CMS Expands Hospice Prepayment Review in Four States: What Providers Need to Know

In a significant development for hospice providers, the Centers for Medicare & Medicaid Services (CMS) has announced an expansion of hospice prepayment review in four states: Arizona, California, Nevada, and Texas. This move, set to begin in September 2024, is part of CMS’s ongoing efforts to combat fraud, waste, and abuse within the hospice benefit system. We hope this article answers some of your questions, but should you have any concerns or need assistance with any of the following advice, do not hesitate to contact us.  

What Hospice Providers Does This Affect? 

The enhanced oversight applies to any new hospice, a hospice submitting a change of ownership (CHOW), or a hospice undergoing a 100% ownership change that doesn’t fall under a CHOW, as described in a Medicare Learning Network (MLN) article released Thursday.  

CMS identifies a new hospice as: 

• Received their final approval for Medicare enrollment on or after July 13, 2023; 

• Started the enrollment or certification process before July 13, 2023, but haven’t received a final approval letter from their MAC as of that date; and 

• Receive(d) approval on a CHOW request on or after July 13, 2023. 

Enhanced oversight will last anywhere from 30 days to one year and can include prepayment reviews, additional visits for providers not billing, and possible deactivation of the hospice’s provider number, according to the National Hospice and Palliative Care Organization.  

Key Points of the Hospice Prepayment Expansion 

• Target States: Arizona, California, Nevada, and Texas 

• Implementation Date: September 2024 

• Initial Approach: Low review volumes, adjusted based on results 

• Objective: Reduce the burden on compliant providers while identifying non-compliance 

What This Means for Hospice Providers 

• Increased Scrutiny: Providers in the affected states should prepare for potential prepayment reviews of their claims. 
• Focus on Compliance: Ensuring accurate documentation and adherence to hospice benefit guidelines is more critical than ever. 
• Potential Consequences: Non-compliant providers may face extended reviews or additional administrative actions. 
• Cash Flow Questions: How will this expansion impact cash flow and operations, specifically? SimiTree experts explain that hospice agencies will have to go through the ADR process prior to getting paid for the claims that were pulled. Depending on the total number this could be crippling for an agency. In addition, if the agency has a high error rate, then the likelihood of an increased number of audits will occur. 

You may also be wondering if this expansion has potential implications for hospice providers in other states. We will share more updates as we hear them, but all we can say for now is that CMS may have targeted these states because of the increased growth of hospices in those states, so there may be a possibility that they will expand this audit to other states. 

What specific areas of hospice billing and documentation should hospice providers in these states focus on to ensure compliance? 

Since this is prepayment, medical necessity, and the patient meets the criteria for hospice at the level of care admitted, any continued care will be critical. Have all their technical requirements been met? Examples would be NOEs and certifications in place before billing. Are all visits completed and on the claim? Are they compliant with their coding, and does the overall care support the patient? Keep reading for how to stay prepared.  

Preparing for Prepayment Review: How Hospice Providers Can Prepare for Potential Prepayment Reviews 

As prepayment reviews expand in Arizona, California, Nevada, and Texas, hospice providers must proactively ensure compliance. Here are key strategies to prepare: 

1. Conduct Thorough Internal Audits  

• Regularly review a sample of patient files (recommend minimum 10% of census) 
• Focus on key areas like certification of terminal illness, face-to-face encounters, and plan of care documentation 

2. Strengthen Documentation Practices  

• Implement comprehensive checklists 
• Ensure all staff understand the importance of thorough, accurate, and timely documentation 

3. Enhance Staff Training on Compliance  

• Provide regular education sessions on current regulations 
• Focus on common reasons for claim denials and how to avoid them 
• You may be wondering: What strategies can hospice providers implement to reduce the risk of being flagged for noncompliance? Read our blog now on how to stay compliant with key strategies from our team: Palmetto HQRP Non-Compliance: A Critical Wake-Up Call for Hospices » SimiTree (simitreehc.com)  
• It’s also important to note that while the quality is important and not reporting can cause a decrease in payment, this is specifically saying that the claims will not be paid until the agency can prove that the patient needs to be on hospice services. 

4. Optimize Billing Processes  

• Keep billing teams updated on current coding requirements 
• Implement double-check systems before claim submission 
• Read our Hospice Billing Playbook: A Step-by-Step Guide to Success. 

5. Implement Robust Quality Assurance Measures  

• Establish a dedicated quality assurance team 
• Do you have a strong QAPI program? 
• Regularly analyze claim denials to identify patterns and areas for improvement. Learn to avoid the #1 claim rejection.  

6. Prepare for Efficient Response to Review Requests  

• Develop systems for quickly locating and compiling requested documentation 
• Assign clear staff responsibilities for managing review responses 
• Learn about survey scrutiny and prepare in advance for any surveys 

7. Stay Informed on Regulatory Updates  

• Actively monitor CMS communications 
• Participate in industry conferences and webinars focused on compliance 

8. Leverage External Expertise  

• Consider engaging healthcare consultants for mock audits 
• Learn more about mock surveys, pre-bill audits, and more 
• Seek legal counsel to review compliance programs 
• Learn the top four problems hospice agencies are facing in eligibility and billing (what CMS is targeting).  

9. Establish Open Communication with Your MAC  

• Build a positive relationship with your Medicare Administrative Contractor 
• Respond promptly to any inquiries or requests 

10. Utilize SimiTree’s Specialized Services  

• Take advantage of SimiTree’s prebill audit services to ensure compliance with clinical and technical requirements 
• Benefit from our expertise in identifying process improvements or education needs based on denial patterns 
• Leverage our comprehensive approach to correct course and optimize your hospice operations 

By implementing these strategies and partnering with experienced consultants like SimiTree, hospice providers can significantly improve their readiness for prepayment reviews and maintain high-quality, compliant care delivery. 

SimiTree Can Help 

As healthcare consultants specializing in hospice care, we at SimiTree understand the challenges this expansion may present. We’re committed to helping hospice providers maintain compliance, optimize their operations, and continue providing high-quality end-of-life care. 

Stay tuned for more updates as we continue to monitor this situation and provide expert guidance to navigate these changes. 

For personalized assistance with hospice compliance and prepayment review preparation, contact SimiTree today.