Volume 24.04
LeadingAge, the National Association for Home Care & Hospice (“NAHC”), the National Hospice and Palliative Care Organization (“NHPCO”), and the National Partnership for Healthcare and Hospice Innovation (“NPHI”) have released their National Hospice Audit 2023 Survey Report. This report is based on a survey of hospice provider members conducted in late 2023.
Key Findings included:
- Improper targeting of surveys resulting in sector inefficiencies and provider burdens, ultimately impacting beneficiary care.
- Contractors’ inability to properly target providers for surveys harms beneficiaries.
- Poorly trained auditors exhibit limited knowledge of critical aspects of hospice operations and do not follow proper policies and procedures, leading to inaccurate, error-riddled audits.
- Audit contractor activities, processes, and application of policy are opaque, inconsistent, and uneven – which results in significant inefficiencies and impacts beneficiaries’ access to care.
- Inefficient resolution processes for technical claim denials leave provider no options other than to engage in lengthy, time-consuming appeals processes.
The report makes the following recommendations:
- CMS should re-focus its audit contractors on patterns and practices characteristic of providers that aim to minimize or avoid therapeutic care and supportive services that are required under the hospice benefit and fully reimbursed through the per diem payment.
- CMS should require substantive education and training for all auditors that is consistent with the education given to providers to minimize inconsistencies.
- CMS should increase transparency of audit contractor activity, including the number and types of audits being conducted, audit recovery amounts, results of audits by specific audit contractors, including reversal rates, top denial reasons and compliance with required timeframes for notification and review.
- CMS should implement an informal mechanism to enable MACs and hospice providers to resolve technical claims denials prior to engaging in the formal appeal process.
- CMS should require audit contractor medical reviewers to have an equivalent level of expertise and training in hospice care as the hospice medical director who certified a patient’s terminal illness.
The report is available here.
HOSPICE ACQUISITIONS TREND
It is widely reported that hospice acquisitions were significantly less in 2023 than in the two previous years. The Health Group, LLC is witnessing a significant increase in transaction interest (buyers and sellers) in 2024; however, potential buyers are focusing heavily on historical and potential claim-related audits and reviews, general regulatory compliance due to the significant integrity focus by CMS, and geographical location because certain states have requirements significantly above those imposed at the national level. Make no mistake, acquisition due diligence is going to take longer and will require a deeper dive into many aspects of the seller given the current regulatory and operating environment.
Additionally, the costs of financing are significantly greater than 2022 levels. These financing costs require buyers to provide evidence of available returns.
The current regulatory environment, geographical issues, and increased financing costs will be considerations to any purchase price related to 2024 acquisitions.