Department of Health and Human Services

OFFICE OF

INSPECTOR GENERAL

Suzanne Murrin

Deputy Inspector General for 

Evaluation and Inspections

September 2016

OEI-02-10-00492

HOSPICES SHOULD IMPROVE 

THEIR ELECTION STATEMENTS 

AND CERTIFICATIONS OF 

TERMINAL ILLNESS
 

Report in Brief

Date 

Report No. OEI-02-10-00492 

Hospices Should Improve Their Election 

Statements and Certifications of Terminal 

Illness

What OIG Found

We found that hospice election statements 

lacked required information or had other 

vulnerabilities in more than one-third of 

general inpatient care (GIP) stays. Notably, 

they did not always mention—as required—

that the beneficiary was waiving coverage of 

certain Medicare services by electing hospice 

care or that hospice care is palliative rather 

than curative. Further, in 14 percent of GIP 

stays, the physician did not meet 

requirements—such as composing a 

narrative—when certifying that the 

beneficiary was terminally ill and appeared to 

have limited involvement in determining that 

the beneficiary was appropriate for hospice 

care. 

What OIG Recommends and Agency 

Response 

The findings in this report make clear that 

hospices should improve their election statements and ensure that 

physicians meet requirements when certifying beneficiaries for 

hospice care. 

We recommend that the Centers for Medicare & Medicaid Services 

(CMS) (1) develop and disseminate model text for election 

statements, (2) instruct surveyors to strengthen their review of 

election statements and certifications of terminal illness, (3) 

educate hospices about election statements and certifications of 

terminal illness, and (4) provide guidance to hospices regarding the 

effects on beneficiaries when they revoke their election and when 

they are discharged from hospice care. 

CMS concurred with three of our recommendations and neither 

concurred nor nonconcurred with the fourth recommendation.

Why OIG Did This Review 

Medicare hospice care is intended to 

help terminally ill beneficiaries 

continue life with minimal 

disruptions and to support 

beneficiaries’ families. Two key 

requirements of the benefit are for 

the beneficiary to sign an election 

statement and for a physician to 

certify the beneficiary as terminally 

ill. These requirements provide 

critical safeguards to ensure that the 

beneficiary understands the benefit 

and that the physician is involved in 

determining whether the beneficiary 

is appropriate for hospice care. 

Previous OIG work has raised 

concerns that some election 

statements used by hospices are 

misleading and that physicians are 

sometimes not involved in care 

planning and may rarely see 

beneficiaries. Also, OIG has 

investigated numerous cases in which 

hospices submitted fraudulent claims 

for patients who were not 

appropriate for hospice care. 

How OIG Did This Review 

We based this study on a review of 

hospice election statements and 

certifications of terminal illness from 

a stratified random sample of hospice 

general inpatient (GIP) stays in 2012. 

Although the election statements and 

certifications of terminal illness were 

collected for a previous OIG study 

that focused on GIP, these 

documents are for the hospice 

benefit as a whole and are not 

specific to any one level of care. 

Key Takeaway 

It is important that hospices 

provide complete and accurate 

information in election 

statements so that beneficiaries 

and caregivers can make 

informed care choices. It is also 

critical that physicians fulfill 

their role and complete 

certifications of terminal illness 

as required. These certifications 

are an important safeguard in 

ensuring that beneficiaries are 

appropriately receiving hospice 

care. 

However, we identified 

concerns with election 

statements in more than onethird of hospice GIP stays and, 

in 14 percent of stays, the 

physician did not meet 

requirements when certifying. 

Full report can be found at http://oig.hhs.gov/oei/reports/oei-xx-xx-xxxxx.asp
 

TABLE OF CONTENTS

Objectives.................................................................................................... 1

Background ................................................................................................. 1

Methodology ............................................................................................... 5

Findings....................................................................................................... 7

In more than one-third of GIP stays, hospice election statements 

lacked required information or had other vulnerabilities................ 7

In many cases, hospices included information in election statements 

that is not required......................................................................... 10

In 14 percent of GIP stays, the physician did not meet 

requirements when certifying and appeared to have limited 

involvement in determining that the beneficiary was appropriate 

for hospice care ............................................................................. 11

Conclusion and Recommendations........................................................... 12

 Agency Comments and OIG Response ......................................... 15

Appendixes................................................................................................ 16

A: Levels of Care and Payment Rates.......................................... 16

B: Detailed Methodology ............................................................. 17

C: Statistical Estimates and Confidence Intervals........................ 19

D: Agency Comments .................................................................. 21

 

 

 Acknowledgments..................................................................................... 24
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 1

OBJECTIVES

1. To determine the extent to which hospice election statements lack 

required information or have other vulnerabilities.

2. To determine the extent to which physicians meet requirements when 

certifying beneficiaries for hospice care.

BACKGROUND

The goals of hospice care are to help terminally ill beneficiaries continue 

life with minimal disruption and to support their families and other 

caregivers. In 2013, Medicare paid $15.1 billion for hospice care for 

1.3 million beneficiaries.1

Two key requirements of the Medicare hospice benefit are for the 

beneficiary to elect hospice care and for a physician to certify that the 

beneficiary is terminally ill. When electing hospice care, the beneficiary 

signs an election statement that is written by the hospice. The election 

statement is intended to ensure that the beneficiary understands the hospice 

benefit—particularly that hospice care is palliative, not curative—and that 

the beneficiary waives the right to Medicare payment for treatment of the 

terminal illness except for services provided by the hospice.2 At the 

beginning of care and at set intervals thereafter, a physician completes 

a certification of terminal illness, which is intended to ensure that the 

physician is involved in determining whether the beneficiary is appropriate 

for hospice care. 

