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Will your compensation system result in charges instead of legit admits?

If you had any doubt that your hospice marketing practices and nursing home relationships are under increased scrutiny, a recent million dollar settlement should set you straight.

Background: Tampa, Fla.-based Hernan-do-Pasco Hospice Inc. recently settled False Claims Act charges for $1 million (see Eli’s HCW, Vol. XXII, No. 26). Among the many charges leveled by two former social work employees against HPH are providing kickbacks via free nursing and caregiver services to skilled nursing facilities and other referral sources.

This settlement is just the latest signal to hospices that they are under the feds’ microscope. "The government is spending the time and resources to go out and identify improper payments" to hospices, notes attorney Julie Mitchell with Mitchell Day in Ridgeland, Miss. "It is not a matter of if they audit these providers, but when," Mitchell warns.

Enforcement officials have overlooked the hospice industry for a long time, says attorney Robert Markette Jr. with Hall Render in India-napolis. They saw it as a mostly non-profit provider group with small Medicare spending totals.

But that has changed in recent years, with the number of hospice agencies and patients skyrocketing. Most of those new providers are for-profits, as the Medicare Payment Advisory Commission and HHS Office of Inspector General routinely point out in reports and recommendations to Congress.

Now authorities are catching up with the industry’s growth and deploying resources to monitor hospices’ compliance with federal laws and other requirements.

The HPH settlement shows three big hospice areas the government is targeting for investigation, points out attorney Marie Berliner with Joy & Young in Austin, Texas: nursing home relationships, marketing tactics, and eligibility issues (six-month terminal prognosis).

Consider this advice from legal experts to head off charges related to these hospice compliance hot buttons:

1. Educate management. "If management’s background is not in health care, be sure they understand that health care is different than other businesses," advises attorney John Gilliland with The Gilliland Law Firm in Indianapolis. "What is perfectly lawful in other businesses can be unlawful with respect to health care reimbursement."

A legit incentive to refer in other business lines becomes a kickback — and federal law violation — under Medicare.

Management should know the ins and outs of your compliance program (see story, p. 236) and make sure your agency is adhering to requirements.

2. Examine your rewards structure. In-creased census and longer-staying patients may be great for your bottom line, but that doesn’t mean you should structure your marketing staff and even clinicians’ pay based on them.

Be sure promotions, salary increases, bonuses, and other benefits you bestow reward lawful conduct, not unlawful conduct, Gilliland says. "What is rewarded is what gets done."

For example: If you pay staff based on admission, you will likely end up with a number of inappropriate admissions such as those alleged in the HPH lawsuit, for patients that don’t meet the six-month terminal prognosis requirement. "You get what you ask for," Markette stresses. "When you pay for admits, you get admits — but not the ones you want."

Ditto for pay based on length of stay, especially when clinicians’ reimbursement is based on LOS figures. That is an even riskier compensation arrangement than paying based on admissions. "LOS targets are a great way to go to jail," Markette warns.

What to reward? Some hospices choose to pay marketers based on activities such as sales calls. You can also consider paying staff based on company-wide profitability, Markette offers.

3. Empower your clinicians. Although you should strive to avoid it, it may be natural for marketing to push for patients to be admitted or recertified. But clinicians should be able to push back to make sure only eligible patients are on your rolls.

If clinicians are afraid to voice an opinion about eligibility because they’ll "kill the census," as one HPH manager allegedly told a nurse, you are losing an important line of defense in your compliance effort, Markette cautions.

Watch out: You also need to be on guard against altruistic clinicians who want to enroll or recert people who would benefit from the service, but who don’t yet meet the six-month prognosis, Markette warns.

4. Beef up documentation. As always, your documentation will make or break your claim. But after years of inattention from regulators, some hospices have gotten sloppy with this essential component of furnishing care.

"Hospices should continue to be vigilant in their documentation to ensure that they are keeping up with the most recent regulatory requirements," Berliner exhorts. That includes the face-to-face re-quirement and six-month prognosis.

5. Don’t skirt the issue with patients. One of HPH’s marketing tactics that the lawsuit targeted involved explaining the hospice benefit to patients. You must spell out that electing hospice means foregoing curative care, and the feds have been looking at that issue specifically in recent cases, Markette notes. Review your marketing and admissions materials to make sure you comply with this requirement.

6. Conduct audits. When you have a robust compliance program in place, you need to check to make sure it is working. That means audits.

"All hospices should definitely be reviewing compliance as it works in their organizations, not a document that they may have acquired and adopted," urges Deborah Randall with Deborah Ran-dall Consulting in Washington, D.C. "I recommend spot audits from outside legal experts who know the field. These can be done economically and the return is obviously positive in light of the cases now on the books."

As part of your compliance plan, you also need to check that all requirements are fulfilled before you submit a claim. "Especially important are procedures to avoid false claims being submitted for government reimbursement," Gilliland stresses.

7. Educate staff. Train employees as part of your compliance program. You can choose the hot button topics as highlighted by the OIG and others, and you can choose to address repeating problems that you pick up on in your audits.

8. Head off whistleblowers. HPH may never have come to the feds’ attention without the whistleblower complaint filed by disgruntled ex-employees. "The incidence of qui tam actions has been on the rise, and will probably continue to rise," Berliner predicts. As whistleblowers receive higher payouts and those sums get more publicity, it will attract suits from more dissatisfied ex-staffers. The two social worker relators in the HPH case will receive $250,000. Last year a nurse received $1.2 million after filing suit against Hospice Care of Kansas and an ex-employee of Hospice of Arizona received a $1.8 million payment.

Employees aren’t the only ones who can file a qui tam suit, however. Patients and competitors are also aware of the False Claims Act and are using it to get the government involved, Mitchell notes. "It is the new med mal crisis just on a larger scale," she says referring to medical malpractice litigation against physicians.

Make sure to set up a good employee complaint reporting system as part of your corporate compliance plan, legal experts recommend. Em-ployees who feel heard by management may not resort to outside lawsuits. (For tips on heading off qui tam lawsuits, see Eli’s HCW, Vol. XXI, No. 6).