would help ensure that care is appropriate; it could also improve the quality of 
care.   
Strengthen oversight of hospices to reduce inappropriate billing 
To reduce inappropriate billing, CMS must strengthen its oversight of hospices.  Our work has identified 
certain hospice claims that are particularly vulnerable to abuse.  CMS should increase oversight of these 
claims, targeting them for additional reviews.  Specifically, we recommend that CMS: 
  Analyze claims data to identify hospices that engage in practices or have 
characteristics that raise concerns.  CMS has made some progress in identifying 
hospices that depend heavily on nursing facility residents.  CMS should continue and 
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expand these efforts to include hospices that target beneficiaries in ALFs, those with a high 
percentage of beneficiaries with diagnoses that require less complicated care, and those 
that do not provide all levels of hospice care.  
  Take appropriate actions to follow up with hospices that engage in practices or 
have characteristics that raise concerns.  That is, after these hospices are identified, 
CMS should initiate probe and educate reviews, provide education, conduct prepayment 
reviews, make referrals to law enforcement or Recovery Auditors, or take other appropriate 
actions. 
  Increase oversight of general inpatient care claims and focus particularly on 
general inpatient care provided in SNFs, given the higher rate at which these stays 
were inappropriate. 
  Implement a comprehensive prepayment review strategy to address lengthy 
general inpatient care stays so that beneficiaries do not have to endure 
unnecessarily long periods of time in which their pain and symptoms are not 
controlled.  The prepayment reviews of lengthy general inpatient care stays that CMS 
contractors have conducted and plan to conduct are limited.  CMS should strengthen its 
use of this tool by providing additional direction to their contractors to make these reviews 
more comprehensive and effective.  This could include setting minimum thresholds to 
ensure that contractors review a sufficient number of hospices and include a sufficient 
number of claims in those reviews.  The reviews should determine whether general 
inpatient care was appropriate for each day of the stay or if another level of care was more 
appropriate.  The contractors should continue to use data analysis to target these reviews 
to stays most likely to be problematic.  CMS should also set criteria for when and how 
contractors should take action based on the results of their reviews.  Comprehensive 
prepayment reviews and appropriate followup will help promote effective symptom 
management and could reduce the time in which beneficiaries pain and other symptoms 
are unmanaged.   
  Develop and execute a strategy to work directly with hospices to ensure that they 
are providing drugs covered under the hospice benefit as necessary and that the 
cost of drugs covered under the benefit are not inappropriately shifted to Part D.  
CMS should target its interventions with hospices by reviewing Part D payments for drugs 
for hospice beneficiaries, focusing particularly on hospices that have beneficiaries with high 
numbers of Part D drugs or a high number of beneficiaries receiving Part D drugs. CMS 
described guidance it has given Part D plan sponsors to help them avoid paying claims that 
should be covered under the hospice benefit, which is also a helpful and important step.  
However, we recommend that CMS also intervene with hospices to ensure that they are 
providing the drugs covered under the hospice benefit as necessary so that these drugs are 
not inappropriately billed to Part D.   
 
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Take steps to tie payment to beneficiary care needs and quality of care to ensure 
that services rendered adequately serve beneficiaries needs, seeking statutory 
authority if necessary 
The current payment system is based on the beneficiarys time in care.  It pays the hospice a daily rate 
regardless of how many services the beneficiary needs on a particular day.  Also, the daily rate is the same 
regardless of where the beneficiary resides.  For instance, the routine home care rate is the same for a 
beneficiary residing at home with no personal assistance or nursing services as it is for a beneficiary 
residing in an assisted living facility or nursing facility.  Further, the payment system does not take into 
account the quality of care provided by hospices.  There are no adjustments in overall payments, bonus 
payments, or other methods that tie quality to payment for hospices. 
As a result, OIG found that the payment system creates financial incentives that raise a number of 
concerns, such as whether some hospices are serving only beneficiaries who offer the greatest financial 
gain, whether beneficiaries are being enrolled at the appropriate time, whether hospices are being paid 
the appropriate amount for the care they provide, and whether hospices have incentives to care for 
beneficiaries with greater needs.   
