Historically, the Centers for Medicare & Medicaid Services hasn’t put a lot of emphasis on tracking costs in the hospice industry.
In the late 1990s, there wasn’t even a requirement to file the reports. However, CMS later decided it did need some kind of information on the sector and required hospices to file. Organizations can now lose Medicare payments if they don’t file the reports, and yet, because there are no penalties for inaccurate reporting, there is little motivation to spend much time on them.
In the current climate, in fact, a hospice could claim something as inconsistent as providing care for inpatient days, but not associating any cost for inpatient stays. There is no mechanism used to catch even big, easily apparent errors.
Judi Lund Person, vice president of compliance and regulatory leadership for the National Hospice and Palliative Care Organization, said an analysis on the an internal NHPCO analysis of cost reports showed that the cost per day of nursing care reported by hospices ranged from 6 cents to $55,000 – neither of which was right. These kinds of discrepancies, she said, “affect the reputation for validity of the cost reports.”
But hospices ability to turn in unchecked reports will soon be changing.
CMS has created a new cost report for hospices that is slated to go into effect in fiscal year 2015 for freestanding clinics. It is assumed that similar reporting for provider-based hospices is soon to come. The new reports will go through two levels of edits; those reports that don’t meet the standards will be returned for correction.
“Hospice was such a small part of Medicare expenses – it was so dramatically different than what they pay out to other organizations, they never tracked it,” Lund Person said. “Now, they are a $15 billion industry. CMS is starting to look at the data in hospice and see what the report tells.”
The reports will likely be used much in the same way they have in home healthcare, where in the late 1990s, an audit was used to adjust payment rates, said Tom Boyd, vice president of reimbursable services at Simione Healthcare Consultants, LLC. CMS is scrutinizing the cost of care in the industry and the results will be used to inform payment decisions.
The new cost reports will be based on four levels of care: routine home care, general inpatient care, inpatient respite care and continuous care. Lund Person said CMS appears to be segregating care into groups, some of which might not need to be reimbursed.
CMS has estimated that compiling information and submitting the new reports will take about 180 hours. The final rules have yet to be released, and both Lund Person and Boyd said the starting date may be extended.
Because the new report requires a much greater level of detail and is more sophisticated, Boyd said hospices will have to overhaul their chart of accounts. And they shouldn’t wait too long to do it. Boyd said providers shouldn’t wait until the end of fiscal 2015. By that point, they will be “scrambling to get circles into square pegs,” he said. Changing the chart of accounts during the fiscal year will save time and make the reports more accurate.
Lund Person said she hopes the changeover will help unify industry standards for reporting costs. She said she hopes it will make hospices start putting costs in the right place. For instance, how do they allocate laundry and linen services, bereavement services, nursing room and board or staff transportation? Are the vehicles leased or owned and how is mileage paid?
“Part of the whole best practices is to start to listen to what is going on in the industry and ask, ‘How do I make sure that my way of calculating this is in line with what industry standards are?’” she said.