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Department of Health and Human Services

Office of Inspector General -- AUDIT

"OPERATION RESTORE TRUST:  Review of Hospice Eligibility at the Hospice of Lake & Sumter, Inc.," (A-04-95-02110)

November 15, 1996

Complete Text of Report is available in PDF format (984K). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report provides the results of our audit of Medicare hospice beneficiary eligibility determinations at the Hospice of Lake & Sumter, Inc. (Lake & Sumter) in Tavares, Florida. This audit was part of a joint initiative among various Department of Health and Human Services components called Operation Restore Trust (ORT). The ORT seeks to identify specific vulnerabilities in the Medicare program and pursue ways to reduce Medicare exposure to abusive practices. The hospice audits focused on Medicare beneficiaries in hospice care for at least 210 days.

The objective of our review was to evaluate hospice eligibility determinations for beneficiaries in hospice care for more than 210 days. We also determined the amount of overpayments made to Lake & Sumter for those Medicare beneficiaries that did not meet Medicare reimbursement requirements.

Our review included a medical evaluation of Lake & Sumter's eligibility determinations for 147 beneficiaries who had been in hospice care for more than 210 days. The evaluations of the medical records showed that:

Medicare regulations state that an individual must be terminally ill with a life expectancy of 6 months or less in order to be eligible for hospice benefits. The regulations also require that the clinical records for each individual contain assessment information, a plan of care, pertinent medical histories, and complete documentation of all services and events.

Our audit was a limited review of the hospice operation. We did not review the hospice eligibility determinations for all Medicare beneficiaries who were or had been in the program. We limited our review to hospice beneficiaries with over 210 days of hospice coverage as of April 30, 1995 and who were still active in hospice or had been discharged for reasons other than death between the period January 1, 1993 and April 30, 1995. We offer no opinion nor have any conclusion on the accuracy of payments made to the hospice outside the scope of our audit.

We identified 147 Medicare beneficiaries who met the criteria of our audit scope. To place the scope of our audit (147 cases) in perspective, we offer the following comparisons:

Our medical determinations were made by physicians who were employed by or under contract to Florida Quality Assurance Inc., the Florida Medicare Peer Review Organization (PRO).

We believe the identified problems with the 71 beneficiaries occurred due to inaccurate prognoses of life expectancy by hospice physicians based on the medical evidence in the patients' files. For the 45 beneficiaries, we do not believe that sufficient evidence was present in the medical files to support the fact that the beneficiaries had a terminal illness. We believe these cases need to be further reviewed by the fiscal intermediary to ensure that providing Medicare hospice payments is appropriate. Lake & Sumter received Medicare payments totaling $4 million for the 71 ineligible beneficiaries and $2.5 million relating to 45 beneficiaries placed in the questionable category.