Previous OIG work has raised concerns that some election statements used 

by hospices are misleading and that physicians are sometimes not involved 

in care planning and may rarely visit beneficiaries.3 In addition, OIG has 

investigated a number of recent hospice fraud cases that illustrate the need 

to focus on program integrity. For example, in one case, the owner of a 

hospice in Mississippi used patient recruiters and submitted fraudulent 

 

1

 Medicare Payment Advisory Commission (MedPAC), Report to Congress: Medicare 

Payment Policy, March 2015, ch. 12, p. 285. Accessed at http://medpac.gov/documents/ 

reports/mar2015_entirereport_revised.pdf?sfvrsn=0 on May 11, 2015. 

2

 42 CFR § 418.24. Services may be made under arrangements by the hospice or provided 

by the beneficiary’s attending physician.

3

 For concerns about election statements, see OIG, Medicare Hospice Care for 

Beneficiaries in Nursing Facilities: Compliance With Medicare Coverage Requirements

(OEI-02-06-000221), September 2009. For concerns about physician involvement see 

OIG, Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living 

Facilities (OEI-02-14-00070), January 2015; and OIG, Hospices Inappropriately Billed 

Medicare Over $250 Million for General Inpatient Care (OEI-02-10-00491), March 2016. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 2

claims to Medicare for patients who were not appropriate for 

hospice. According to investigators, these beneficiaries had no idea they 

were in hospice care. The owner was sentenced to 3 years in prison and 

ordered to pay $1.1 million in restitution to Medicare.4

In another case, a hospice in Philadelphia submitted false claims to 

Medicare and altered patient records to make patients appear to be eligible 

for hospice services when they were not. To increase enrollment, the 

hospice owner also paid health care professionals for referring patients to 

his hospice even though they were not appropriate for hospice care. The 

owner was found guilty of health care fraud and sentenced to more than 

14 years in prison and ordered to pay $16.2 million in restitution to 

Medicare.5

Also in Pennsylvania, a hospice’s former chief operating officer admitted 

that she caused her staff to put patients in hospice care who were not 

appropriate for the benefit. She faces a possible 10-year sentence for health 

care fraud.6

These cases demonstrate the importance of having key safeguards in place 

that keep beneficiaries well informed and help ensure that the hospice care 

provided to beneficiaries is appropriate. 

The Medicare Hospice Benefit

To be eligible for Medicare hospice care, a beneficiary must be entitled to 

Part A of Medicare and be certified as having a terminal illness with a life 

expectancy of 6 months or less if the disease runs its normal course.7 Upon 

a beneficiary’s election of hospice care, the hospice agency is responsible 

for medical care related to the beneficiary’s terminal illness and related 

conditions. Beneficiaries who elect hospice care are entitled to receive care 

for two 90-day periods, followed by an unlimited number of 60-day 

 

4 Department of Justice (DOJ), “Cleveland Woman Sentenced for Hospice Fraud,” 

December 4, 2015. Accessed at https://www.justice.gov/usao-ndms/pr/cleveland-womansentenced-hospice-fraud on June 17, 2016. 

5 DOJ, “Hospice Owner Sentenced To More Than 14 Years For Health Care Fraud 

Scheme,” May 27, 2014. Accessed at https://www.justice.gov/usao-edpa/pr/hospiceowner-sentenced-more-14-years-health-care-fraud-scheme on June 17, 2016.

6 DOJ, “Former Horizons Hospice Chief Operating Officer Pleads Guilty to Health Care 

Fraud,” June 2, 2016. Accessed at https://www.justice.gov/usao-wdpa/pr/formerhorizons-hospice-chief-operating-officer-pleads-guilty-health-care-fraud on June 17, 2016. 

7

 Social Security Act, §§ 1814(a)(7)(A) and 1861(dd)(3)(A), 42 U.S.C. §§ 1395f(a)(7)(A) 

and 1395x(dd)(3)(A); 42 CFR §§ 418.20 and 418.22. Certification is based on the 

physician’s or medical director’s clinical judgment regarding the normal course of the 

individual’s illness. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 3

periods.8 These periods are known as “election periods” and need not be 

consecutive.

Hospice care includes nursing care, medical social services, medical 

supplies (including drugs and biologicals), and physician services, among 

other things. By electing hospice care, the beneficiary waives all rights to 

Medicare payment for services related to the treatment of the terminal 

illness and related conditions except for services provided by or arranged 

for by the hospice. The beneficiary retains rights to Medicare payment for 

services to treat conditions unrelated to the terminal illness.9

The Medicare hospice benefit has four levels of care, which are paid at 

different rates. The levels are routine home care, general inpatient care 

(GIP), continuous home care, and inpatient respite care.10 GIP is the second 

most expensive and, next to routine home care, is the most commonly used. 

GIP is provided in a hospice inpatient unit, a hospital, or a skilled nursing 

facility for symptom management or pain control that cannot be managed 

in other settings.11

 See Appendix A for descriptions of the levels of care 

and payment rates. 

Election of Hospice Care

A beneficiary choosing Medicare hospice care must file an election 

statement with a hospice. This statement is designed by the hospice and 

signed by the beneficiary. Regulations require that the election statement 

include information on key features of the hospice benefit. Specifically, the 

election statement must include acknowledgments that the beneficiary 

(1) has been given a full understanding of the palliative rather than curative 

nature of hospice care and (2) is waiving all rights to Medicare payment for 

certain services—such as treatment of the terminal illness and related 

conditions—when not provided by or arranged for by the beneficiary’s 

designated hospice.12

 

8

 Social Security Act, § 1812(a)(4), 42 U.S.C. § 1395d(a)(4). Prior to 1990, Medicare 

provided hospice coverage for a maximum of 210 days. 