Moreover, OIG found that some hospices have targeted certain beneficiaries who are likely to have long 
lengths of stay.  OIG also found that some hospices typically provide less than 5 hours of visits per week 
and seldom provide services on weekends.  These findings demonstrate that the payment system may not 
be aligned with beneficiaries care needs and to providing appropriate and quality services.  Opportunities 
exist to adjust the payment structure to promote quality of care and better ensure that beneficiaries, 
particularly those with greater needs, have access to appropriate care. 
As discussed, CMS has made some changes to the payment system.  These changes are aimed at 
addressing long lengths of stay and ensuring that care is provided in the last days of life.  However, these 
changes do not address quality of care or whether payments are aligned with the beneficiarys needs 
outside of the last days.  Specifically, CMS should:  
  Assess the current payment system to determine what changes may be needed to 
tie payments to beneficiaries care needs and quality of care to ensure that services 
rendered adequately serve beneficiaries needs.  As part of its assessment, CMS should 
determine the extent to which payments are aligned with beneficiaries needs and not only 
to the services provided.  It should also determine the extent to which the current payment 
system incentivizes hospices to provide appropriate care to beneficiaries, particularly those 
with greater needs, and the extent to which the payment system promotes quality care.  In 
addition, CMS should assess the accuracy of hospice cost reports.  CMS should use only 
reliable data sources in its analysis of the current payment system.   
  Adjust payments based on these analyses, if appropriate, to ensure that the 
payment system is aligned with beneficiary needs and quality of care.  CMS stated 
that it does not have the authority to adjust payments based on factors other than cost of 
services provided.  Therefore, CMS may need to seek statutory authority to make 
adjustments to the payment system to ensure that eligible beneficiaries who choose to 
elect hospice care receive appropriate services. 
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  Modify the payments for hospice care in nursing facilities.  Adjustments should 
account for setting, which may affect care needs.  Notably, nursing facilities are required to 
provide personal care services, which are similar to hospice aide services that are paid for 
under the hospice benefit.  Therefore, hospice beneficiaries in a nursing facility would likely 
need fewer hospice aide services than hospice beneficiaries at home.  Also, the cost to the 
hospice of providing aide services to beneficiaries in nursing facilities may be less than the 
cost of providing these services to beneficiaries at private homes because an aide can visit 
multiple beneficiaries in a facility without having to travel to different locations.  For these 
reasons, the payment rate for routine home care in nursing facilities should be reduced 
when appropriate.  As noted earlier, CMS may need to seek statutory authority to make 
these changes. 
Address additional recommendations contained in prior OIG reports 
OIG has also made other recommendations in prior work that remain unimplemented.  See Appendix C for 
a list of these recommendations and the related OIG reports. 
   
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AGENCY COMMENTS AND OIG RESPONSE 
In our draft report to CMS, we recommended 16 specific actions.  CMS concurred with six 
recommendations, did not concur with nine, and neither concurred nor nonconcurred with one.  We 
considered CMSs comments carefully, and we clarified and combined two of our recommendations.  We 
remain committed to our recommendations and will continue to work with CMS to promote their 
implementation. 
Recommendations to strengthen the survey process 
CMS did not concur with the two recommendations to strengthen the survey process.  Specifically, CMS 
did not concur with the recommendations to analyze claims and deficiency data to inform the survey 
process.  Regarding claims data, CMS stated that surveyors do not determine the medical necessity of the 
services provided and are not an extension of the audit process.  Regarding deficiency data, CMS stated 
that surveyors review previous complaint allegations and investigations and previous survey findings and 
CMS does not believe additional actions are necessary. 
OIG notes that the survey process is critical to promoting compliance and patient care, and we agree with 
CMS that surveys help ensure that hospices provide all required services and meet all conditions of 
participation.  As we have shown in our work, claims data are key to understanding how the hospice 
program is working and are useful for many purposes in addition to auditing.  For example, we identified 
hospices that do not provide all levels of care, or rarely provide care on weekends.  CMS has also 
recognized the importance of claims data and has committed to developing claims-based quality 
measures.  As these examples demonstrate, claims data offer a wealth of information that surveyors could 
use to make the survey process more effective.  
