white male hand pointing to legal copy and holding a magnifying glass looking for loopholes
Audit advice & 4 strategies for success
by Meg S.L. Pekarske, Bryan K. Nowicki & Emily M. Park

Hospice providers were under a microscope before the COVID-19 pandemic, but the focus on hospices may be even greater post-pandemic given an influx in federal funding and the dramatic change in processes caused by the pandemic. We have represented hospices in all manner of government audits and investigations for over 10 years, and have learned a number of ways to achieve success that we can share. Here are just four keys to help you better prepare for audits ahead.

1. Audits are like novels.

The beginning of an audit rarely resembles its end. While there are many “chapters” to an audit and its years-long appeal process, those who persist through the conclusion can find success. More than $50 million of overpayments have been thrown out in the past several months as a result of perserverance and zealous advocacy. These results do not occur within the first few weeks or months of an audit process; they may require years of wading through an appeal process or engaging in creative advocacy outside the appeal process. In audits, perseverance pays off.

Each “chapter” of the audit and appeal process presents opportunities for advocacy. The first chapters typically bring bad news—a challenge for our “heroes” to overcome. An auditor’s initial review of records typically results in an error rate of more than 50%. There are multiple levels of an appeal to challenge these results. The first two levels of appeal are redetermination and reconsideration. The redetermination process often results in a “rubber stamp” approval of the initial results, but that is the hospice’s first opportunity to begin building its record and setting the stage. The chances of success improve at the reconsideration level. In fact, the percentage of fully favorable reconsideration decisions issued by the Qualified Independent Contractors ranged between 34% and 40% in fiscal year 2020.

The Administrative Law Judge (ALJ) hearing level of appeal is where the prospects of success for a well-prepared hospice provider increase substantially. This level provides the first opportunity to present live testimony. Unfortunately, because there is a significant backlog at the Office of Medicare Hearings and Appeals, it can take years before the hospice’s appeal is set for hearing before an ALJ.

2. Pay attention to the details.

Audits typically focus on two areas of inquiry: first, whether patients were clinically eligible for hospice (i.e., does the documentation support a six month prognosis?) and second, whether the hospice’s documentation satisfied technical requirements relating to content, dating and signatures.

These technical issues are avoidable with diligent compliance efforts, including monitoring and pre-billing audits. Review your documentation now for the top technical issues flagged in audits:

  • Election Statements—Who signed the election? Does the patient have a power of attorney? What is the effective date? Is an attending physician identified?
  • Certifications of Terminal Illness—Do you have the right physician? Who is the attending? Are electronic signatures time stamped? Are recertifications timely? Did you obtain (and document) verbal certifications? Is the narrative sufficient (in form and substance)?
  • Interdisciplinary Group (IDG) Meeting Attendance and Participation—Is the review and updating of the plan of care documented as part of the IDG Meeting? Do you have an attendance sheet? How does the plan of care reflect input from necessary disciplines?

3. Build a winning team.

In our experience, hospice providers who do well in government audits employ leaders with diverse skillsets who enable the hospice to mount an effective audit response. The team can be comprised of any number of individuals, but we’ve broken it down into four archetypes shared here.

  • The CEO understands that the audit should not consume the hospice’s business plan and keeps it in perspective. The CEO should devote appropriate resources at the right time, understand that audits are a long haul, encourage persistence, define what “winning” an appeal means and keep the hospice’s board or other stakeholders informed and engaged.
  • The compliance officer should be proactive in evaluating the hospice’s risk areas (before any audit begins) and should be the coordinator of the response to any audit or investigation. This requires knowledge of and the ability to focus on the conditions of payment, both in preemptive reviews and during the audit itself. This person should develop a track record of compliance success, and foster that success by inviting third-party consultants to periodically give the compliance program a checkup.
  • The attorney applies extensive knowledge of the audit process and the legal and factual bases to challenge audit results. The attorney’s role is to provide perspective and strategies based on the particular facts, data and strengths/weaknesses. The advocacy inherent in this role is formal and informal, written and oral, and can occur at all stages of an audit.
  • The hospice physician is perhaps the most important person in audits that involve clinical eligibility because Medicare regulations place the hospice physician “at the center of the eligibility inquiry.”

Clinical eligibility continues to be the most common basis for denying claims. Physician narratives are the single most critical piece of documentation, making it essential that your physicians are qualified (preferably board certified in hospice and palliative medicine) and receive ongoing education on documentation. The physician narrative should speak to the patient’s prognosis and impacting conditions and symptoms, compare the patient’s current condition to the past to demonstrate disease progression, proactively address “weaknesses” (or put clinician notes into appropriate context), and demonstrate knowledge of clinical research and mortality scales. In hospice audits, there is nothing worse than having physician narratives that have been copied and pasted from prior recertifications or that list the patient’s conditions and symptoms without synthesizing that information. The hospice physician should be involved in the audit appeal at the earliest possible opportunity to assist with preparing patient summaries that explain in detail why the patients were eligible and citing to specific medical records.

4. Understand the hidden value of being tested.

Accepting the inevitability of audits can help you find benefits in the audit process. If your hospice has not yet experienced an audit, you may not know how well your documents would fare under heightened scrutiny. That is not a good thing, and the old “no news is good news” approach to audits isn’t the security it used to be. Accepting that audits will occur should motivate hospices to stay up-to-date and active in their compliance activities.

Moreover, there is value in challenging adverse audit findings. Claim denials are considered “provider education” which, if unaddressed, allow the government to impose more substantial consequences on the hospice in the future. Overturning claim denials on appeal proves the auditors wrong and builds a record that your hospice is doing things right. Such challenges can also help the hospice fulfill obligations it may have under the 60-day repayment rule to identify “credible information” of an overpayment and confirm (or rule out) the existence of an overpayment.

Meg S.L. Pekarske, Bryan K. Nowicki and Emily M. Park are partners with the law firm Husch Blackwell LLP and are members of the firm’s Hospice and Palliative Care practice.