Hospice Medicare Audit Readiness: Proactive Steps to Avoid Denials

In recent years, hospices have faced an increase in Additional Document Requests (ADRs) and audits from organizations such as the Supplemental Medical Review Contractors (SMRCs) and Unified Program Integrity Contractors (UPICs). They also continue to face Targeted Probe and Educate (TPE) audits initiated by the Medicare Administrative Contractors (MACs), and requests from the Recovery Audit Contractors (RACs). These reviews are driven by data analysis, industry growth and ongoing concerns about fraud and abuse. For hospices, preparation is key to navigating the audit process successfully and avoiding denials.

Hospices must meet specific documentation requirements to support Medicare Hospice eligibility. These include:

• Medicare Conditions of Participation (§ 418.200): Covers the election, certification process, eligibility and plan of care processes.
• Medicare Benefit Policy Manual – Chapter 9: Details document language requirements, time frames and documentation requirements.
• Medicare Claims Processing Manual – Chapter 11: Provides billing guidance.
• Medicare Program Integrity Manual – Chapter 3: Outlines signature requirements and audit protocols.
• CMS Transmittals: Updates regulations and documentation expectations.

Pre-ADR Preparation

Taking proactive steps before receiving an ADR helps reduce the risk of denials. Maintaining accurate contact information with CMS is essential, as incorrect addresses can lead to missed audit notifications. It’s also crucial to review all regulatory documents such as the election statement, patient notification of non-covered items, services and drugs (addendum), physician certification and face-to-face encounters in both the electronic and printed version to ensure all form requirements are met and content is clearly visible. Conduct pre-claim reviews to verify all technical and eligibility requirements are met before submitting claims. Obtain a History and Physical (H&P) for every admission to support the need for hospice care. Develop a discharge plan for every beneficiary to prevent prolonged stays due to social determinants. Provide crucial documentation training for physicians and clinicians on Certification of Terminal Illness (CTI) requirements, face-to-face encounters and Local Coverage Determination (LCD) criteria.

Remind physicians to create original certification narratives instead of copying and pasting documentation without adding their own assessment or prognosis. Regularly update care plans to reflect ongoing changes in the beneficiary’s condition and justification for ongoing care. Educate clinicians to address abnormal assessments promptly and to document interventions for changes in vital signs or symptoms to strengthen the case for hospice services. Resolve discrepancies in clinical data to ensure consistency between the clinical team, face to face and physician documentation.

Preparing ADR Response Packets

If an audit request arrives, prompt and organized action is crucial. Establish an audit response team with defined responsibilities for document collection, packet assembly, auditing and tracking results to streamline the process. Organize documents efficiently using dividers, headers and templates for response consistency. 

Different audits require different documentation, so it’s necessary to follow the specific ADR instructions. For example, one audit type may request e-signature policies, while another may ask for evidence of core team participation in the plan of care updates. Using digital tools to help to help compile and edit packets help streamline electronic submissions. Include supporting evidence, such as events prior to and after the claims requested, graphs, abnormal vital signs and documentation of decline, to strengthen eligibility claims. Keep copies of all submitted documents onsite for tracking and future appeals if needed. Since each request has a strict deadline it’s important to submit ADR responses timely.

Common Denials and Appeals

Denials generally fall into two categories: failure to establish a prognosis of six months or less in the documentation, and technical errors. Inconsistent or unchanged RN notes from visit to visit can be problematic as each note should stand alone with updated clinical information. Each note should address the primary diagnosis and its progression.  Invalid certifications occur when physicians fail to synthesize clinical data supporting a prognosis of 6 months or less, copy prior notes or other’s notes or use check boxes without relevant information for that beneficiary. Signature issues, such as missing, misplaced or incorrectly dated signatures, can result in denials. Face-to-face encounter errors may occur if encounters are not completed within the correct timeframe relative to certification or use the incorrect language in the face-to-face attestation. Missing or incomplete addendums (when requested) can trigger rejections. Election statement errors, such as missing the required language effective October 1, 2020, including the Beneficiary and Family Centered Care-Quality Improvement Organization (BFCC-QIO) contact details, blank effective dates, and unsigned or missing documents are not uncommon and can also lead to rejections.

Strategies for Appeals

If a claim is denied, the appeal process is the next step. Write a strong appeal letter that addresses the denials. This letter should include claim details and a clear explanation of why hospice care was appropriate. Highlight all clinical changes by indicating how the beneficiary’s condition worsened and referencing symptom management, physical, nutritional and functional changes, abnormal vital signs, increased care needs, and caregiver and family concerns. Especially include details of hospice interventions that supported their end of life and may have prevented emergency room or hospital visits.

Addressing misinformation is also important when a denial cites incorrect LCD guidance or misapplies regulations. Supporting documentation or regulations can help clarify discrepancies. Involving medical directors and attorneys early in the process is beneficial to building a strong case. Physician input can strengthen clinical arguments for their decision on certification or recertification of denials, and legal counsel will guide you through the process of complex situations.

Preparing for Administrative Law Judge (ALJ) hearings is another important step. The MAC may present alternative scenarios for a beneficiary’s condition, and hospices must be ready to justify their care decisions. Limiting attestations is also recommended as. ADR reviewers rarely accept them after a claim has been submitted unless they are contemporaneous with the event.

Data-Driven Defense

Track key metrics that can influence audit outcomes. Length of stay is a significant factor, as longer stays are more likely to be scrutinized. The diagnosis and care setting mix are also impactful. Visit frequencies, visit times and after-hours utilization help support the need for hospice services.

Final Thoughts

Hospices must stay vigilant in their documentation practices to reduce audit risks and successfully navigate ADRs. Proactively addressing documentation issues and implementing a robust pre-claim review process are key to surviving audits. If audited, prepare structured audit processes and responses. If denied, build strong appeals with information supporting the physician’s certification and recertification decisions. By adopting these approaches, organizations can more effectively defend their eligibility determinations and maintain compliance with Medicare regulations.