In addition, we have found persistent problems in certain areas, such as care planning, that the survey 
process has not adequately addressed.  Deficiency data give valuable insights into these persistent 
problems.  Using deficiency data effectively to inform the survey process could promote hospice 
compliance, particularly in problem areas.  Additionally, deficiency data are crucial to understanding how 
well hospices are caring for beneficiaries.  Given the importance of these data, OIG is conducting further 
work on the nature and extent of hospice deficiencies and complaints. 
Recommendation to establish additional remedies for poor performance  
CMS neither concurred nor nonconcurred with the recommendation to seek statutory authority to 
establish additional remedies for hospices with poor performance.  CMS stated that it will consider this 
recommendation when developing requests for the Presidents Budget. 
Recommendations to develop and disseminate additional information on hospices 
CMS concurred with the recommendation to develop other claims-based information and include it on the 
Hospice Compare website.  CMS stated that it continues to develop claims-based quality measures, 
including potentially avoidable hospice care transitions and access to levels of hospice care. 
CMS did not concur with the recommendation to include on Hospice Compare deficiency data from 
surveys, including information about complaints filed and resulting deficiencies.  CMS stated that it is 
prohibited from publicly releasing information on any surveys performed by accrediting organizations 
unless the information relates to an enforcement determination.  CMS further noted that the information 
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OEI-02-16-00570   
on this issue would therefore be skewed, and users would be selecting hospices based on lack of 
information that favors hospices that use accrediting organizations.  CMS also stated that it has made 
information from surveys performed by State agencies publicly available.   
OIG continues to stress the importance of providing data to consumers to help them make informed 
choices.  We recognize the constraints in providing the data from the accrediting organizations.  As a first 
step, however, CMS should provide publicly in a consumer-friendly and readily accessible way the data 
that it can release.  We note that complaint information and resulting deficiencies from State surveyors
who investigate certain complaints from all hospicesare available for all hospices.  Also, to address 
uneven data, CMS could post an explanation about why similar information is not available for certain 
hospices.      
Recommendation to educate beneficiaries and their families and caregivers 
CMS concurred with the recommendation to work with its partners to make available information 
explaining the hospice benefit.  CMS stated that it has developed informational resources and will work to 
ensure that these resources are easily accessible to families and caregivers who may benefit from learning 
about the hospice benefit. 
Recommendation to promote physician involvement and accountability 
CMS did not concur with the two recommendations to promote physician involvement and 
accountability.  Specifically, CMS did not concur with the recommendations to require that hospices obtain 
a physicians order to change the level of care to general inpatient care and have the physician sign off on 
general inpatient care at reasonable intervals.  CMS stated that the hospice interdisciplinary group, which 
includes a physician, is required to approve general inpatient care and document this approval in the 
medical record.    
The goal of these recommendations is to increase physician involvement and accountability to ensure 
appropriate care for beneficiaries.  They could also help minimize the amount of time a beneficiary is in 
pain or has other uncontrolled symptoms.  To keep the focus on this broader goal, we combined the 
recommendations and are open to alternative ways of achieving it.  As we note in the report, the care-
planning processwhich OIG found to have persistent problemsdoes not offer sufficient safeguards 
against inappropriate use of general inpatient care or against poor quality care. 
Recommendations to strengthen oversight of hospices 
CMS concurred with four of the five recommendations to strengthen oversight of hospices.  Specifically, 
CMS concurred with the recommendations to analyze claims data to identify hospices that engage in 
practices or have characteristics that raise concerns and to take appropriate actions to follow up with these 
hospices.  CMS also concurred with the recommendation to increase oversight and focus particularly on 
general inpatient care provided in SNFs.  In addition, CMS concurred with the recommendation to 
implement a comprehensive prepayment review strategy to address lengthy general inpatient care stays 
so that beneficiaries do not have to endure unnecessarily long periods of time in which their pain and 
symptoms are not controlled.  CMS stated that its contractors conduct prepayment reviews of lengthy 
general inpatient care stays in hospices that have been found to have high amounts of these stays and 
recoup any overpayments found as a result of these reviews.  
