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Proposed Medicare cuts add to already-challenging audit and payment landscape for hospice providers

While facing the unprecedented challenges of the COVID-19 pandemic, hospice and home health providers also continue to weather a deluge of audits and recoupments from CMS contractors. In particular, Unified Program Integrity Contractors (UPICs) target providers for alleged fraud and then charge those providers with multimillion-dollar overpayments extrapolated from data mining. Now adding to these challenges, the Medicare Payment Advisory Commission, an independent agency which advises Congress on Medicare reimbursement issues, has recommended a 20% cut in Medicare’s annual per-patient payment limit, or “aggregate cap,” for hospice providers. The hospice aggregate cap is currently just over $31,000. If a hospice provider’s annual Medicare payments divided by the number of beneficiaries exceed the cap amount, the facility must repay the excess payments. The Commission is also recommending a 5% pay cut for home health agencies, nursing homes and inpatient rehabilitation facilities. These cuts, if adopted by Congress, could have devastating effects on hospice providers, in particular, that are already operating on very tight margins.

Hospice and home health providers should continue to operate robust compliance programs and conduct internal audits to ensure they are billing Medicare correctly and maintaining the required documentation. These providers should also be on the lookout for audit requests from UPICs (CoventBridge, SafeGuard and Qlarant) and not confuse these with routine payor audits. UPIC audits can lead to multimillion-dollar extrapolated overpayments and referrals to OIG or the Department of Justice for investigations of potential fraud. Any hospice or home health provider receiving an audit request from a UPIC should proceed with extreme care and make sure to provide complete and pristine medical records in response to the request.   

Ultimately, Congress will determine if these payment cuts proceed. Therefore it is critically important for hospice and home health providers to voice their concerns directly with their representatives in Congress, as well as elected officials who serve on congressional Medicare oversight committees.


Special thanks to Jon Rawlson of Armory Hill Advocates for his contributions to this post.

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Jennifer Weaver
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