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Patient length of stay is monitored to detect instances of inappropriate use of the hospice benefit or other deficiencies in the services delivered by the hospice provider. Length of stay is monitored for both very short length of stay as well as for length of stay that is longer than the norm.
When patients are discharged alive with a short length of stay it may signal that the patient did not understand the hospice benefit when the patient was admitted to hospice. Or, patients may discharge live from hospice after just a few days because they were not satisfied with the services delivered by the hospice provider. Patients with length of stay longer than 180 days could be indicative of a patient who is no longer hospice eligible. Patients who are no longer eligible for service should be discharged from hospice and any payments that were received from Medicare while the patient was no longer eligible for services should be returned to Medicare. Failure to discharge the patient or failure to return the funds are examples of fraud and abuse.
Length of stay is calculated based on the number of days that a patient receives hospice care. Specifically, for a patient who is discharged from hospice (whether or not the patient is discharged alive), the patient length of stay is calculated as follows:
Patient length of stay = [patient discharge date]-[patient admission date]+1
The length of stay calculation assumes that only discharged patients are considered in the calculation – since the formula expressly refers to the patient discharge date. When only discharged patients are considered (whether live discharges or discharges due to death), the hospice provider only has a backward-looking view on performance relating to length of stay. For example, if a hospice provider has been providing service to a patient for 12 months and the patient is still on service, the patient will not be included in the traditional average length of stay metric – since the patient has not yet been discharged. On the other hand, once the patient is discharged the patient’s length of stay will be at least 365 days since the patient – while still currently active – has already been on service for 365 days. If active patients are considered in a length of stay calculation, it gives a hospice provider a metric that can be used to highlight patients whose clinical charts and documentation of care may benefit from additional review.
In addition to computing average and median length of stay based on discharged patients only, average and median length of stay can be computed for active patients. Patient length of stay for an active patient is calculated as follows:
Active patient length of stay = [end of evaluation period date]-[patient admission date]+1
For example, suppose the current date March 15, 2023 and a hospice wishes to calculate the active patient length of stay as of the end of 4Q 2022 for a patient who was admitted on December 1, 2022. The calculation is as follows:
The active patient length of stay as of the end of 4Q 2022 is 31 days.
If the hospice wishes to calculate the active patient length of stay as of current date, the calculation is as follows:
Average and median length of stay would be computed as usual. If any concerning value — such as long length of stay – is identified based upon the active patient length of stay, a hospice provider can immediately investigate and determine if any remediation action is required, rather than waiting until patients are discharged. Delay can lead to additional fines or further action from Medicare.
Patients are eligible for hospice if they have a terminal diagnosis and a prognosis of six or fewer months to live if their disease runs its natural course. A patient who lives longer than six months can still get hospice care if the medical director or other hospice physician recertifies that the patient is still terminally ill.
Hospice length of stay is an important metric that is monitored by both CMS and by hospice providers. Hospice length of stay measures the count of days that a patient receives hospice services, from the day that the patient is admitted into hospice until the day the patient is discharged (either alive or deceased). In 2018, 25% of Medicare beneficiaries received hospice care for seven days or less and 54% of Medicare beneficiaries received hospice care for 30 days or less.
Monitoring patient length of stay can aid in detecting cases of possible fraud or abuse – instances where ineligible patients continue to receive the hospice benefit. This metric also helps monitor whether the hospice benefit is being adequately utilized. Although patients are eligible for hospice when they have six months or less to live, most patients receive less than 30 days of hospice care.
Agency patient length of stay is also trended over time and is also compared against the value for patients in the same region, state, or nationwide. The metric may also be analyzed for patients in subpopulations – for example patients with the same disease, race, or ethnicity.
Patient length of stay is calculated using all patients discharged by the hospice provider during the reporting period. For example, if the hospice would like to compute the length of stay for patients during the 4Q 2022, all patients who were discharged during 1Q 2023 would be included in the calculation. For each patient, the number of days from the date of patient admission until the date of patient discharge is counted; this represents the patient length of stay.