Regarding Part D drugs, CMS did not concur with the recommendation to develop and execute a strategy 
to work directly with hospices to ensure that they are providing drugs covered under the hospice benefit 
as necessary.  CMS noted that it has directed certain plan sponsors to conduct audits for payments made 
Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio  25 
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for beneficiaries who are enrolled in hospice care to ensure that payments are made appropriately.  OIG 
notes that while working with Part D plan sponsors is an important step, working directly with hospices to 
ensure that they are providing the drugs covered under the hospice benefit as necessary is also a key part 
of oversight. 
Recommendations to take steps to tie payment to beneficiary care needs and quality of care 
CMS did not concur with the three recommendations about hospice payments.  Specifically, CMS did not 
concur with the first two recommendations to assess the current payment system and to adjust payments 
based on these analyses, if appropriate, to ensure that the payment system is aligned with beneficiary 
needs and quality of care.  CMS stated that it has reformed the hospice payment system to more 
appropriately pay hospices for the cost of providing care to beneficiaries and better align payment with 
beneficiary care needs during the course of a hospice stay.  CMS also stated that it is required to pay 
hospice providers based on the costs they incur when providing care. 
The current payment system is based on the beneficiarys time in care, and OIG remains concerned about 
whether hospices are being paid the appropriate amount for the care they provide and whether hospices 
are appropriately meeting beneficiaries care needs.  CMSs changes to the payment system did not link 
payments to the quality of care provided by hospices or to beneficiaries care needs outside the last days 
of life.  Opportunities exist to assess the current payment system and to make adjustments, if appropriate, 
to align with beneficiary needs and the quality of care; such changes may require new statutory authority.   
CMS did not concur with the third recommendation to modify the payments for hospice care in nursing 
facilities.  CMS stated that its analysis of hospice claims data demonstrated that patients residing in nursing 
facilities receive more visits than patients residing at home and thus the data did not support reducing the 
routine home care payment rate to differentiate payments based on site of service.  
OIG continues to recommend that the payment rate for routine home care in nursing facilities should be 
reduced when appropriate.  Nursing facilities are required to provide personal care services, which are 
similar to hospice aide services that are paid for under the hospice benefit.  Therefore, hospice 
beneficiaries in nursing facilities would likely need fewer hospice aide services than hospice beneficiaries at 
home.  We note that the data CMS provided also indicate that hospice visits to beneficiaries in nursing 
facilities were shorter than hospice visits to beneficiaries at home.  Also, the cost to the hospice of 
providing aide services to beneficiaries in nursing facilities may be less than the cost of providing these 
services to beneficiaries at private homes because an aide can visit multiple beneficiaries in a facility 
without having to travel to different locations.  CMS may need to seek statutory authority to make these 
changes.  For the full text of CMSs comments, see Appendix D. 
   
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 APPENDIX A: Key Recommendations to Improve the 
Medicare Hospice Program 
Recommendations to CMS 
Strengthen the survey process to better ensure that hospices provide beneficiaries with needed services and quality care 
1.  Analyze claims data to inform the survey process 
2.  Analyze deficiency data to inform the survey process 
Seek statutory authority to establish additional remedies for hospices with poor performance  
3.  Seek statutory authority to establish additional, intermediate remedies for poor hospice performance 
Develop and disseminate additional information on hospices to help beneficiaries and their families and caregivers make 
informed choices about their care 
4.  Develop other claims-based information and include it on Hospice Compare* 
5.  Include on Hospice Compare deficiency data from surveys, including information about complaints filed and resulting 
deficiencies 
Educate beneficiaries and their families and caregivers about the hospice benefit 
6.  Work with its partners, such as hospitals and caregiver groups, to make available consumer-friendly information 
explaining the hospice benefit to beneficiaries and their families and caregivers* 
Promote physician involvement and accountability to ensure that beneficiaries get appropriate care 
7.  Ensure that a physician is involved in the decisions to start and continue general inpatient care 
Strengthen oversight of hospices to reduce inappropriate billing 
  8.  Analyze claims data to identify hospices that engage in practices or have characteristics that raise concerns* 
  9.  Take appropriate actions to follow up with hospices that engage in practices or have characteristics that raise  
concerns* 
10.  Increase oversight of general inpatient care claims and focus particularly on general inpatient care provided in SNFs, 
given the higher rate at which these stays were inappropriate* 
11.  Implement a comprehensive prepayment review strategy to address lengthy general inpatient care stays so that 
beneficiaries do not have to endure unnecessarily long periods of time in which their pain and symptoms are not 
controlled* 
12.  Develop and execute a strategy to work directly with hospices to ensure that they are providing drugs covered under 
the hospice benefit as necessary and that the cost of drugs covered under the benefit are not inappropriately shifted 
to Part D 
Take steps to tie payment to beneficiary care needs and quality of care to ensure that services rendered adequately serve 
beneficiaries needs, seeking statutory authority if necessary 
13.  Assess the current payment system to determine what changes may be needed to tie payments to beneficiaries care 
needs and quality of care to ensure that services rendered adequately serve beneficiaries needs 
14.  Adjust payments based on these analyses, if appropriate, to ensure that the payment system is aligned with beneficiary 
needs and quality of care 
15.  Modify the payments for hospice care in nursing facilities   
* Indicates that CMS concurred. 