9

 Social Security Act, §§ 1812(d)(2)(A) and 1861(dd)(1), 42 U.S.C. §§ 1395d(d)(2)(A) 

and 1395x(dd)(1); 42 CFR § 418.24(d). CMS has developed the Medicare Care Choices 

Model, a demonstration program that will allow certain beneficiaries 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 

http://innovation.cms.gov/initiatives/Medicare-Care-Choices/ on January 26, 2016. 

10 42 CFR § 418.302. 

11 42 CFR §§ 418.108(a) and 418.302(b)(4). 

12 42 CFR § 418.24(b) and (d). Other requirements include the identification of the 

hospice, the effective date of election, and the signature of the individual or representative. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 4

A beneficiary may revoke his or her election of hospice care and return to 

standard Medicare coverage at any time. To do so, the beneficiary must 

provide the hospice with a signed statement.13

A hospice may discharge a beneficiary if the beneficiary moves out of the 

hospice’s service area, transfers to another hospice, or is no longer 

terminally ill. A hospice can also discharge a beneficiary for cause.14

Certification of Terminal Illness

At the beginning of each election period, at least one physician must certify 

that the beneficiary is terminally ill with a life expectancy of 6 months or 

less.15 The certification of terminal illness must be based on the physician’s 

clinical judgment regarding the normal course of the beneficiary’s illness 

and must be supported by clinical information in the medical record. 

The physician must include a narrative in the certification that explains the 

clinical findings. It must reflect the beneficiary’s individual clinical 

circumstances and cannot include checkboxes or standard language used 

for all patients.16 The narrative must include an attestation confirming that 

the physician wrote the narrative based on either an examination of the 

patient or a review of the clinical record.17 For the third and subsequent 

periods, the beneficiary must be examined face-to-face by either 

a physician or a nurse practitioner.18 

CMS Oversight 

Hospices must be certified to participate in the Medicare program.19 In 

2013, there were 3,925 Medicare hospices. Of these, 2,411 were for-profit, 

1,314 were nonprofit, and 200 were government-owned.20

 

13 Social Security Act, § 1812(d)(2)(B), 42 U.S.C. § 1395d(d)(2)(B); 42 CFR § 418.28. 

14 A hospice can discharge a beneficiary for cause if a beneficiary’s behavior is disruptive, 

abusive, or uncooperative to the extent that delivery of care to the beneficiary or the ability 

of the hospice to operate effectively is seriously impaired. See 42 CFR § 418.26(a). 

15 The initial certification must be done by the medical director of the hospice or the 

physician member of the hospice interdisciplinary group and the beneficiary’s attending 

physician, if the beneficiary has one. Subsequent certifications can be done by one 

physician. See 42 CFR § 418.22(c). The attending physician is a physician or nurse 

practitioner identified by the beneficiary as having the most significant role in the 

beneficiary’s medical care. See 42 CFR § 418.3. 

16 42 CFR § 418.22(b)(3)(iv). 

17 42 CFR § 418.22(b)(3)(iii). 

18 42 CFR § 418.22(a)(4). 

19 Social Security Act, §§ 1814(a) and 1866, 42 U.S.C. §§ 1395f(a) and 1395cc. 

20 Medicare Payment Advisory Commission (MedPAC), Report to Congress: Medicare 

Payment Policy, March 2015, ch. 12, p. 296. Accessed at 

http://medpac.gov/documents/reports/mar2015_entirereport_revised.pdf?sfvrsn=0 on 

May 11, 2015. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 5

CMS contracts with State survey and certification agencies to conduct 

onsite surveys of hospices at the time of initial hospice certification, for 

recertification, and in response to complaints. These surveys determine 

whether the hospice meets Medicare requirements.

21

 Surveyors review a 

sample of beneficiaries’ records during this process, including the election 

statements and certifications of terminal illness.22 Surveyors must cite 

deficiencies when hospices fail to meet requirements. 

Related Work 

This report is part of a larger body of OIG work examining the delivery of 

hospice care to Medicare beneficiaries. A recent OIG report found that 

hospices billed one-third of GIP stays inappropriately, costing Medicare 

$268 million in 2012.23 Hospices sometimes provided poor-quality care 

and often did not provide intense services. Another OIG report found that 

hospices typically provided fewer than 5 hours of visits per week and were 

paid about $1,100 per week for each beneficiary receiving routine home 

care in assisted living facilities.24 It also found that hospice physicians 

rarely saw beneficiaries who received care in assisted living facilities. 

METHODOLOGY

We based this study on a review of hospice election statements and 

certifications of terminal illness from a stratified random sample of 

565 GIP stays in 2012. The sample was selected for another OIG study, 

which focused on the use of GIP.25 However, the election statements and 

certifications of terminal illness that hospices use are for the hospice 

benefit as a whole and are not specific to any one level of care.

We reviewed the election statements for key required features, such as 

information about the palliative nature of hospice care and the waiver of 

coverage for certain services. We also noted when statements contained 

inaccurate information and when they contained information beyond what 

is required. We reviewed the certifications of terminal illness for key 

information, focusing on the physician narratives and attestations.

 

21 National accreditation organizations may perform the certification and recertification 

process for some hospices in accordance with section 1865 of the Social Security Act. 

22 CMS, State Operations Manual, Appendix M - Guidance to Surveyors: Hospice, 

Accessed at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/ 

Downloads/som107ap_m_hospice.pdf on June 19, 2015. 