Patient length of stay = [patient discharge date]-[patient admission date]+1
Two common patient hospice length of stay measures are Average Length of Stay (ALOS) and Median Length of Stay (MLOS).
Average length of stay is the arithmetic mean of the data collected. Specifically, if d is patient length of stay and N is the total number of patients then average length of stay (ALOS) is calculated as follows:
ALOS = ( d1 + d2 + d3 + …. + dn ) /N
Where di = patient length of stay for patient i
Median length of stay is the middle number in the sequence of numbers. Specifically, compute the length of stay for all N patients. Then, order these N numbers in ascending order. The middle number is the median. If the number of patients is even then there is no middle number. Instead, the median is calculated by taking the average of the two numbers in the middle.
The average is sensitive to outliers in the data. That is, if there are a few patients with a very high length of stay while all other patients have a significantly lower length of stay, the average will be biased by these outliers and will give a misleading assessment of overall patient length of stay. Below, we give an example to provide greater intuition into the impact of outliers on average length of stay and the difference between mean and median length of stay.
Suppose a hospice agency discharged 35 patients during 4Q 2022. The patients’ lengths of stay are as follows:
We compute the average length of stay by summing each of the 35 patient’s length of stay (in the “Length of Stay” column) and dividing that total by 35 (the total count of patients).
Average length of stay (ALOS) = 38.5
We compute the median length of stay by sorting the patient’s length of stay in ascending order and identifying the central number. Since there is an odd number of patients, there will be a single central value. In this case, the central value is 20.
Median length of stay (MLOS) = 20
Average length of stay is almost double the median length of stay. What is leading to these significant differences between ALOS and MLOS? Observe the outliers in the data. There are two patients with length of stay that exceeds 200 days. There are two additional patients with length of stay exceeding 100 days. Since ALOS is sensitive to outliers, ALOS is being pulled to a higher value due to the presence of these outliers.
To provide additional insight, we have plotted a histogram of the length of stay values. A histogram shows the count of observations in the data that fall in each of the specified ranges.
The table on the left shows the count (frequency) of observations of patient length of stay in the data for each of the ranges: 0-10 days, 10-20 days, 20-30 days, 30-40 days, and greater than 40 days. There are 11 patients with length of stay between 0-10 days, 7 patients with length of stay between 10-20 days, 6 patients with length of stay between 20-30 days, 6 patients with length of stay between 30-40 days, and 4 patients with length of stay that exceeds 40 days.
Think about this histogram and now consider the MLOS and ALOS. Median length of stay is 20 days – it falls well in the middle of the data. Average length of stay, however, equals 38.5. It falls, essentially, in the final bar of this histogram and well beyond where the majority of the data lies. The provides a visual demonstration of the impact of outliers on ALOS.
Providers should monitor both ALOS and MLOS. Significant differences between these numbers would indicate the presence of outliers and should be investigated.
Like all other business decisions, a hospice marketing plan must be data driven. More progressive hospice agencies have increasingly begun to understand the value of many types of data in supporting business decisions. This includes internal data such as patient EMR data, financial data including general ledger revenue and expense data (at various levels of aggregation), and quality data. It also includes external data such as publicly available claims data, cost report data, and referral data.
This article published in June 2021 discusses how hospice agencies are using data analysis as a tool to gain an edge over competitors when engaging with potential referral sources. The discussion focuses on use of data analysis to identify which physicians represent referral sources that are more likely to produce (higher quality) referrals. This 2016 NHPCO article discusses the use of hospice metrics as a marketing tool. For example, a hospice agency can share statistics on reduction in hospital admissions for its patients in hospice compared to hospital admissions prior to hospice admission. Other metrics on cost of care or patient satisfaction are of interest, depending upon the referral source.
A hospice should gather data so that it can develop a complete picture of the customers that it serves. It should analyze its patients – including referral sources and patient attributes such as patient diagnosis, length of stay, and patient demographics. Referral sources can be analyzed at different levels of aggregations such as geographic location, facility type, physician type, and physician name. Analysis of hospice patients should be compared to analysis of data for the entire market (in the relevant geographic region). This can help a hospice agency identify where it may have strengths or weaknesses and contribute to its marketing strategy.
