Our previous installments, Strategic Hospice Revenue Cycle Management and Hospice Billing: How to Build a Clean-Claim Process, established that a healthy revenue cycle is the engine that allows an agency to maintain stability and focus on its clinical mission. However, hospice leadership typically focus more heavily on clinical delivery rather than the financial aspects of the agency. The connection between daily administrative tasks and long-term financial health can sometimes be difficult to see.
Many leaders find that their month-end feels like a period of high volatility rather than a repeatable operating process. To shift to a more predictible financial stance, leadership must transition from merely monitoring bank balances to auditing the upstream processes that dictate the agency’s cash flow.
Hospice leadership to not need to be a billing experts to lead a successful agency. However, it is essential to have a solid understanding of the operational triggers that dictate the agency’s cash flow. To gain an understanding of the agency’s health and whether the agency is running a disciplined or reactive process, leadership can use these seven questions in the next meeting with the revenue cycle manager.
1. The “First-Pass” Health Check
The Question:“What is our first-pass clean claim rate over the last 90 days, and what are the primary reasons for failure?”
Why it matters: A “first-pass” claim is one that is paid by Medicare the very first time the agency submits it. In a healthy agency, this should be above 95%. A high first-pass rate indicates that the intake and clinical teams are providing the billing office with clean, validated data. If the first-pass rate is low, it means the billing team is spending more time “fixing” old errors than processing new revenue. A low first-pass rate means that the billing team is spending more time reworking old claims and fixing old mistakes than processing new revenue.
Leadership needs to know why claims are failing. Is it because intake forms are missing signatures? Is it because the clinical notes don’t match the billing dates? This question tells leadership which department – Intake, Clinical, or Billing – needs more training.
2. The NOE Revenue Leak
The Question:“How many non-covered days did we incur last month due to late or returned NOEs, and what was the specific dollar impact?”
Why it matters: The Notice of Election (NOE) is the most time-sensitive document in hospice. An agency has exactly five calendar days from a patient’s admission to notify Medicare. If the agency misses that window, or if the agency submits it with an error and has to resubmit it late, Medicare will simply refuse to pay for the days the agency cared for the patient prior to the NOE submission date. This is not a “delayed” payment; it is lost revenue that can never be recovered. Thus, unlike most billing errors, Notice of Election (NOE) failures typically result in permanent losses, i.e., “non-reportable” days where care was provided but cannot be reimbursed.
Tracking the dollar amount of these “non-covered days” is the fastest way to see if the agency’s intake process is disciplined. Quantifying the non-covered days in dollars transforms a “paperwork issue” into a tangible loss that requires immediate leadership intervention.
3. Sequential Discipline
The Question:“Are we experiencing out-of-sequence rejections, and if so, what is the root cause?”
Why it matters: Hospice billing is linear. Medicare processes hospice claims in a strict chronological order. An agency cannot successfully bill for a patient’s February services until the patient’s January claim has been processed and paid. This is known as sequential billing. One unclosed transfer, discharge, or revocation can halt the entire chain of claims for a patient.
Sequencing issues usually point to a breakdown in communication between field staff and the office, indicating that patient statuses are not being updated in the EMR in real-time.
If a patient’s status changes – such as a transfer from another agency, a discharge, or a readmission – the paperwork must be finalized in the system with perfect accuracy. If a single status update is forgotten or entered incorrectly, it creates a billing stoppage. Every subsequent month of revenue for that patient is held in “suspense” by Medicare until the prior month is resolved. This question reveals whether the agency’s clinical and office staff are communicating patient status changes in real-time, or if the agency’s billing department is constantly waiting on clinical data to “unlock” the next month’s cash flow.
4. The Eligibility Safety Net
The Question:“What is our 30-day forward-looking tracker for recertifications and Face-to-Face (F2F) deadlines?”
Why it matters: To keep a patient on hospice, a physician must certify their eligibility at specific intervals. For some of these, a “Face-to-Face” visit is legally required. If that visit happens even one day late, the patient’s eligibility is voided for that period, and the claim will be denied. These are unnecessary and preventable revenue lossses.
Hospice leadership should ensure that the team isn’t just reacting to missed deadlines. Instead, the team should be actively managing a calendar of upcoming recertification requirements – proactively tracking patients with upcoming recertifications – to ensure no patient “falls out of compliance.”