23 OIG, Hospices Inappropriately Billed Medicare Over $250 Million for General 

Inpatient Care (OEI-02-10-00491), March 2016. 

24 OIG, Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living 

Facilities (OEI-02-14-00070), January 2015. 

25 OIG, Hospice Inappropriately Billed Medicare Over $250 Million for General Inpatient 

Care (OEI-02-10-00491), March 2016. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 6

See Appendix B for more detailed information about the methodology. See 

Appendix C for all statistical estimates and 95-percent confidence intervals. 

Limitations

For this study, we reviewed the content of hospice election statements and 

certifications of terminal illness. We did not independently verify the 

beneficiary’s prognosis for a life expectancy of 6 months or less.

Standards

This study was conducted in accordance with the Quality Standards for 

Inspection and Evaluation issued by the Council of the Inspectors General 

on Integrity and Efficiency.
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 7

FINDINGS

In more than one-third of GIP stays, hospice election 

statements lacked required information or had other 

vulnerabilities

Before receiving hospice care, a beneficiary signs an election statement that 

has been written by the hospice. Complete and accurate election statements 

are an important safeguard to ensure that beneficiaries and their caregivers 

can make informed decisions about their care and understand what they are 

getting and what they are giving up when they elect hospice care. However, 

in 35 percent of GIP stays, hospices used election statements that were 

missing required information or had other vulnerabilities. See Table 1.

In 19 percent of GIP stays, the election statements did not specify that the 

hospice benefit that the beneficiary was electing was Medicare hospice. 

These statements either referred to Medicaid hospice or referred to another 

hospice benefit in addition to Medicare, such as private health insurance, and 

did not indicate which hospice benefit the beneficiary was electing. 

Statements that do not make clear that the election is for Medicare hospice 

care are depriving beneficiaries of critical information. 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 in Medicare, and private health insurance may cover 

hospice care very differently than Medicare. 

In 12 percent of stays, the election statements did not mention—as 

required—that the beneficiary was waiving coverage of certain Medicare 

services by electing hospice care, or inaccurately stated what Medicare 

benefits were waived. For example, some election statements stated that the 

beneficiary waived the right to all other benefits under the Medicare program 

while receiving hospice benefits. This is not accurate. A beneficiary who 

Table 1: Percentage of GIP Stays With Election Statements That Lacked

Required Information or Had Other Vulnerabilities

Vulnerability With Election Statement * Percentage of GIP Stays 

Did not specify Medicare 19%

Required waiver information was missing or was stated inaccurately 12%

Required information about palliative care was missing 9%

Revocation or discharge information was inaccurate or unclear 4%

*Categories are not mutually exclusive.

Source: OIG analysis of election statements, 2015.
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 8

elects hospice care retains rights to Medicare payment for services to treat 

conditions unrelated to the terminal illness. 

In 9 percent of stays, the election statements did not state—as required—that 

hospice care is palliative, rather than curative. Palliative care means patientand family-centered care that optimizes the quality of life by anticipating, 

preventing, and treating suffering.26 Election statements must include the 

beneficiary’s acknowledgment that he or she has been given a full 

understanding of this type of care.

In 4 percent of stays, the election statements included inaccurate or unclear 

information about how a beneficiary may revoke the election of hospice care 

or how the hospice may discharge a beneficiary. See the example of such a 

statement in the box on the following page. Information on revocation and 

discharge is not a required feature of election statements, but hospices may 

include such information. Beneficiaries who are given inaccurate or unclear 

information may not understand their rights and might be at a disadvantage if 

disagreements arise with their hospices. 

In addition, hospices provided inconsistent information about the effect of 

revocation and discharge on the beneficiary. While some election statements 

explained that both revocation and discharge result in the beneficiary's losing 

the remaining days in the election period, others said this only about 

revocation. Also, many election statements did not say when a beneficiary 

who is eligible can again elect the hospice benefit after revocation or 

discharge. 

Hospices’ inconsistencies in their election statements may stem from the 

way revocation and discharge are discussed in statute, regulations, and the 

CMS manual. The three sources note that upon revocation, a beneficiary is 

no longer covered under the Medicare hospice benefit for the remainder of 

the election period. 27 They also mention that the beneficiary may elect to 

receive hospice coverage in another election period. 28 However, it is unclear 

 

26 42 CFR § 418.3. 

27 Social Security Act, § 1812(d)(2)(B)(i), 42 U.S.C. § 1395d(d)(2)(B)(i); 42 CFR 

§ 418.28(c)(1); CMS, Medicare Benefit Policy Manual, ch. 9, § 20.2.2 (Rev. 209, effective 

10/1/14). 

28 Social Security Act, § 1812(d)(2)(B)(ii), 42 U.S.C. § 1395d(d)(2)(B)(ii); 42 CFR 

§§ 418.24(e) and 418.28(c)(3); CMS, Medicare Benefit Policy Manual, ch. 9, § 20.2.2 

(Rev. 209, effective 10/1/14). 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 9

whether the beneficiary can start a subsequent election period immediately or 

only after the remaining days of the election period have passed. 29

 

In addition, the regulations and manual discuss discharge differently. The 

manual explicitly states that upon discharge, the beneficiary loses the 

remaining days in the election period; the regulations do not address whether 

the beneficiary loses the remaining days in the election period.30 As with 

revocation, it is unclear when a beneficiary can again obtain hospice 

coverage after discharge. The regulations and manual do not clarify whether 

the beneficiary can reelect hospice immediately or only once the remaining 

days in the current election period have passed. 

Some election statements had other features that might confuse beneficiaries. 