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APPENDIX B: List of Related OIG Reports 
   
Report  Issue Date 
Hospices Should Improve Their Election Statements and Certifications of Terminal Illness  
September 2016 
(OEI-02-10-00492) 
Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care 
March 2016 
(OEI-02-10-00491) 
Hospice of New York, LLC, Improperly Claimed Medicare Reimbursement for Some 
June 2015 
Hospice Services (A-02-13-01001) 
Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities  
January 2015 
(OEI-02-14-00070)  
The Community Hospice, Inc., Improperly Claimed Medicare Reimbursement for Some 
September 2014 
Hospice Services (A-02-11-01016) 
Servicios Suplementarios de Salud, Inc., Improperly Claimed Medicare Reimbursement 
August 2014 
for Some Hospice Services (A-02-11-01017) 
Frequency of Medicare Recertification Surveys for Hospices Is Unimproved  
August 2013 
(OEI-06-13-00130) 
Medicare Hospice: Use of General Inpatient Care (OEI-02-10-00490)  May 2013 
Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in Hospice  
June 2012 
(A-06-10-00059) 
Medicare Hospices that Focus on Nursing Facility Residents (OEI-02-10-00070)  July 2011 
Questionable Billing for Physician Services for Medicare Beneficiaries (OEI-02-06-00224)  September 2010 
Medicare Hospice Care for Beneficiaries Residing in Nursing Homes: Compliance with 
September 2009 
Medicare Coverage Requirements (OEI-02-06-00221) 
Medicare Hospice Care: Services Provided to Beneficiaries Residing in Nursing Facilities  
September 2009 
(OEI-02-06-00223) 
Hospice Beneficiaries Use of Respite Care (OEI-02-06-00222)  March 2008 
Medicare Hospice Care: Comparison of Beneficiaries in Nursing Facilities and 
December 2007 
Beneficiaries in Other Settings (OEI-02-06-00220) 
Medicare Hospices: Certification and Centers for Medicare & Medicaid Services 
April 2007 
Oversight (OEI-06-05-00260) 
 
   
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OEI-02-16-00570   
APPENDIX C: List of Additional Recommendations 
from Prior Reports* 
Provide guidance to hospices regarding the effects on beneficiaries when they revoke their election and 
when they are discharged from hospice care (Hospices Should Improve Their Election Statements and 
Certifications of Terminal Illness, OEI-02-10-00492).  (CMS did not concur.) 
Follow up on inappropriate general inpatient care stays and hospices that provided poor-quality care 
(Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491).  
(CMS concurred.) 
 
* This list does not include overpayment recovery recommendations included in some OIG reports. 
   
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APPENDIX D: Agency Comments 
 
 
 
 
 
   
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ACKNOWLEDGMENTS 
Nancy Harrison served as the team leader for this study.  Others in the 
Office of Evaluation and Inspections who conducted the study include 
Marissa Baron, Rachel Bryan, and Jenell Clarke-Whyte.  Office of Evaluation 
and Inspections staff who provided support include Evan Godfrey and 
Berivan Demir Neubert. 
We would also like to acknowledge the contributions of other Office of 
Inspector General staff, including Laura Ellis, Kathy Krause, and Stuart 
Wright.   