5. “Return to Provider” (RTP) Velocity
The Question:“What is our average ‘Time to Correct’ for claims that are Returned to Provider (RTP)?”
Why it matters: Claims are often returned for small technical errors (like a misspelled name or an incorrect ZIP code). While the error might be minor, the impact on cash flow is major. If it takes the billing team five days to notice and fix an error, the agency has effectively added five days to its “Days in AR” (the time it takes to get paid). To keep cash moving, high-performing teams aim to correct and resubmit RTPs within 24–48 hours. A high “time to correct” often indicates that the billing team lacks the necessary support from clinical leadership to resolve documentation gaps.
6. Handoff Accountability
The Question:“If you could fix one upstream process – Intake, Clinical, or Medical Director workflows – to reduce rework, which would it be?”
Why it matters: The answer to this important question gives significant insight into where “administrative friction” can be slowing down a hospice agency’s money. Billing managers often see the “symptoms” of problems that start elsewhere. For example, if the billing manager says they spend hours chasing doctors for signatures, the problem isn’t the billing – it’s the physician’s workflow.
This question breaks down operational silos. It gives the revenue cycle manager permission to identify where “dirty data” originates. Often, a minor adjustment to an admission packet or how a Medical Director receives prompts can eliminate 50% of the billing team’s manual labor.
7. The Close Process
The Question:“What is our documented ‘Month-End Close’ checklist and who owns the accountability for each handoff?”
Why it matters: The “Month-End Close” is the process of finalizing all clinical and financial data so the bills can go out. If clinical notes aren’t finished on time, the biller can’t bill. If the biller is waiting on the director to approve a report, the biller can’t bill. A clear, written checklist ensures that everyone knows their role and how it contributes to the agency’s overall ability to bill on time. Hospice leadership owns the accountability for ensuring that the clinical staff doesn’t treat documentation as an “optional” task; such an approach to documentation can delay the entire agency’s payroll and vendor payments.
When the month-end process is a mystery to everyone but the billing team, the result is process uncertainty and cash flow volatility. A disciplined system relies on a written checklist that defines when clinical notes are due, when statuses must be closed, and when the pre-bill review occurs. Accountability ensures the billing team isn’t held responsible for a clinical manager’s late paperwork.
Why This Matters for Hospice Leadership
By moving from a “scramble” to a “system,” hospice leadership protects the agency’s ability to serve patients. When the revenue cycle is predictable, leadership can stop worrying about whether payroll can be met and can start focusing on the quality of the end-of-life care that the team provides.
In our first installment on Revenue Cycle Management (RCM) – Silent Killers of Hospice Cash Flow (and How to Fix Them) – we discussed why consistent working capital is the foundation of an agency’s operational stability. It impacts staffing levels, vendor relationships, and the leadership’s ability to focus on the clinical mission.
This second installment investigates the “micro-leaks” that disrupt that stability. In hospice, financial volatility rarely stems from a single catastrophic error. More often, it is the result of repeatable administrative defects: claim rejections, late Notice of Election (NOE) filings, and chronic rework that causes accounts to sit unpaid for months.
The Anatomy of a “Clean Claim”
A clean claim is a submission that is reimbursed on the first attempt. Achieving a high first-pass pay rate is not the result of a billing team working overtime at month-end; it is the product of a repeatable system. It requires that every claim is built on accurate election documentation, verified coverage mechanics, and clinically supported eligibility before it ever reaches the billing office.
Most “dirty claims” are caused by three predictable upstream breakdowns:
Incomplete Election Packets: Missing signatures or dates that stall the billing process.
Technical NOE Failures: NOEs that are rejected (RTP) due to data entry errors, pushing the filing past the five-day window.
Sequencing Conflicts: Out-of-order billing cycles caused by uncoordinated patient transfers or discharges.
Establishing Operational Guardrails: The Three Control Points
High-performing agencies do not view billing as a back-office function that happens at the end of the month. Instead, they treat the revenue cycle as a continuous relay where each department is responsible for “passing a clean baton.” To achieve this, leadership must implement specific control points – operational “gates” that stop administrative defects before they can cascade into financial losses.
1. The Intake Gate: Securing the Revenue Foundation
The revenue cycle begins the moment a patient is referred, but the most common “micro-leaks” occur during the handoff from intake to billing. If a patient is admitted with an incomplete election packet, the agency is effectively providing care without a secured promise of reimbursement.