For instance, some hospices included the election statement within a much 

longer and more complex document or labeled the election statement 

something other than “election,” such as “Admission Service Agreement” or 

“Financial Agreement.” Other hospices used small print for the text 

explaining the palliative nature of hospice care, which may make it difficult 

for some beneficiaries and caregivers to read.

 

29 Election periods are a set number of days consistently defined as two initial periods of 

90 days each and an unlimited number of subsequent periods of 60 days each. Social 

Security Act, §§ 1812(a)(4) and 1812(d)(1), 42 U.S.C. §§ 1395d(a)(4) and 1395d(d)(1); 

42 CFR § 418.21; and CMS, Medicare Benefit Policy Manual, ch. 9, § 10 (Rev. 188, 

effective 8/4/14). 

30 42 § CFR 418.26(c); CMS, Medicare Benefit Policy Manual, ch. 9, § 20.2.3 (Rev. 209, 

effective 10/1/14). The Social Security Act does not mention discharge at all. 

31 42 CFR §§ 418.28(b). 

32 42 CFR § 418.26(a)(3). 

Example of Inaccurate Information Contained in Election Statements

“If I choose care or treatment that has not been preauthorized by the hospice 

team or included in the plan, I understand that I have removed myself from the 

hospice benefit effective immediately.”

 Contrary to this statement, a beneficiary does not revoke the hospice 

election or get automatically discharged simply by choosing care without 

authorization. To revoke the election, the beneficiary must provide the 

hospice with a signed statement. 31 A hospice may discharge a beneficiary 

if the beneficiary moves out of the service area or transfers to another 

hospice, if the hospice determines that the beneficiary is no longer 

terminally ill, or for cause. To discharge a beneficiary for cause, the 

hospice must follow a number of steps, including informing the 

beneficiary that he or she might be discharged and making a serious effort 

to resolve the problem. 32
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 10

In many cases, hospices included information in 

election statements that is not required 

Although they are not required to do so, many hospices added detailed 

information to their election statements that explained key parts of the 

hospice benefit. For example, information about potential costs to the 

beneficiary—such as coinsurance payments for drugs or for the inpatient 

respite level of care—was included in the election statements for 

approximately two-thirds of GIP stays. 

Information about the lengths of hospice election periods was included in the 

election statements for almost two-thirds of GIP stays. In addition, election 

statements for almost half of GIP stays noted that the beneficiary can change 

hospice providers, although not all of the statements explained that it could 

be done just once per election period. Some statements included other 

information, such as the levels of hospice care available and specific services 

that the hospice provides, such as nursing and hospice aide services. 

Election statements for almost a third of stays noted that hospice services 

were available 24 hours a day, 7 days a week. This may be especially 

important because previous OIG work found that hospices often provided far 

fewer services on weekends than on weekdays, and beneficiaries and their 

caregivers may not know that hospices are required to make needed services 

available on a 24-hour basis.33 A few statements also included a 24-hour 

phone number to call with any questions. See Figure 1. 

Figure 1: Percentage of GIP Stays with Election Statements That Contained 

Selected Additional Information 

 

67%

64%

48%

48%

42%

31%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Potential costs to beneficiaries

Benefit periods

Ability to change hospice

Levels of hospice care

Services provided

Availability of services 24/7

Source: OIG analysis of election statements, 2015. 

 

33 OIG, Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living 

Facilities (OEI-02-14-00070), January 2015. See also 42 CFR § 418.100(c)(2). 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 11

Other features that were not as commonly found, but may be helpful, 

included text in large print sizes; instructions directing the beneficiary or 

representative to initial the sections of the statement that contain important 

facts about the benefit; contact information for Medicare; and information 

on how to make a complaint. 

In 14 percent of GIP stays, the physician did not meet 

requirements when certifying and appeared to have 

limited involvement in determining that the beneficiary 

was appropriate for hospice care 

To be eligible for hospice care, a beneficiary must be certified as terminally 

ill with a life expectancy of 6 months or less. This is done by a physician for 

every election period and is based on the physician’s clinical judgment.34

 

Certifying physicians are required to compose a narrative and include an 

attestation in each certification of terminal illness. These requirements help 

to ensure that physicians are involved in determining that the beneficiary has 

a life expectancy of 6 months or less and is appropriate for hospice care. 

However, in 14 percent of GIP stays, the certifying physician did not meet at 

least one of these requirements. Specifically, in 10 percent of stays, the 

certifying physician did not include a narrative at all or included only the 

beneficiary’s diagnosis. This means that the certifying physician did not 

explain the clinical findings that support a life expectancy for the beneficiary 

of 6 months or less. In one example, the physician merely wrote, “resp. 

failure dying.” This is in sharp contrast to other narratives that provided 

details about the beneficiary’s condition, such as the beneficiary’s activities 

of daily living, weight loss, moods, body mass index, and changes in scores 

on the palliative performance scale.

In 5 percent of GIP stays, the certifying physician did not include an 

attestation.35 That is, the physician did not attest that the narrative was based 

on his or her examination of the beneficiary or review of the medical records. 

Composing a narrative and attesting that the narrative was based on an 

examination or record review are important safeguards to ensure that 

certifying physicians fulfill their role and demonstrate active involvement in 

the certifying process. 

 

34 42 CFR § 418.22(b). 

35 Some election statements lacked both a narrative and an attestation. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 12

CONCLUSION AND RECOMMENDATIONS

This report looks at two key coverage requirements for the Medicare 

hospice benefit: election statements and certifications of terminal illness. 

