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MassHealth Unnecessarily Paid for Durable Medical Equipment for Dual-Eligible Members.

During our audit period, MassHealth paid for dual-eligible members for durable medical equipment (DME) that was, or should have been, included in the members’ plans of care and therefore paid for by their hospice providers.

Table of Contents

Overview

During our audit period, MassHealth paid for dual-eligible members for durable medical equipment (DME) that was, or should have been, included in the members’ plans of care and therefore paid for by their hospice providers.

MassHealth Paid for DME That Was Included in Members’ Plans of Care.

During our audit period, MassHealth paid an estimated $65,727 in claims18 for DME that were unnecessary because the DME was included in the members’ plans of care and therefore should have been paid for by their hospice providers. In 10 of 100 sampled claims, MassHealth paid for DME, such as wheelchairs, incontinence products, and wound dressings, that was also included in the members’ plans of care. Since the DME was included in plans of care, it was already paid for by monthly Medicare reimbursements the hospice providers received and therefore should have been paid for by the hospice providers, not MassHealth. MassHealth could have used this money to provide additional services to MassHealth members.

Authoritative Guidance

The services covered by hospice programs are described in 42 CFR 418.202(f):

Medical appliances and supplies, including drugs and biologicals. . . . Appliances may include covered durable medical equipment . . . as well as other self-help and personal comfort items related to the palliation or management of the patient’s terminal illness. Equipment is provided by the hospice for use in the patient’s home while he or she is under hospice care. Medical supplies include those that are part of the written plan of care and that are for palliation and management of the terminal or related conditions.

According to Chapter 1395x(1861)(dd)(1) of Title 42 of the United States Code (USC), hospice providers are required to provide the following:

E.   Medical supplies (including drugs and biologicals) and the use of medical appliances, while under [a plan of care]. . . .

I.    any other item or service which is specified in the plan [of care] and for which payment may otherwise be made under this title.

Covered services under hospice are described in 130 CMR 437.423(G):

The hospice must provide and be responsible for all . . . durable medical equipment and medical supplies needed for the palliation and management of the terminal illness and related conditions, according to the member’s plan of care. . . . Durable medical equipment providers may bill MassHealth separately only for those services not related to the member’s terminal illness.

Further, 130 CMR 450.316 states that MassHealth must be the payer of last resort:

All providers must make diligent efforts to obtain payment first from other resources . . . so that the MassHealth agency will be the payer of last resort. The MassHealth agency will not pay a provider and will recover any payments to a provider if it determines that, among other things, the provider has not made such diligent efforts.

MassHealth Paid for DME That Should Have Been Included in Members’ Plans of Care.

For 87 of our 100 sampled claims, MassHealth paid an estimated total of $723,640 for DME19 that should have been, but was not, included in the members’ plans of care and paid for by their hospice providers. MassHealth could have used this money to provide additional services to other MassHealth members.

Authoritative Guidance

In Federal Register 83, No. 89 (2018), CMS states,

Hospice services are comprehensive and we have reiterated since 1983 that ‘‘virtually all’’ care needed by the terminally ill individual would be provided by hospice. We believe that it would be unusual and exceptional to see services provided outside of hospice for those individuals who are approaching the end of life.

In Federal Register 84, No. 151 (2019), CMS reiterated this point:

Our long-standing position [is] that services unrelated to the terminal illness and related conditions should be exceptional, unusual and rare given the comprehensive nature of the services covered under the Medicare hospice benefit.

The services covered under hospice programs are described in 42 CFR 418.202(f):

Medical appliances and supplies, including drugs and biologicals. . . . Appliances may include covered durable medical equipment . . . as well as other self-help and personal comfort items related to the palliation or management of the patient’s terminal illness. Equipment is provided by the hospice for use in the patient’s home while he or she is under hospice care. Medical supplies include those that are part of the written plan of care and that are for palliation and management of the terminal or related conditions.

According to 42 USC 1395x(1861)(dd)(1), hospice providers are required to provide the following:

E.   Medical supplies (including drugs and biologicals) and the use of medical appliances, while under [a plan of care]. . . .

I.    any other item or service which is specified in the plan [of care] and for which payment may otherwise be made under this title.

Covered services under hospice are described in 130 CMR 437.423(G):

The hospice must provide and be responsible for all drugs and durable medical equipment and medical supplies needed for the palliation and management of the terminal illness and related conditions, according to the member’s plan of care. . . . Pharmacy and durable medical equipment providers may bill MassHealth separately only for those services not related to the member’s terminal illness.

Further, 130 CMR 450.316 states that MassHealth must be the payer of last resort:

All providers must make diligent efforts to obtain payment first from other resources . . . so that the MassHealth agency will be the payer of last resort. The MassHealth agency will not pay a provider and will recover any payments to a provider if it determines that, among other things, the provider has not made such diligent efforts.

Reasons for Issues

Some hospice providers told us in interviews that regulations and guidance on what DME should be included in plans of care are unclear in some areas (see Other Matters). In addition, the information in MMIS that identifies dual-eligible members who have chosen to receive hospice services may not be accurate (see Finding 1), which would result in some of these claims not being appropriately screened before payment. For the members who were correctly identified in MMIS as having chosen to receive hospice services, the system edits in MMIS appear not to have been effective in detecting and rejecting all claims for hospice services that were, or should have been, included in members’ plans of care.

Recommendations

  1. MassHealth should ensure that information in MMIS about hospice election by dual-eligible members is accurate.
  2. MassHealth should ensure that the system edits in MMIS for claims for hospice services for dual-eligible members are effective in detecting and rejecting improper claims.