The Leadership Mandate: Leadership must move beyond a “get it in eventually” mindset and establish a Hard Stop Policy. This means defining exactly what constitutes a “Complete Admission.” If a signature is missing or the Notice of Election (NOE) has not been initiated within 24 hours of admission, the process should be flagged for immediate intervention. By treating the intake gate as a non-negotiable requirement, you ensure that 100% of your census is backed by an accepted NOE within the 48-hour window.
2. The Eligibility Gate: Synchronizing Clinical and Financial Data
Hospice is unique because its reimbursement is tied to strict clinical timelines, such as Face-to-Face (F2F) encounters and benefit period recertifications. In many agencies, these clinical requirements are tracked in a silo, only surfacing as a “billing problem” when a claim is held at month-end.
The Leadership Mandate: To protect audit integrity, leadership must insist on a centralized, real-time tracking system that bridges the gap between clinical operations and the billing office. This gate ensures that every patient approaching a certification deadline has a confirmed visit scheduled and a physician signature pending. When clinical leadership and billing work in a synchronized operating rhythm, you eliminate the month-end scramble.
3. The Submission Gate: The Final Quality Review
The final control point occurs just before the claim is transmitted to Medicare. This is the Pre-Bill Review, a methodical check designed to catch “out-of-sequence” errors that frequently lead to Returned to Provider (RTP) status.
The Leadership Mandate: Mandate a “double-check” protocol. The individual responsible for the final submission should verify that the claim sequence is intact and that all discharges or transfers from the prior month have been closed cleanly in the system. By catching technical errors here, rather than waiting for a Medicare rejection, you ensure a steady, predictable flow of cash.
Operational Control Summary
Use the following framework to evaluate your internal discipline and identify where your current “gates” may be failing:
Control Point
Leadership Requirement
Weekly KPI Metric
Intake/Admission
Formal definition of a “complete” packet.
Active patients without an accepted NOE.
Eligibility
Single owner for F2F and Recert tracking.
Patients with deadlines in the next 15 days.
Submission
Mandatory pre-bill sequence check.
Percentage of claims requiring resubmission.
Executive Questions for the Billing Manager
You do not need to be a billing expert to lead the revenue cycle but you do need to ask the right questions to determine if you have a stable system or a constant scramble:
On Performance: What is our “first-pass clean claim rate” for the last 90 days, and what are the top three reasons for rejection?
On NOEs: How many non-payable days did we incur last month due to late or returned NOEs?
On Sequencing: What is the root cause of our out-of-sequence issues? (Is it intake, discharge workflow, or claim timing?)
On Prevention: If you could fix one upstream process to reduce your team’s rework by 50%, which one would it be?
The Result: Predictable Cash Flow
Clean claims are not a “billing achievement”; they are the result of leadership decisions and enforced operating discipline. When NOE acceptance is reviewed daily and eligibility is tracked proactively, avoidable denials drop, and the agency moves toward a truly predictable operating rhythm.
No hospice leader enters this field because they love claims and remittances. Their focus is not hospice cash flow optimization. Hospice leadership’s goal is to ensure a dignified end-of-life journey for patients and families. They work to build an organization that can reliably deliver compassionate care, 24/7, without “behind the scenes” chaos.
However, the operational reality is simple: Clinical excellence requires financial oxygen. Even agencies with a strong census and elite clinical teams can be squeezed by delayed claims, avoidable denials, and a collections process that is only “handled when we have time.” When the revenue cycle lags, it isn’t just a billing issue; it is a threat to the agency’s staffing stability, vendor relationships, and ultimately, the patient experience.
The operational reality is that hospice revenue cycle management is the engine that keeps care moving. This blog is the first in a series designed for hospice leadership who want to move their financial operations from a state of constant triage to a predictable operating rhythm.
The Three Pillars of Hospice Financial KPIs for Leadership
To achieve true hospice cash flow optimization, leadership must move from a reactive to a proactive stance. Confusion in the revenue cycle often stems from a lack of accountability. To effectively manage the pipeline, leadership must distinguish between three distinct functions:
Billing (Accuracy & Compliance): The front-end process of generating clean claims. This includes timely filing of the Notice of Election (NOE). In hospice, a late NOE isn’t just a delay. It can result in non-payable days that can never be recovered.