It is part of a larger body of work that has revealed numerous 

vulnerabilities and raised serious questions about how the benefit is 

administered, such as whether Medicare is paying appropriately for hospice 

care and whether beneficiaries are receiving the services they need in their 

last months of life. These questions highlight both the need to protect the 

integrity of the hospice benefit and the need to protect beneficiaries.

The findings in this report make clear that hospices should improve their 

election statements and ensure that physicians meet requirements when 

certifying beneficiaries for hospice care. In 35 percent of GIP stays, 

hospices’ election statements lacked required information or had other 

vulnerabilities. It is essential that hospices provide beneficiaries and their 

caregivers with accurate and complete information, especially about the 

palliative nature of hospice care and the benefits they are waiving. This is 

critical to ensuring that beneficiaries and their caregivers make informed care 

choices, especially because beneficiaries who elect hospice care are—in 

essence—turning over all care for their terminal illness to the hospice. 

In 14 percent of GIP stays, the certifying physician did not meet 

requirements and appeared to have limited involvement in determining that 

the beneficiary was appropriate for hospice care. It is essential that 

physicians fulfill their role and complete certifications as required, as these 

certifications are a critical safeguard in ensuring that beneficiaries are 

appropriately receiving hospice care.

We recommend that CMS: 

Develop and disseminate model text for election statements 

CMS should develop model text that hospices could use in crafting their 

election statements. This might be done through CMS contractors, such as 

the Medicare Administrative Contractors that oversee the hospice benefit. 

Model text will help ensure that hospice election statements are clear and 

complete and that they contain accurate information about the Medicare 

hospice benefit. 

The model text should clearly identify the benefit as Medicare, as we found 

numerous instances in which the election statement does not. Medicare can 

have different rules than other payers, so it is important for beneficiaries to 

know that Medicare, as opposed to other payers, is covering their care. This 

is a fundamental program integrity safeguard. The statement must clearly 

communicate to beneficiaries and their families which program is paying for 

beneficiaries’ care, especially so that they know which program to contact if 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 13

they experience problems with the hospice or have any questions about 

which services they are entitled to receive.

The model text should also accurately explain what the beneficiary is 

waiving and describe the palliative nature of hospice care. In addition, the 

model text should include helpful information about the hospice benefit, so 

that hospices can choose to add this information to their election statements. 

Specifically, the model text should include information about services being 

available 24 hours a day, an explanation of services included in the benefit, 

and contact information for the hospice.

Instruct surveyors to strengthen their review of election 

statements and certifications of terminal illness

CMS should instruct surveyors to—as a part of the survey and certification 

process—increase their attention to the requirements for election statements. 

Surveyors should determine whether election statements contain all the 

required information and that this information is accurate. If not, surveyors 

should cite deficiencies. Likewise, surveyors should strengthen their review 

of certifications of terminal illness to ensure that certifying physicians are 

meeting the requirements. Surveyors should cite deficiencies when they find 

certifications that are not complete. Surveyors should strengthen their 

reviews of all hospices but should particularly focus on the hospices we 

found to have election statements that lacked required information or had 

other vulnerabilities and on the hospices that had certifications for which the 

physician did not meet requirements. We will provide a list of these hospices 

to CMS in a separate memorandum. 

Educate hospices about election statements and certifications 

of terminal illness

CMS should provide training to hospice providers about the requirements for 

election statements. The model text that we recommend be developed could 

serve as a basis for part of this training. The training should reiterate the 

requirements and ensure that hospices are reviewing and revising their 

election statements as appropriate. CMS should also provide training to 

hospices about the requirements for certifications of terminal illness. In 

addition, CMS should work with hospices to educate physicians about their 

responsibilities in determining and documenting their clinical findings for 

certifying terminal illness, given the important role that certifying physicians 

play in ensuring the appropriate use of hospice care. As part of this effort, 

CMS could develop educational materials that hospices can share with 

physicians. CMS should educate all hospices but should particularly focus 

on the hospices we found to have election statements that lacked required 

information or had other vulnerabilities and on the hospices that had 

certifications for which the physician did not meet requirements. We will 

provide a list of these hospices to CMS in a separate memorandum. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 14

Provide guidance to hospices regarding the effects on 

beneficiaries when they revoke their election and when they are 

discharged from hospice care 

CMS should provide guidance to hospices that clarifies the effects of 

revocation and discharge on the beneficiary. This guidance should explicitly 

address (1) whether remaining days of the election period are lost and 

(2) when, after revocation or discharge, a new election period can begin for 

beneficiaries who are eligible. Hospices should have a clear understanding 

of the effects of revocation and discharge so that they can consistently 

implement policies and accurately inform beneficiaries. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 15

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE

CMS concurred with three of our recommendations and neither concurred 

nor nonconcurred with the fourth recommendation. 

CMS concurred with our first recommendation to develop and disseminate 

model text for election statements. CMS stated that it will develop model 

text that satisfies the regulatory requirements, which could be used by 

hospices when designing their own election statements. 

CMS concurred with our second recommendation to instruct surveyors to 

strengthen their review of election statements and certifications of terminal 

illness. CMS stated that it will revise the Basic Hospice Training provided 

to surveyors to place appropriate emphasis on election statements and 

certifications of terminal illness. CMS will also include these topics during 

yearly training and webinars with surveyors. 

CMS concurred with our third recommendation to educate hospices about 

election statements and certifications of terminal illness. CMS stated that, 

together with the Medicare Administrative Contractors, it will work to 

issue guidance to providers on election statements and certifications of 

terminal illness. CMS will also continue to use the Medicare Learning 

Network, weekly electronic newsletters and quarterly compliance 

newsletters to educate providers on avoiding common errors. 

