Hospice: Consolidated Appropriations Act Revamps Medicare Survey and Certification Process

Morgan Lewis
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Morgan Lewis

Modifications also include public disclosure of accreditation organization survey information and intermediate civil penalty remedies for noncompliance.

The Consolidated Appropriations Act, 2021 (Pub. L. 116-260), signed into law on December 27, 2020, establishes hospice program Medicare survey requirements and new enforcement procedures under the Medicare program. The hospice provisions are in part a reaction to the release in 2019 of a pair of inspection reports detailing the results of hospice surveys by the HHS Office of Inspector General (OIG) that attracted negative media attention, but that also garnered a strong response from the hospice industry as many believed the reports lacked balance and focused excessively on the negative findings associated with a small minority of hospices.

Following the OIG reports, legislation was introduced in the 116th Congress to modify the hospice survey process including the Helping our Senior Population in Comfort Environments, or HOSPICE Act, a bill generally supported by the hospice industry. Section 407 of the Consolidated Appropriations Act substantially incorporates the HOSPICE Act and makes important changes to the hospice survey and certification process including granting Medicare the flexibility to impose financial penalties and alternative remedies for serious violations in lieu of hospice program termination as discussed below.

HOSPICE SURVEYS

Frequency, Training, Staffing, Conflicts of Interest, and Funding. The Consolidated Appropriations Act directs that hospice programs will be subject to a standard survey by an appropriate state or local survey agency, or an approved accreditation agency at least every three years (a schedule Medicare had established without being directed by Congress in recent years) and further provides that “each State and the Secretary shall implement programs to measure and reduce inconsistency in the application of survey results among surveyors.” To that end, and in response to industry concerns that Medicare hospice surveyors, particularly by state survey agencies, were inconsistent in their approach, the legislation directs the Secretary to establish comprehensive training for state and federal surveyors and surveyors employed by a national accreditation body not later than October 1, 2021 that includes training on the review of written plans for providing hospice care.

With respect to staffing, surveys conducted by more than one individual must include multidisciplinary professionals, including a registered nurse on or after October 1, 2021. Reacting to industry concerns of potential surveyor bias, states will also be prohibited from staffing survey teams with individuals who currently serve (or have served within the prior two years) as staff members, or consultants to the hospice program under survey, or who have a personal or familial financial interest in that hospice. Finally, in light of the growing importance of hospice to beneficiaries and the industry’s substantial growth, Congress directed the transfer of $10 million in annual funding for the purposes of carrying out hospice surveys beginning in federal fiscal year 2022.

More Frequent Surveys for Noncompliant Hospices. One common industry refrain on Capitol Hill was that many strong and compliant hospices were being unfairly tarnished by the actions of a small number of unscrupulous hospices. The legislation directs the Secretary to conduct a “special focus program” for enforcement of requirements for hospice programs identified as “having substantially failed to meet” applicable requirements of the Consolidated Appropriations Act. Hospices under the special focus program will be subject to periodic surveys of not less than once every six months.

Public Release of Accreditation Organization Hospice Survey Information. To further assist the public assess Medicare participating hospices, surveys conducted by accreditation organizations and enforcement actions taken as a result will now, in addition to those performed by state agencies, be subject to public disclosure on the CMS website “in a manner that is prominent, easily accessible, readily understandable, and searchable” beginning no later than October 1, 2022. The legislation also provides for the “timely update” of this information by the Secretary.

ENFORCEMENT AND REMEDIES

Enforcement. With respect to situations identified in surveys involving the immediate jeopardy to the health and safety of hospice patients, the Secretary is required to take immediate action to ensure removal of the jeopardy and correct the deficiencies including the right to terminate the hospice program from Medicare. For serious survey deficiencies that do not involve immediate jeopardy, the termination right had previously been used by Medicare as its sole sanction for hospices that did not correct those deficiency situations. However, under the Act, Medicare will have one or more alternative remedies (e.g., civil monetary penalties, suspension of all or part of Medicare payments, temporary management) in lieu of termination that allows Medicare to continue its payments to the hospice program for a period not to exceed six months if the following conditions are met:

  • The state or local survey agency finds that it is more appropriate to take alternative action to assure compliance of the program with such requirements rather than to terminate the certification of the program;
  • The hospice program has submitted a plan and timetable for corrective action that is approved by the Secretary; and
  • The hospice program agrees to repay federal payments received during this period if the corrective action is not taken in accordance with the approved plan and timetable.

A civil money penalty may be imposed for the days during which the Secretary finds that the hospice program was noncompliant. If the hospice program remains noncompliant after the six-month period ends, the Secretary will terminate the hospice program’s participation in the Medicare program.

Remedies. Not later than October 1, 2022, the Secretary must issue regulations to develop and implement a range of remedies for noncompliant hospice programs. The remedies are to include specific procedures, including the severity and amount of any fines, as well as appeal procedures related to the sanctions or remedies. “Such procedures shall be designed so as to minimize the time between identification of deficiencies and imposition of these remedies and shall provide for the imposition of incrementally more severe fines for repeated or uncorrected deficiencies.” It is important to note that the following remedies are in addition to sanctions otherwise available under state or federal law and may not be construed as limiting other remedies:

  • Civil money penalties not to exceed $10,000 for each day of noncompliance
  • Suspension of all or a portion of Medicare payment
  • The appointment of temporary management to oversee the operation of the hospice program that shall remain until the Secretary determines that the program has the management capability to ensure continued compliance

How Medicare would exercise its “temporary management” authority for the operation of a hospice is not clear, but we expect future regulations or CMS guidance may address some of those details, and CMS may apply that authority in similar fashion to its existing sanction authority for nursing homes subject to immediate jeopardy findings under 42 CFR § 488.408 and State Operations Manual Chapter 7 for nursing home surveyors.

ADDITIONAL PROVISIONS

Quality Data Reporting Requirements. The penalty for hospices that fail to report quality data to the Secretary will increase from two to four percentage points beginning in fiscal year 2024. This will be a significant penalty for noncompliant hospices with regard to quality data reporting.

GAO Report. The new law requires a Government Accountability Office report to Congress within three years on the effects and application of the new remedies addressed by the Act on access to, quality of, and care furnished by hospices under the Medicare program.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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