Collections (Velocity and Resolution): The engine that turns claims into cash. This involves payer-facing follow-up: resolving rejections, correcting errors, and appealing denials. It is not about calling families; it is about holding insurance providers accountable.
Accounts Receivable Management (Visibility and Strategy): The dashboard used to monitor the money the agency has earned but not yet received. Effective AR management allows leadership to see if the agency is waiting on payers or if the team is waiting on itself.
Proactive vs. Reactive Operations
A healthy hospice agency doesn’t just “bill;” it runs a disciplined cycle. The table below can be used to evaluate where an agency currently stands:
Phase
Reactive Agency (At-Risk)
Proactive Agency (High-Performing)
Intake & Election
NOEs filed near the 5-day deadline; high risk of non-payment.
NOEs filed within 24–48 hours; zero “non-payable” days.
Documentation
Clinicians chasing signatures for 30-day-old claims.
“Done in a Day” culture; documentation billing-ready in 72 hours.
Payer Follow-up
Working the “loudest” payer or only the oldest claims.
Automated work queues prioritizing high-dollar and high-probability claims.
Leadership Review
Reviewing AR only when the bank balance feels “tight.”
Weekly KPI reviews that predict cash flow 30 days out.
End Result
Constant Triage: Staff is burnt out and cash is unpredictable.
The biggest threats to an agency usually aren’t dramatic disasters. They are repeatable breakdowns that quietly drain agency bandwidth:
Stalled Clinical Handoffs: A lack of “billing-ready” documentation at the point of care is a primary driver of aging AR. When the billing team is faced with clinical documentation integrity concerns leaving them unable to process a claim due to missing elements, the task is sent back to the clinician. This not only delays payment but also increases the administrative overhead per patient, as the same chart must be touched multiple times before it can be finalized
Preventable Technical Denials: The 5-day filing window for the Notice of Election (NOE) is a critical compliance threshold. If the intake process is not airtight, the agency effectively provides unreimbursable care. These technical denials represent a permanent loss of revenue that cannot be recovered through the appeals process, directly impacting the agency’s bottom line.
Unapplied Cash and Posting Delays: When payments are received but not timely reconciled within the billing system, the accounts receivable data becomes distorted. This “hidden” AR leads leadership to make strategic decisions based on inaccurate financial reports, often resulting in the team chasing resolved items while legitimate denials remain unaddressed.
Unmonitored Medicare Cap Liability: Without a proactive monthly monitoring process, the aggregate cap can become a significant, unforeseen year-end liability. Failing to track the relationship between patient stays and reimbursement levels can lead to a repayment demand that exceeds the agency’s available margins, threatening long-term operational stability.
What “Good” Looks Like: Making RCM Boring
In hospice revenue cycle management, the goal is not heroics. It is predictability. “Good” looks like a billing cadence that is “boring” in the best possible way. It means the work is driven by repeatable, auditable habits rather than last-minute scrambles. When the revenue cycle is boring, leadership meetings can focus on growth and quality rather than “Where is the cash?”
The Executive Dashboard That Leadership Should Trust
Hospice leadership does not need to be a billing experts but they do need a credible set of numbers. Every hospice leader should have weekly visibility into:
Days in AR: Is the agency getting paid faster or slower than last month?
The 90-Day Bucket: What percentage of money is drifting toward a write-off?
Clean Claim Rate: How often is billing right the first time?
Time to Bill: How many days pass between the end of the month and the first claim submission?
Five Actions Leadership Can Immediately Take
Improving the agency’s revenue cycle does not require a total overhaul. Leadership can take action to increase visibility and control starting today:
Designate One Owner: Assign a single individual to own the end-to-end pipeline from “Admission to Cash.”
Audit the Aging: Pull a one-page AR report by payer. If AR over 90 days is >15%, there is likely a process breakdown.
Identify Top 3 Drivers: Ask the team: “What are the three most common reasons claims are being rejected right now?”
Set a “Touch” Rule: Implement a rule that any claim over 45 days must be touched and documented weekly until resolved.
Schedule a 30-Minute Rhythm: Schedule a weekly revenue cycle review. Focus on patterns and removing blockers for the team.
Financial stability is the foundation of compassionate care. By moving from a reactive to a proactive revenue cycle, leadership can ensure that the agency’s focus remains exactly where it belongs: on the patient.