CMS neither concurred nor nonconcurred with our fourth recommendation 

to provide guidance to hospices regarding the effects on beneficiaries when 

they revoke their election and when they are discharged from hospice care. 

CMS stated that it will monitor patient revocations and discharges and 

provide additional guidance to hospices, if needed. OIG reiterates the need 

for clearer guidance regarding the effects of revocation and discharge, as 

hospices have provided inconsistent information about the effect of 

revocation and discharge on the beneficiary. The statute, regulations, and 

the CMS manual note that upon revocation, a beneficiary is no longer 

covered under the Medicare hospice benefit for the remainder of the 

election period. They also mention that the beneficiary may elect to 

receive hospice coverage in another election period. However, it is unclear 

whether the beneficiary can start a subsequent election period immediately 

or only after the remaining days of the election period have passed. 

Similarly, it is unclear when a beneficiary can again obtain hospice 

coverage after discharge. The regulations and CMS manual do not clarify 

whether the beneficiary can reelect hospice immediately or only once the 

remaining days in the current election period have passed. 

For the full text of CMS’s comments, see Appendix D.
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 16

APPENDIX A

Levels of Care and Payment Rates 

The Medicare hospice benefit has four levels of care: routine home care, 

general inpatient care (GIP), continuous home care, and inpatient respite 

care. Routine home care is the most commonly used, followed by GIP. 

GIP is provided in a hospice inpatient unit, a hospital, or a skilled nursing 

facility.36 It is for pain control or symptom management that cannot be 

managed in other settings, such as the beneficiary’s home.37 Continuous 

home care is allowed only during brief periods of crisis and only as 

necessary to maintain the individual at home.38 Inpatient respite care is 

short-term inpatient care provided to the beneficiary when necessary to 

relieve the beneficiary’s caregiver.39

Medicare pays hospices a daily rate from the day a beneficiary elects 

hospice care to the day of discharge. Each level of hospice care has an 

all-inclusive daily rate that is paid through Part A.40 The daily rate is paid 

to the hospice for each day that a beneficiary is in hospice care, regardless 

of the amount of services furnished on a particular day. The rates are 

adjusted on the basis of the beneficiary’s geographic location. See 

Table A-1 for the unadjusted payment rates for each level of care in fiscal 

year (FY) 2015. Beneficiaries generally do not pay coinsurance for 

hospice care.41

Table A-1: Unadjusted Daily Medicare Hospice Payment 

Rates by Level of Care, FY 2015

Routine Home Care $159.34 

Continuous Home Care $929.91 

General Inpatient Care $708.77 

Inpatient Respite Care $164.81 

Source: CMS, Update to Hospice Payment Rates, Hospice Cap, Hospice Wage Index, 

Quality Reporting Program and the Hospice Pricer for FY 2015, Transmittal R3023CP, 

Change Request 8876, October 1, 2014. 

 

36 42 CFR § 418.108(a). 

37 42 CFR § 418.302(b)(4). 

38 42 CFR § 418.302(b)(2); 42 CFR § 418.204(a)(defining “periods of crisis”); and CMS, 

Medicare Claims Processing Manual, Pub. 100-04, ch. 11, § 30.1. 

39 42 CFR § 418.302(b)(3). 

40 For continuous home care, the hospice is paid an hourly rate based on the number of 

hours of continuous care furnished to the beneficiary on that day. The daily continuous 

home care rate is divided by 24 hours to determine an hourly rate. A minimum of 8 hours 

of predominantly nursing care must be provided. CMS, Medicare Claims Processing 

Manual, Pub. 100-04, ch. 11, § 30.1. 

41 Hospices may charge beneficiaries a 5-percent coinsurance for inpatient respite care. 

Hospices also may charge beneficiaries a coinsurance payment, not exceeding $5, for each 

palliative drug and biological prescription. See 42 CFR § 418.400. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 17

APPENDIX B

Detailed Methodology

Selection of Statistical Sample

We based this study on a review of election statements and certifications of 

terminal illness from a stratified random sample of GIP stays. The sample 

was selected for another OIG study, which focused on the use of GIP. 42 As 

part of that study, we collected the election statements and certifications of 

terminal illness for the beneficiary in each stay. 

To select the sample of GIP stays, we performed the following steps. Using 

CMS’s National Claims History file, we extracted all Medicare Part A 

hospice claims that had service dates in 2012 and were received through 

December 2012. Each claim included information about the level of 

hospice care, such as GIP, and the setting, such as a SNF. We combined the 

claims to identify all GIP stays. We considered a GIP stay to be one or 

more claims for GIP for the same beneficiary in the same setting, from the 

same hospice, for which the claims represented consecutive periods. We 

considered the periods to be consecutive if the first claim’s ending date was 

either the same day as or the day before the starting date of the subsequent 

claim, and so on. We identified 282,225 GIP stays in 2012 for 

252,759 beneficiaries. 

We selected a stratified simple random sample of 570 GIP stays from this 

file. We did not contact the hospices that billed for five of the stays in our 

sample because these hospices were under investigation by OIG. Our final 

sample included 565 stays. 

We used a contractor to collect the election statements and all certifications 

of terminal illness associated with each sampled stay. We had response 

rates of 100 percent for election statements and 99 percent for certifications 

of terminal illness. 

Review of Election Statements and Certifications of Terminal 

Illness 

For each GIP stay, we used a standardized instrument based on Medicare 

coverage requirements and CMS guidance to review the beneficiary’s 

election statement and certifications of terminal illness.