Auditee’s Response

EOHHS and MassHealth responded,

EOHHS disagrees with Finding 3a. The audit team provided 10 claims totaling $2,387 that fall under Audit Finding 3a, in which the auditors’ draft findings state that MassHealth paid an estimated $65,727 for DME that was included in members’ plans of care and therefore unnecessary. EOHHS‘s review of these claims revealed that 3 of the 10 were appropriately paid Medicare Crossover Claims (MassHealth Category 1). The remaining 7 claims fall into MassHealth Category 5 (Claims Payable if Unrelated to Terminal Illness), which would require additional information to determine whether the service was not related to the terminal illness; however, based on all information reviewed to date EOHHS has not identified any inappropriately paid claims. . . .

EOHHS disagrees with Finding 3b. The audit team identified 86 MassHealth non-hospice claims totaling $21,457 that fall under Audit Finding 3b, in which the auditors assert that MassHealth paid an estimated $723,640 for DME that should have been included in the members’ Medicare hospice plan of care. EOHHS‘s review of these claims revealed that all 86 claims were appropriately paid as further described above and as categorized as follows:

  • Category 1 (Medicare Crossover Claims): 11 Claims
  • Category 2 (HCBS Waiver Claims): 2 Claims
  • Category 3 (State Plan Services Unrelated to Hospice): 22 Claims
  • Category 5 (Claims Payable if Unrelated to Terminal Illness): 51

EOHHS further notes that the auditors cite as the basis for Finding 3b that “some hospice providers told us in interviews that regulations and guidance on what DME should be included in plans of care [are] unclear” and the auditors then refer to the “Other Matters” section of the audit in which they cite Medicare guidance on what is covered in the monthly rate Medicare pays to a hospice provider and what is to be included in the Medicare hospice plan of care. As discussed in further detail below in EOHHS’s response to the “Other Matters” section of the audit report, to the extent that providers of Medicare covered hospice services have confusion about what is within the scope of the monthly rate Medicare pays to Medicare providers of hospice services, that is a matter more appropriately addressed by Medicare, not EOHHS where EOHHS does not oversee the Medicare program nor establish the rates for Medicare covered hospice services.20

As previously stated in the introduction and EOHHS’ response to Audit finding 1, Audit Finding 2 and Audit Finding 3A, Medicare crossover claims, HCBS waiver claims, and claims for state plan services unrelated to hospice are appropriately payable claims. EOHHS therefore disagrees with the auditors’ finding that MassHealth paid $723,640 inappropriately. . . .

EOHHS agrees with [Recommendation 1]. As noted above in the Responses to Audit Recommendations for Finding 1, EOHHS is implementing processes to proactively identify dual-eligible members receiving Medicare covered hospice services who have not simultaneously executed a MassHealth hospice election form. . . .

EOHHS agrees with [Recommendation 2]. As noted above in the Responses to Audit Recommendations for Finding 1, EOHHS is implementing processes to proactively identify dual-eligible members receiving Medicare covered hospice services who have not simultaneously executed a MassHealth hospice election form. This process may result in additional MMIS system edits.

EOHHS further notes that MassHealth currently utilizes an MMIS edit (edit 2018) that effectively detects and rejects claims for MassHealth services related to hospice for all members receiving MassHealth covered Hospice services. Additionally, MassHealth requires a Member’s completion of a MassHealth hospice election form as a prerequisite for payment of MassHealth covered hospice services, which effectively ensures that hospice providers providing MassHealth covered hospice services submit the member’s MassHealth hospice election form.

Auditor’s Reply

Regarding Finding 3a, as noted above, we found that MassHealth paid an estimated $65,727 in claims for DME that were unnecessary because DME was included in the members’ plans of care and therefore should have been paid for by their hospice providers. Although they dispute this finding, EOHHS’s own analysis shows that the vast majority of these claims (at least 7 of the 10) should have been paid for by the hospices if the DME was related to the members’ terminal illnesses. Since the DME was included in the members’ plans of care based on a medical examination performed by the hospices’ interdisciplinary groups, it seemed clear to OSA that the DME was related to the members’ terminal illnesses and therefore should have been paid for by the hospices, not MassHealth. Further, MassHealth is not required to pay crossover claims for DME that is already included in a member’s plan of care; they should be paid for by the hospice provider.

Regarding Finding 3b, MassHealth also paid an estimated $723,640 for DME20 that should have been, but was not, included in the members’ plans of care. As noted in our report, CMS’s position, as stated in Federal Register 83, No. 89 (2018), is that “virtually all” care needed by a member should be provided by the hospice. Further, CMS states in Federal Register 84, No. 151 (2019), that services that are unrelated to a terminal illness should be “exceptional, unusual and rare” given the breadth of services that the Medicare hospice benefit allows. The DME claims in question were for items that were necessary for members’ wellbeing while they were receiving the hospice benefit, so we believe that according to CMS guidance, the items should have been included in the members’ plans of care and paid for by the hospices. In their response, EOHHS suggests that it should pay for claims that Medicare has expressly stated should be paid for by hospices or by Medicare. This statement directly conflicts with 130 CMR 450.316 which states that MassHealth must be the payer of last resort.

Based on its response, EOHHS is taking measures to address our concerns on this matter.

18.     We are 90% confident that the lower limit for DME is $27,639 and the upper limit is $103,815.

19.     We are 90% confident that the lower limit for DME is $665,146 and the upper limit is $782,134.

20.                Additionally, where MassHealth was not paying for the Medicare covered hospice services, to the extent providers of Medicare covered hospice services failed to maintain appropriate plans of care, this is a finding that may be more appropriately directed to Medicare.

21.     We are 90% confident that the lower limit for DME is $665,146 and the upper limit is $782,134.

Date published: July 20, 2021

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