Many hospice administrators are familiar with the hospice PEPPER report. A smaller number of hospice leaders, however, are familiar with its counterpart: the Comparative Billing Report (CBR) and eCBR, the electronic version of the Comparative Billing Report. While the PEPPER provides a general overview of a hospice agency’s billing data, the CBR is a specific tool used by Medicare to identify individual agencies whose billing patterns differ significantly from their peers. To manage hospice compliance effectively, it is important to understand the purpose and the mechanics of the CBR.
What is a CBR and Who Generates It?
A CBR is a formal educational resource produced by CMS (the Centers for Medicare & Medicaid Services). It provides data-driven insights into a hospice agency’s billing patterns compared to state and national averages.
The report is a collaborative effort:
CMS: defines the metrics (like length of stay) used to monitor for billing errors.
National Contractors: CMS hires private companies to do the data analysis. CMS may hire different companies to handle the data work versus managing distribution of the reports to providers.
MACs (Medicare Administrative Contractors): An agency’s local contractor (like Palmetto GBA, CGS, or NGS) may also provide their own version, called an eCBR, through their provider portal.
How the CBR Highlights Outliers
The CBR is a proactive tool designed to encourage providers to review their own data before a formal audit occurs. It identifies “outliers” – agencies that fall outside of normal billing ranges – by following a simple comparison process:
“Finding your Neighbors”: Instead of comparing a small local hospice to a massive national chain, the CBR groups each hospice agency with similar agencies. An agency’s data is compared against other hospices in their specific state. This ensures the comparison is fair and based on the local market.
The 1-to-100 Ranking: For each metric that is measured, the report provides the agency’s “percentile” score, ranking the agency on a scale from 1 to 100.
Imagine 100 hospices are standing in a line, ordered from the lowest billing to the highest.
If an agency’s CBR report indicates that the agency is in the 90th percentile, it means that the agency is billing more than 90 of the other hospices.
This is why the 90th percentile is the “red flag” area; it tells Medicare that the agency is at the very edge of the pack.
Clear Results There is no need to be a trained statistician to read or interpret the CBR report. The report uses clear labels:
Significantly Higher: This is the primary “outlier” signal. It indicates that the agency’s billing for a specific metric is in the top 10% (90%th percentile) of all providers. While not proof of wrongdoing, it is a high-priority “red flag” that warrants an immediate internal review of patient charts.
Higher: The agency is billing more than the average hospice. This is a signal to monitor the trend to ensure it does not move toward the 90th percentile.
Does Not Exceed: The agency’s billing is aligned with or lower than the average of its peers.
Not Applicable (N/A): The agency did not have enough claims in that category during the reporting period to create a statistically valid comparison.
Real-World Metric Examples
Each CBR focuses on a narrow “Target Area” of vulnerability. Two common examples for hospices include:
Non-Cancer Length of Stay (NCLOS) > 210 Days: Comparing the agency’s percentage of long-stay non-cancer patients against jurisdiction benchmarks.
GIP Average Length of Stay (ALOS): Benchmarking the agency’s inpatient stays (Q5004–Q5009) against state averages to identify potential overutilization.
How CBR Differs from PEPPER
It is helpful to view these two reports as different tools for the same goal:
Feature
PEPPER
CBR / eCBR
Primary Intent
Provides a broad risk profile across many areas at once.
Focuses on a specific billing trend with educational detail.
Result
A list of scores for 12+ different categories.
A specific label like “Significantly Higher” for one area.
Comparison
National, MAC, and State averages.
Usually State, Region, and Jurisdiction National averages.
Converting Comparative Data into Operational Action
The value of these reports lies in the establishment of a functional loop that transforms comparative data into focused action. Hospice leadership should treat PEPPER and CBR/eCBR results as signals tied to specific topics and timeframes. By comparing results against national or state benchmarks, leadership can determine whether a specific billing pattern requires continued monitoring or a formal investigation.
Determining the Response: Monitor vs. Investigate
A hospice agency that appears as a statistical outlier should view the data as a prompt for a focused internal review rather than evidence of an error. The Hospice PEPPER User’s Guide clarifies that these reports do not identify improper payments directly; instead, they serve as guides for auditing and monitoring billing changes over time. When a hospice agency looks materially different from its peers – particularly when that difference persists across multiple quarters – leadership should initiate a targeted investigation.