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New York regional 
office, and Nancy Harrison and Meridith Seife, Deputy Regional Inspectors 
General.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To obtain additional information concerning this report or to obtain copies, 
contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov.   
Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio  36 
OEI-02-16-00570   
ENDNOTES 
1 Medicare has two annual caps on hospice reimbursement.  The first cap limits the total number of days of inpatient care that a 
hospice may provide to 20 percent of the hospices total patient care days.  See Social Security Act,  1861(dd)(2)(A)(iii); 42 CFR  
418.302(f).  Inpatient care includes two of the four levels of hospice care: general inpatient care and inpatient respite care.  The 
second cap limits the total reimbursement that a hospice may receive in a given year.  The total annual payments to a hospice may 
not exceed a set per-patient amount multiplied by the number of beneficiaries who elected to receive hospice care from that 
hospice during the annual cap period.  See Social Security Act,  1814(i)(2); 42 CFR  418.309.  The 2017 cap amount is $28,404.99.  
See CMS, Update to Hospice Rates, Hospice Cap, Hospice Wage Index and Hospice Pricer for FY 2018, Transmittal R3828CP, 
Change Request 10131, August 4, 2017.  Accessed at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-
MLN/MLNMattersArticles/downloads/MM10131.pdf on January 31, 2018. 
2 The rates for each level of care are the unadjusted daily Medicare hospice payment rates for FY 2017.  Rates are adjusted on the 
basis of the beneficiarys geographic location. See CMS, MLN Matters, Updates to the Hospice Payment Rates, Hospice Cap, 
Hospice Wage Index, and Hospice Pricer for Fiscal Year 2017, MM9729, July 8, 2016.  Accessed at https://www.cms.gov/Outreach-
and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9729.pdf on January 26, 2018. 
3 The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2017 Annual 
Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medicare Insurance Trust Funds, p. 
10.  Accessed at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/ReportsTrustFunds/Downloads/TR2017.pdf on November 22, 2017.  See also, The Boards of Trustees, Federal Hospital 
Insurance and Federal Supplementary Medical Insurance Trust Funds, 2007 Annual Report of the Boards of Trustees of the Federal 
Hospital Insurance and Federal Supplementary Medicare Insurance Trust Funds, p. 5.  Accessed at https://www.cms.gov/Research-
Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2007.pdf on November 22, 2017 
4 Social Security Act,  1861(dd); 42 CFR part 418. 
5 OIG, Medicare Hospice Care for Beneficiaries in Nursing Facilities: Compliance With Medicare Coverage Requirements,  
OEI-02-06-00221, September 2009. 
6 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
7 42 CFR  418.302(b)(4). 
8 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
9 Ibid. 
10 Ibid. 
11 42 CFR  418.200. 
12 42 CFR  418.56(c)(2). 
13 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
14 OIG, Medicare Hospice Care for Beneficiaries In Nursing Facilities: Compliance with Medicare Coverage Requirements,  
OEI-02-06-00221, September 2009. 
15 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
16 OIG, Medicare Hospice: Use of General Inpatient Care, OEI-02-10-00490, May 2013.  Updated OIG analysis, August 2017. 
17 42 CFR  418.302(b). 
18 Social Security Act,  1861(dd)(1); 42 CFR  418.64, 418.108 and 418.204. 
19 42 CFR  418.304.  The daily rate paid to hospices covers general supervisory services and plan of care services by hospice 
physicians, not visits.   
20 42 CFR  418.302(b)(4). 
V ulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio  37 
OEI-02-16-00570   
 
21 Social Security Act,  1812(d)(2)(A) and 1861(dd)(1); 42 CFR  418.24(d).  CMS has developed the Medicare Care Choices Model, a 
demonstration program that will allow certain beneficiaries who are eligible for the hospice benefit but not enrolled to receive 
palliative care services from certain hospice providers while concurrently receiving services provided by their curative care 
providers.  The model will enable CMS to study whether access to such services improves quality of life, increases patient 
satisfaction, and reduces Medicare expenditures.  See CMS, Medicare Care Choice Model.  Accessed at 
https://innovation.cms.gov/initiatives/Medicare-Care-Choices/ on January 26, 2018. 
