Illinois Misses the Mark on Some Medicaid Hospice Claims

A recent report by the Office of the Inspector General (OIG) shows that Illinois may not always claim proper federal Medicaid reimbursement for claims submitted by Illinois hospices. The report sampled 120 claims from 42 hospices between January 1, 2009, and December 31, 2010, in which the Illinois Medicaid agency claimed federal Medicaid reimbursement and found that in 23 of them, the claims were improper. Based on the recommendations in the report, the Illinois agency agreed to undertake the recommendations made by the OIG.

Medicaid hospice care. The Illinois Department of Healthcare and Family Services administers the Medicaid program for CMS in the State of Illinois through a CMS-approved state plan. Hospice care is available for individuals certified by a physician to be terminally ill, i.e., having a life expectancy of six months or less. Hospice care “is a program of palliative care that provides for the physical, emotional, and spiritual care needs of a terminally ill patient and his or her family.” Hospice care may be available in home, hospital, nursing home, or hospice facility setting, and a hospice could be a public or private organization or subdivision.

There are four levels of hospice care for which CMS sets payment amounts: routine home care, continuous home care, inpatient respite care, and general inpatient care. But to receive payment through Medicaid, the hospice service provided must meet the requirements listed in the State Medicaid Manual, including pricing, physician certification, and worker requirements, among others.

Report. The report noted that during the two-year period during which the sampling took place, over 56,000 hospice claims were submitted, amounting to $143 million. The 120 claims that were reviewed were $258,803 of that amount.

Ultimately, the OIG found that the state agency did not always properly claim federal Medicaid reimbursement. The reasons cited for the 23 improper claims were (1) not ensuring that patient credits applied were correct or adjusted; (2) not verifying that claims were correctly priced or adjusted; (3) hospice not meeting physician certification requirements; (4) hospice allowing an unqualified worker perform hospice services; and (5) hospice claiming the incorrect amount and level of service.  The first and second reason cited above amounted for the vast majority of the errors. Election statement requirements were also missed in 52 of the 120 claims by not ensuring they contained the required language (in 50 of the claims) and not retaining the election statements (in two cases). Election statements must be submitted for each individual electing to receive hospice care.

As a result of the report, the OIG recommended that the Illinois state agency ensures that hospice claims are processed, and adjusted, correctly; and monitor hospices with regard to physician certification, use of qualified workers, and election statement content and retention, to ensure that federal and state requirements are met in the future. It is recommended that a uniform election statement be implemented for all hospices in the state so that all required language is included.