Maintaining a Narrow Scope
If an investigation is necessary, the review should remain strictly tied to the specific topic that triggered the signal. Effective hospice leadership avoids broad “audit everything” exercises in favor of targeted analysis:
Length of Stay (LOS) > 210 Days: The agency should review the long-stay patient population and the documentation patterns driving extended care.
GIP Average Length of Stay (ALOS): Leadership should focus on General Inpatient stays, discharge transitions, and the specific documentation supporting those inpatient days.
Closing the Loop
To finalize the process, the hospice agency must document the scope of the review, the specific findings, and any subsequent process changes. Re-checking the trend in the following cycle ensures these reports become a permanent part of the agency’s operating rhythm. CMS and MACs intend for these tools to function as educational resources that support a self-audit culture within the hospice organization.
Summary: Key Takeaways for Hospice Leadership
Effective compliance management requires utilizing both the PEPPER and the CBR as complementary tools for agency oversight. While the PEPPER serves as a broad indicator across many categories, the CBR functions as a targeted tool for identifying specific billing trends that may require immediate attention.
Hospice leadership should prioritize internal reviews for any metric labeled “Significantly Higher” or landing in the 90th percentile, as these results indicate the agency is a statistical outlier compared to its peers. By conducting narrow, focused chart audits based on these specific signals and documenting the findings within the QAPI process, a hospice agency can demonstrate a proactive approach to billing accuracy. Ultimately, treating the CBR as an educational resource rather than a threat allows leadership to refine workflows and improve documentation standards before external audits are initiated.
Hospice agencies are under increasing scrutiny by government auditors. A particularly concerning and financially devastating aspect of government audits is the use of statistical extrapolation. Understanding the extrapolation process is essential for providers to safeguard the financial healthof their agencies and ensure compliance with all regulations.
What is Government Extrapolation in Hospice Audits?
Extrapolation is a statistical methodology used by auditors, particularly the Office of Inspector General (OIG). Extrapolation can significantly amplify the financial implications of audit findings. The process of extrapolation is governed by the Medicare Program Integrity Manual, Chapter 8. This chapter of the manual outlines the specific statistical methods and requirements for conducting extrapolation studies.
What is Extrapolation?
Extrapolation is a sampling technique used to project audit findings from a small sample of claims to an entire population of claims. Instead of reviewing every single claim that a hospice has submitted for payment, auditors select a statistically valid sample for review. They then use the error rate found in the sample to estimate overpayments across all similar claims in the population. This allows auditors to perform a detailed review of only a small sample of claims while estimating the total amount of improper claims across a large population.
Auditing every single claim in the population is impractical due to time and resource constraints. By examining a representative sample, auditors can make statistically valid projections about a much larger group of claims without having to review each one individually.
How Does the Extrapolation Process Work?
The extrapolation process typically follows the following key phases:
Universe Definition:
Auditors define the “universe” or population of claims to be examined. This may be all Medicare hospice claims submitted by your agency within a specific period (e.g., all claims billed between January 1, 2024, and December 31, 2024) or a subset of claims (e.g., all General Inpatient Care claims).
Sample Selection:
Using statistical sampling software, auditors select a statistically valid random sample from the universe. The term “statistically valid” is significant because it ensures that the sample accurately represents the entire population. This allows for reliable projections from the sample to the larger group. The industry standard software used to support sample creation is called RAT STATS (created by the OIG for the U.S. Department of Health and Human Services). Typically, samples consist of 100 claims, though this can vary.
Medical Review:
Each claim in the sample is rigorously reviewed by independent medical contractors who determine whether the services provided met Medicare requirements for hospice eligibility and documentation. The auditors review the documentation for compliance with Medicare regulations, including patient eligibility, physician certifications, medical necessity for services, and appropriate billing for levels of care. Any claim found to be out of compliance is identified as an “error,” and the precise dollar amount of the overpayment for that specific claim is calculated.
Calculation of Error Rate:
A monetary error rate is determined for the sample. This is calculated by dividing the total dollar amount of improper payments found in the sample by the total dollar amount of payments for all claims in the sample.
Extrapolating to the Universe/Statistical Projection:
The calculated monetary error rate from the sample is applied to the entire “universe” of claims. This projects the estimated total overpayment across all claims in the defined audit scope. The estimated total overpayment is calculated as the monetary error rate of the sample multiplied by the total dollar paid for the audit universe.