22 Department of Justice (DOJ), Cleveland Woman Sentenced for Hospice Fraud, December 14, 2015. Accessed at 
https://www.justice.gov/usao-ndms/pr/cleveland-woman-sentenced-hospice-fraud on August 28, 2017. 
23 DOJ, Minnesota-Based Hospice Provider to Pay $18 Million for Alleged False Claims to Medicare for Patients Who Were Not 
Terminally Ill, July 13, 2016.  Accessed at https://www.justice.gov/opa/pr/minnesota-based-hospice-provider-pay-18-million-
alleged-false-claims-medicare-patients-who on August 28, 2017. 
24 DOJ, Pasadena Doctor Sentenced to 4 Years in Prison for Falsely Certifying Patients Were Terminally Ill as Part of Healthcare 
Fraud Scheme, August 19, 2016.  Accessed at https://www.justice.gov/usao-cdca/pr/pasadena-doctor-sentenced-4-years-prison-
falsely-certifying-patients-were-terminally on December 20, 2017. 
25 Social Security Act  1814(i)(5). 
26 CMS, Public Reporting: Background and Announcements.  Accessed at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/Hospice-Quality-Reporting/Public-Reporting-Background-and-Announcements.html on March 22, 2018.  
See also, CMS, Current Measures.  Accessed at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/Hospice-Quality-Reporting/Current-Measures.html on March 21, 2018.  
27 42 CFR  401.133(a) and 401.130(b)(17). 
28 OIG, Hospices Should Improve Their Election Statements and Certifications of Terminal Illness, OEI-02-10-00492, September 2016.  
The election statements were collected for an OIG study that focused on general inpatient care, but these documents are for the 
hospice benefit as a whole and are not specific to any level of care. 
29 CMS, MLN Matters, Sample Hospice Election Statement, SE1631, December 13, 2016.  Accessed at 
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1631.pdf on 
January 3, 2018. 
30 OIG, Hospice of New York, LLC, Improperly Claimed Medicare Reimbursement for Some Hospice Services, A-02-13-01001, June 
2015; OIG, The Community Hospice, Inc., Improperly Claimed Medicare Reimbursement for Some Hospice Services, A-02-11-01016, 
September 2014; OIG, Servicios Suplementarios de Salud, Inc., Improperly Claimed Medicare Reimbursement for Some Hospice 
Services, A-02-11-01017, August 2014. 
31 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
32 These are the unadjusted daily payment rates for FY 2012.  CMS, MLN Matters, Update to Hospice Payment Rates, Hospice Cap, 
Hospice Wage Index, and the Hospice Pricer for FY 2012, Transmittal 2260, Change Request 7518, July 29, 2011.  Accessed at 
http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM7518.pdf on 
March 25, 2015. 
33 Ibid. 
34 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
35 Ibid. 
36 OIG, Hospice of New York, LLC, Improperly Claimed Medicare Reimbursement for Some Hospice Services, A-02-13-01001, June 
2015. 
37 OIG, Servicios Suplementarios de Salud, Inc., Improperly Claimed Medicare Reimbursement for Some Hospice Services,  
A-02-11-01017, August 2014. 
38 42 CFR 418.202 (f). Drugs that are unrelated to the beneficiarys terminal illness and related conditions may be covered under 
Part D. 
39 OIG, Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in Hospice, A-06-10-00059, June 2012.     
V ulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio  38 
OEI-02-16-00570   
 
40 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care, OEI-02-10-00491, March 2016. 
41 In recent guidance, CMS has encouraged Part D sponsors to place beneficiary-level prior authorization requirements on 
analgesic, antinausea, laxative, or antianxiety drugs for hospice beneficiaries because they are commonly used in hospice care and 
hospices are expected to provide them. See CMS, Part D Payment for Drugs for Beneficiaries Enrolled in Medicare Hospice," July 
18, 2014.  Accessed at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2014-PartD-
Hospice-Guidance-Revised-Memo.pdf on September 13, 2017. 
42 OIG, Questionable Billing for Physician Services for Hospice Beneficiaries, OEI-02-06-00224, September 2010. 
43 Some physician services provided to hospice beneficiaries may be billed through Part B if the physician is not a hospice 
employee or providing services under arrangements with the hospice.  If it is billed through Part B, the service should not also be 
billed through Part A. 