When analyzing the output of the data analysis, the hospice agency should solicit input from multiple sources in the organization. Combining different perspectives on the data such as input from the executive, marketing, and clinical teams will provide a more holistic view and a more accurate assessment of the current marketing performance and how the go-forward marketing strategy should be designed.
The simplest method for analyzing the data is to use Microsoft Excel. Excel is widely used in most organizations, so gaining access to this software should not be difficult. With relatively simple commands, one can analyze data and create charts to visualize the results of data analysis. Another benefit of using Excel for data analysis is that a lot of educational material is available on the Web to answer any questions that you may have about using Excel – in case there are data analysis functions that you want to learn more about.
Patient data and claim data are historical data that are important inputs to a developing a marketing strategy. A hospice agency should also analyze forward-looking data as well as more general information such as:
Combining analysis of historical and forward-looking data and soliciting input from team members with different perspectives such as operational, clinical, and marketing will help a hospice agency develop an effective marketing plan.
Using hospice metrics for marketing
Unified Program Integrity Contractors (UPICs) are contracted by CMS to conduct detailed medical review, data analysis, and audits of healthcare providers to investigate possibilities of Medicare or Medicaid fraud, waste, and abuse.
While the primary purpose of a RAC or MAC audit is to review payments, the primary purpose of a UPIC audit is to investigate when there is suspicion of fraud – especially fraudulent billing practices. A UPIC audit can lead to federal Medicare fraud charges or criminal prosecution. As such, UPIC audits are more serious than other audits.
Prior to UPICs, Zone Program Integrity Contractors (ZPICs) had been responsible for performing fraud, waste, and abuse detection and prevention activities for CMS. In 2016, CMS began to transition to the UPIC program. This transition took a number of years, with ZPIC contracts rolling over to the UPIC program as ZPIC contracts expired. The ZPIC program has now been phased out and replaced with UPICs. UPICs were formed as part of the Comprehensive Medicaid Integrity Plan (CMIP) with the intention of consolidating under a single federal contractor work performed by numerous Medicare and Medicaid program integrity contractors. UPICs combine all federally funded integrity reviews into a single audit and place payments to all federally funded payers under a higher level of scrutiny.
Consolidating responsibility provides UPICs with access to more data and information about healthcare claims, billing, and payments to hospice agencies. By increasing the level of information and data to which UPICs have access, UPICs have improved ability to identify billing anomalies and fraud.
With respect to regional responsibility, the United States has been split into different geographic jurisdictions: Western, Mid-Western, North-Eastern, South-Eastern, and South-Western. Each UPIC is responsible for handling federal-level audits for both Medicare and Medicaid in one of the different geographic jurisdictions.
UPIC audits are usually triggered by statistical analysis of hospice claims and billing data that identifies anomalies in in a hospice agency’s billing. Factors that often lead to a hospice being targeted for a UPIC audit include:
UPIC audits are focused reviews. A UPIC will request medical records and conduct interviews to determine whether fraud has occurred.. The UPIC’s audit process typically consists of a detailed review of the hospice’s records to confirm all Medicare billings. A UPIC auditor’s activities may be varied and may extend well beyond a review of medical records and documentation including activities such as:
A UPIC audit will typically begin with a letter requesting submission of documents – typically within 30 days but sometimes within 15 days. Most UPICs will agree to an extension of time for document submission.
A hospice agency should carefully review the nature of the request. Is the UPIC only requesting administrative and claims related medical records or is the UPIC also requesting documentation relating to the hospice agency’s business practices?
If the UPIC requests information about the hospice agency’s business practices or business relationships – such as its referral sources – this may indicate that the UPIC received information that the hospice agency is engaged in questionable business practices. If the UPIC identifies improper practices, the hospice agency will be referred to the Office of the Inspector General (OIG) or Department of Justice (DOJ).
If the UPIC only reviews claims and the associated medical or billing records, then there are typically two cases:
UPICs also conduct unannounced office visits to hospice agencies. If an office visit occurs, the UPIC will arrive at the office site with written request for patient medical records. They will also interview patients and hospice agency workers.