How Does Extrapolation Impact a Hospice Agency?
Extrapolation can have a significant financial impact on hospice agencies. Even a small number of denied claims or identified overpayments in a sample can result in a large demand for repayment. This can pose a severe financial challenge. Further, responding to an extrapolated audit can pose a significant administrative burden on hospice agencies, requiring considerable time and resources from administrative and compliance teams.
Additionally, OIG audit findings are often publicly released. This raises concerns about agency reputational risk and may jeopardize relationships with referral sources and the community. An adverse extrapolated audit outcome can also lead to increased scrutiny in future audits and potentially trigger further investigative actions.
Mitigating Extrapolation Risk
Given these potential significant negative impacts of extrapolation, hospice agencies should consider proactive actions that could help mitigate the likelihood of negative audit findings. The most effective actions include:
Robust Compliance Program: Agencies should implement and strictly adhere to a comprehensive compliance program. This includes continuous staff education on Medicare regulations, thorough patient eligibility assessments, diligent documentation of physician certifications, and accurate coding for all levels of care.
Internal Auditing: Conduct regular, proactive internal audits of claims and medical records. Focus on high-risk areas identified by Medicare (e.g., General Inpatient Care (GIP) stays, long lengths of stay, live discharges). Identifying and correcting deficiencies internally before an external audit is crucial.
Looking Ahead
Government extrapolation in hospice audits represents a significant financial risk for hospice agencies. Understanding the statistical methodologies, maintaining excellent documentation practices, and implementing robust compliance programs are essential for surviving in this challenging regulatory environment.
A hospice election statement is a condition of payment under Medicare. For a patient to be eligible to receive hospice services under the Medicare benefit, the patient or the patient’s authorized representative must elect hospice care by signing a hospice election statement. While Medicare provides a model of this form, each hospice agency is free to design their own hospice election form. However, there are some required elements, as specified by Medicare. To find out more details about the hospice election statement, read more at our blog post here: What is the Hospice Election Statement requirement?
Why is the hospice election statement important?
An invalid hospice election statement can impact payment for the entire patient hospice stay. There has been a recent rise in denials related to the election form. As such, it is important for hospice agencies to ensure that all required elements are present on the form and that the forms are completed accurately.
What are are tips for avoiding common hospice election form denials?
Tip 1: Use the model election form provided by CMS or stick to something very close to it. This will ensure that no critical elements are missed. CMS has provided a model hospice election form. Hospice agencies are not required to use this model form; they may design their own election form.
Tip 2: Focus on the purpose of the document and stick with the required elements, Over the years, hospices have had a tendency to add to their election forms so that it has been moving away from its original legal intent. While it is good to provide patients with additional information, the election form may not be the appropriate place to provide this information. By adding information to the election statement, there is a risk that upon audit contractors may find fault with aspects of the document that are not part of Medicare’s required elements of the election statement. In other situations, contractors missed the election statement since it was buried in a such a long document.
Tip 3: build in redundancy in the elements of the elements of the hospice election statement. Use the admission material to build in redundancy of the required elements of the hospice election statement. That is, the required elements can be included in the election statement but some of the election statements which, for example, are acknowledgement statements, can be included in other admission material that is provided to the patient on admission. This could be helpful to defend potential claim denials or invalid denials in case of audit.
Tip 4: Reduce the possibility of errors in completing the forms, by stressing the importance of the forms, creating standardized processes, and leveraging technology. Reduce human error by ensuring that the individuals responsible for completing the documents understand their importance. Human error is the biggest problem with properly completing the hospice election statement form. Create processes to double check the forms – in real time. Leverage technology, where possible, to eliminate the possibility of errors or to detect errors.
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__utmc
Used only with old Urchin versions of Google Analytics and not with GA.js. Was used to distinguish between new sessions and visits at the end of a session.
End of session (browser)
__utmz
Contains information about the traffic source or campaign that directed user to the website. The cookie is set when the GA.js javascript is loaded and updated when data is sent to the Google Anaytics server
6 months after last activity
_gac_
Contains information related to marketing campaigns of the user. These are shared with Google AdWords / Google Ads when the Google Ads and Google Analytics accounts are linked together.