44 Social Security Act,  1812(a)(4) and 1814(a)(7)(A), 42 U.S.C  1395d(a)(4).  Beneficiaries who elect hospice care are entitled to 
receive care for two 90-day periods, followed by an unlimited number of 60-day periods.  Before 1990, hospice beneficiaries who 
were in hospice care for more than 210 days and still required such care were provided care by the hospice without charge to 
Medicare or the beneficiary. 
45 42 CFR  418.22(b).   
46 OIG, Hospices Should Improve Their Election Statements and Certifications of Terminal Illness, OEI-02-10-00492, September 2016.  
The certifications of terminal illness were collected for an OIG study that focused on general inpatient care, but these documents 
are for the hospice benefit as a whole and are not specific to any level of care. 
47 DOJ, Director of Lisle-Based Hospice Company Convicted in Scheme to Fraudulently Bill Medicare for Medically Unnecessary 
Services, March 9, 2016.  Accessed at https://www.justice.gov/usao-ndil/pr/director-lisle-based-hospice-company-convicted-
scheme-fraudulently-bill-medicare-0 on September 29, 2017.  
48 DOJ, Former Hospice Owner Sentenced for Health Care Fraud, February 1, 2012.  Accessed at 
https://www.justice.gov/archive/usao/aln/News/February%202012/February%201,%202012%20Hospice.html on September 7, 2017.  
49 DOJ, Greenwood Woman Sentenced for Millions in Hospice Fraud, December 19, 2014.  Accessed at 
https://www.justice.gov/usao-ndms/pr/greenwood-woman-sentenced-millions-hospice-fraud on October 13, 2017.  See also, DOJ, 
Delta Woman Sentenced in Connection with Hospice Fraud, February 13, 2015.  Accessed at https://www.justice.gov/usao-
ndms/pr/delta-woman-sentenced-connection-hospice-fraud on May 26, 2016. 
50 Medicare Payment Advisory Commission (MedPAC), Report to Congress: Medicare Payment Policy, March 2017, ch. 12, p. 320.  
Accessed at http://www.medpac.gov/docs/default-source/reports/mar17_entirereport.pdf?sfvrsn=0 on May 5, 2017. 
51 Some adjustments are made based on geography to account for differences in wage rates among markets.  42 CFR  418.306(c). 
52 Patient Protection and Affordable Care Act, P.L. 111-148  3132(a). 
53 80 Fed. Reg. 47141 (Aug. 6, 2015). 
54 OIG, Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities, OEI-02-14-00070, January 2015. 
55 OIG, Medicare Hospice Care: Services Provided to Beneficiaries Residing in Nursing Facilities, OEI-02-06-00223, September 2009. 
56 42 CFR  418.100(c)(2). 
57 OIG, Medicare Hospice: Use of General Inpatient Care, OEI-02-10-00490, May 2013. 
58 OIG, Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities, OEI-02-14-00070, January 2015. 
59 For beneficiarys time in hospice care from 2007 to 2012. 
60 The International Classification of Diseases, 9th Revision, Clinical Modification, categorizes several diagnoses as symptoms, 
signs, or ill-defined conditions.  This report referred to all diagnoses listed under symptoms, signs, or ill-defined conditions as 
ill-defined conditions. 
61 OIG, Medicare Hospices That Focus on Nursing Facility Residents, OEI-02-10-00070, July 2011. 
62 Ibid. 
Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio  39 
 
OEI-02-16-00570   
 
63 MedPAC, Hospice services, March 2017, ch. 12, p. 337.  Accessed at http://www.medpac.gov/docs/default-
source/reports/mar17_medpac_ch12.pdf?sfvrsn=0 on September 13, 2017. 
64 OIG, OIG Work Plan, 2017.  Accessed at https://oig.hhs.gov/reports-and-
publications/archives/workplan/2017/hhs%20oig%20work%20plan%202017.pdf on September 13, 2017.  
Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio  40 
OEI-02-16-00570   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public 
Law 95-452, 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: 
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by conducting audits with its own audit resources or by overseeing audit 
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