Election Statements. We reviewed the election statements to determine the 

extent to which they lacked required information or had other 

vulnerabilities. Specifically, we determined whether the statement 

specified that the election was for the Medicare hospice benefit; included 

 

42 For a detailed description of the sample see OIG, Hospice Inappropriately Billed 

Medicare Over $250 Million for General Inpatient Care (OEI-02-10-00491), March 2016. 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 18

the information that the beneficiary waives certain Medicare services by 

electing hospice care; and included information about the palliative rather 

than curative nature of hospice care, as it related to the individual’s 

terminal illness. We also reviewed information in the statements about 

revocation and discharge. We further noted whether the hospice included 

any additional information in the election statements, such as the potential 

costs to beneficiaries, the length of Medicare hospice election periods, the 

levels of hospice care, and the services the hospice provides. 

Certifications of Terminal Illness. We reviewed the certifications to 

determine the extent to which the physician met requirements that 

demonstrate involvement in the certification process. Specifically, we 

determined whether a physician signed the document; whether it stated that 

the beneficiary’s prognosis was for a life expectancy of 6 months or less if 

the terminal illness were to run its normal course, if it contained a narrative 

and, if so, whether the narrative reflected the beneficiary’s clinical 

circumstances. We also determined whether the certifying physician 

attested to basing the narrative on a review of the beneficiary’s medical 

record and/or an examination of the beneficiary. 

Analysis

We analyzed the results of the reviews of election statements to estimate 

the percentage of GIP stays for which the election statement lacked the 

required information or had other vulnerabilities. We estimated the 

percentage of GIP stays for which the election statement included 

additional information that was beyond what was required. We also 

analyzed the results of the reviews of the certifications to estimate the 

percentage of GIP stays for which the physician did not meet requirements 

when certifying and appeared to have limited involvement in determining 

that the beneficiary was appropriate for hospice care.
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 19

APPENDIX C

Statistical Estimates and Confidence Intervals 

Sample Sizes, Point Estimates, and Confidence Intervals

Estimate Characteristic

Sample 

Size

Point 

Estimate

95-Percent Confidence Interval

Lower Limit Upper Limit

Election Statements

Percentage of GIP stays for which the hospice election statement 

lacked required information or had other vulnerabilities

563 34.9% 30.0% 40.2%

Percentage of GIP stays for which the election statement did not 

specify that the hospice benefit that the beneficiary was electing was 

Medicare hospice 563 19.4% 15.5% 23.9%

Percentage of GIP stays for which the election statement did not 

mention that the beneficiary was waiving coverage of certain 

Medicare services by electing hospice care, or inaccurately stated 

what Medicare benefits were waived 563 11.6% 8.4% 15.8%

Percentage of GIP stays for which the election statement did not state 

that hospice care is palliative rather than curative

563 9.5%1 6.7% 13.2%

Percentage of GIP stays for which the election statement included 

inaccurate or unclear information about how a beneficiary may revoke 

the election of hospice care or how the hospice may discharge a 

beneficiary 563 3.6% 2.1% 6.2%

Percentage of GIP stays for which the election statement mentioned 

potential costs to the beneficiary

563 67.4% 62.2% 72.2%

Percentage of GIP stays for which the election statement mentioned 

the length of periods

563 63.8% 58.4% 68.8%

Percentage of GIP stays for which the election statement noted that 

the beneficiary can change hospice providers

563 48.4% 43.0% 53.8%

Percentage of GIP stays for which the election statement included 

information on the levels of hospice care available

563 48.2% 42.8% 53.6%

Percentage of GIP stays for which the election statement included 

information on specific services that the hospice provides

563 42.0% 36.9% 47.4%

continued on the next page
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 20

Sample Sizes, Point Estimates, and Confidence Intervals (Continued)

Estimate Characteristic

Sample 

Size

Point 

Estimate

95-Percent Confidence Interval

Lower Limit Upper Limit

Election Statements

Percentage of GIP stays for which the election statement noted that 

hospice services were available 24/7

563 30.7% 26.0% 35.8%

Certifications of Terminal Illness

Percentage of GIP stays for which the physician did not meet 

requirements when certifying and appeared to have limited 

involvement in determining that the beneficiary was appropriate for 

hospice care

562 14.1% 10.6% 18.5%

Percentage of GIP stays for which the certifying physician did not 

include a narrative at all or included only the beneficiary's diagnosis 562 10.5%2 7.5% 14.5%

Percentage of GIP stays for which the certifying physician did not 

include an attestation 562 4.6% 2.7% 7.5%

1 The point estimate was 9.47 percent, which rounded to 9 percent as a whole number in the text.

2 The point estimate was 10.49 percent, which rounded to 10 percent as a whole number in the text.

Source: OIG analysis of hospice election statements and certifications of terminal illness, 2015.
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 21

APPENDIX D

Agency Comments 
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 22
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 23
 

Hospices Should Improve Their Election Statements and Certifications of Terminal Illness (OEI-02-10-00492) 24

ACKNOWLEDGMENTS

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. 

Nancy Harrison and Jenell Clarke-Whyte served as team leaders for this 

study. Other Office of Evaluation and Inspections staff from the New York 

regional office who conducted the study include Lauren A. Haynes, 

Jennifer Karr, and Casey Lyons. Central office staff who provided support 

include Evan Godfrey, Kevin Farber, Christine Moritz, and 

Berivan Demir Neubert. 
Office of Inspector General

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, as 

amended, is to protect the integrity of the Department of Health and Human Services 

(HHS) programs, as well as the health and welfare of individuals served by those programs. 

This statutory mission is carried out through a nationwide network of audits, investigations, 

and inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying 

out their respective responsibilities and are intended to provide independent assessments of 

HHS programs and operations. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and individuals. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities.