Hospices Climbing ‘Steeper Stairs’ as UPIC, TPE Audits Spike

Hospice program integrity has been in the spotlight for at least the past two years, often with high financial stakes for providers.

Unified Program Integrity Contractor (UPIC) and Targeted Probe and Educate (TPE) audits are designed to key regulatory safeguards against bad actors in the hospice industry. Both include oversight measures aimed at ensuring hospice program integrity, though each come with their own set of challenges for providers, according to legal experts.

But in terms of logistics and financial costs, these audits can become a heavy lift for some hospice providers, according to Meg Pekarske, partner at the law firm Husch Blackwell. For instance, UPICs are among the most expensive and significant audits for hospices to handle, Pekarske indicated.

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“The stairs are steeper in UPIC audits, which I think are some of the most serious and costly audits for hospices to deal with,” Pekarske told Hospice News.

Stakes around UPICs

The U.S. Centers for Medicare & Medicaid Services (CMS) contracts UPICs to investigate instances of suspected fraud, waste and abuse. UPIC auditors seek to prevent inappropriate payments from occurring, according to CMS.

These contractors initiated activities in 39 states during 2020, with hospice among the most common areas of focus, CMS reported. Other common targets were prescribers of opioids and general hospital services, among others.

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Various UPIC administrative actions are designed to recap savings for Medicare and Medicaid, including claims denials, payment suspensions, overpayment recovery, and in some cases provider revocations and deactivations or law enforcement referrals.

During 2020, UPIC post-payment reviews reclaimed $200.2 million in improper payments, according to the CMS report. This is a jump from the $113.6 million in FY 2019

But UPICs and hospice providers sometimes disagree on what constitutes an improper payment.

“The overpayment issues that result in millions for hospices can sometimes feel like a disconnect between data analysis and identifying problems around credible information,” Pekarske said. “To make real change in an efficient way, auditors must really understand what is important in hospice care. It’s bridging the auditors’ gaps in that knowledge and using regulatory resources efficiently without detriment to quality providers and hospice beneficiaries.”

The frequency of UPIC audits have surpassed those of other types in the hospice space during recent years, according to Bryan Nowicki, partner at Husch Blackwell. The law firm has seen greater numbers of these audits among its hospice clients, with some providers facing severe financial impacts, he said.

“In a typical year, we see three, four or five hospice audit matters in a month, but last year it was more than double that. And it just keeps increasing,” Nowicki told Hospice News. “The volume has definitely been there. UPICs really dominated our work over the past couple of years. Those were often high-stakes audits that involved claims data extrapolation and review of longer length of stay patients. Some of these got to million dollar amounts, it’s become pretty standard to see that.”

A recent study from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) found “wide unexplained disparities in program integrity activities across UPICs” during 2019 in both Medicare fee-for-service and Medicaid programs, even after adjusting for the size of their respective geographic oversight responsibilities.

For example, UPIC contractors conducted “substantially more Medicare fee-for-service program integrity work” that year compared to those for state Medicaid programs. This may have occurred because UPICs faced several challenges when it comes to Medicaid, including the availability of quality data and differences in state policies and regulations.

Nevertheless, OIG affirmed the value of UPICs for CMS.

“Given the cost and scope of these federal health care programs, it is essential that UPICs successfully detect and deter fraud, waste and abuse,” the OIG stated.

TPE ramifications

Though UPICs are occurring more often, providers are also contending with TPEs.

A TPE is designed to be more of an educational process than punitive, CMS indicated to Hospice News in an email. The TPE program is designed to identify providers that have frequent errors on their Medicare claims or billing practices. TPEs also focus on services that have high national error rates and represent a financial risk to Medicare, according to CMS.

Responding to each type of audit — and instituting corrective actions for any compliance issues — can be taxing on hospices in more ways than one, according to the law firm Bass, Barry & Sims.

“CMS audits present more than merely administrative or procedural hurdles. If handled incorrectly, a CMS audit can fundamentally impact a provider’s business,” the firm recently reported. “Failing to respond properly can lead to significant and sometimes draconian consequences.”

All told, the agency used TPEs to review billing practices for nearly 11,900 health care providers last year. Via recovery auditing reviews through the TPE probes, CMS recouped $467.7 million in overpayments during 2022 related to improper billing practices.

Approximately 1,150 hospice providers participated in a TPE audit during fiscal year 2022, dipping slightly from 1,419 in FY 2021, CMS reported.

“A lot of hospices are in their second, some even third, round of TPE reviews at this point,” Pekarske said. “This is all while having other audit types going on. It’s fairly significant not only in the number of audits some [hospices] face, but also the value of those audits in terms of the total dollars extrapolated – in some cases it’s been millions.”

When selected for a TPE, hospices receive a notification letter from their MAC. The contractor then pulls and examines between 20 and 40 of the organization’s claims and supporting medical documentation. If the MAC finds discrepancies, the hospice has 45 days to correct the issue.

Hospices could see a further uptick in both UPIC audits and TPE activity in years to come, according to Pekarske.

“As far as more TPE, UPIC and other auditing activity, there’s no clear end in sight for hospices,” Pekarske told Hospice News. “It would take the standards and constructs around the benefit to be modified to see significant change. That prognosis challenges how regulators’ auditing dollars are spent and how hospice resources are used in response. Until there’s fundamental changes, auditing may continue to ratchet up.”

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