A UPIC audit may result in payment suspension if there are findings that indicate the existence of overpayment, incorrect billing, or fraud.
When a hospice agency is faced with payment suspension, it may follow the standard Medicare appeals process. Legal counsel may be helpful in guiding a hospice agency regarding rights as applied to recoupment and claims withholding.
Payment suspension sometimes occurs without prior notice to the hospice agency. If the agency receives prior notice, it has 15 days to rebut. The UPIC must respond within 15 days of receiving the rebuttal. CMS then determines if the suspension should be removed. In most cases, the suspension remains in place.
Initial payment suspension can last up to 180 days with two unappealable 180 day extension periods.
A hospice may continue to provide services and submit claims while payments are suspended. During the suspension period, payments are not made to the hospice. Instead, payments are made to an escrow account that is managed by the UPIC.
If overpayments are identified, they are taken from the escrow account. The balance remaining in the escrow account is returned to the hospice agency once the audit is completed.
If the UPIC identifies any fraudulent behavior, the activity is referred to the Department of Justice (DOJ) or to the Office of Inspector General (OIG).
A hospice agency may appeal overpayments identified by the UPIC through the Medicare administrative appeals process.
By increasing their compliance efforts and activities, hospice agencies can prevent UPICs and decrease the chance of a negative outcome from a UPIC audit. More specifically,
A Targeted Probe and Educate (TPE) is an audit program that was rolled out by CMS in 2017. The stated goal of this program is to help providers reduce claim denials and appeals. The TPE works to achieve its goal by educating providers in topics that will help to eliminate common mistakes that lead to recoupment of Medicare payments.
Through the TPE program, CMS (through the MAC) works directly with the hospice agency to identify errors and
TPE audits are not random spot checks. They are targeted audits. A hospice is identified based upon MAC data analysis or claim review. A hospice with high error rates or unusual billing practices may also be selected for a TPE. TPEs often focus on items with high national error rates. TPEs also focus on items that pose financial risk to Medicare.
TPEs target hospice agencies that fall within these identified risk categories. A hospice agency that is compliant with Medicare policies and billing practices will not be selected for a TPE.
The TPE audit process begins with a Notification Letter sent from the MAC to the hospice agency. The Notification Letter explains the TPE program and informs the hospice agency that it has been selected for a TPE audit. It also explains the reason that the agency was included in the TPE and advises that an additional documentation request (ADR) is forthcoming. No response to the Notification Letter is required.
The ADR arrives following the Notification Letter. The ADR includes a list of 20-40 claims for which medical records and documentation supporting the claims are requested. This is considered Round 1. The hospice agency must submit the requested documentation.
The MAC reviews the documentation supporting the 20-40 claims to determine if the documentation supports the claims that were submitted.
If the hospice agency is deemed compliant (“no unfavorable findings”) after review of the documents submitted in response to the ADR in round 1,
If there are unfavorable findings (issues are noted):
The hospice should participate in the one-on-one education. This education provides the hospice agency with an opportunity to speak directly with the auditor and discuss the errors identified. During these sessions, the MAC guides the hospice agency through error correction. Following the education there is a 45 day period for the hospice to make improvements (e.g., system improvements, process improvements) before another TPE review by the MAC. If the MAC is satisfied that the errors have been corrected, the audit is closed. However, if more errors are identified the hospice agency will be entered into another audit round.
A second ADR is sent requesting another 20-40 claims. The hospice agency submits the documentation which is again reviewed by the auditor. The process followed in TPE Round 1 repeats. If there are unfavorable findings, the TPE advances to Round 3.
A third ADR is sent requesting another 20-40 claims. If there are still unfavorable findings in Round 3, the hospice agency is referred to CMS for next steps including:
During the TPE audit, the MAC is looking for billing mistakes that cause hospice agencies to be non-compliant with regulations. The most common problem identified during a TPE audit is that the documentation does not support terminal prognosis of six months or less.
If a hospice agency disagrees with the audit findings, the agency can appeal the results through the Medical Appeals Process. The hospice agency will need to request a redetermination of overpayment by the MAC.