Because the fraud indicators we identified frequently also involved home health agencies, the four departments should also consider these risks as they relate to home health agencies. However, for four of the eight license renewal files we examined, the notification indicated that PublicHealth did not have any record in its licensing system for one or more managing personnel. Response to Recommendation #4: Agree. PDF BETTY T. YEE - California State Controller's Office 2023-2024 Audit Guide (July 1, 2023) Appendix A: LOCAL SCHOOL CONSTRUCTION BOND AUDITS. The regulations should also establish guidelines for when Public Health must deny the application of a hospice agency that is proposing to use medical personnel whose professional license records indicate the imposition of a disciplinary action. In fact, the California Department of Public Health (PublicHealth) reported a single building in the community of VanNuys as having more than 150 licensed hospice and home health agenciesa number that exceeds the structures apparent physical capacity. In October 2021, the Legislature passed a general moratorium on licensing new hospice agencies beginning January 1, 2022, and lasting until one year after the publication of this report, to spur attention and action to improve what many stakeholders, including hospice providers themselves, agree is a regulatory system in need of reform. To address fraud that is likely occurring in Los Angeles County, the Legislature should require the California Department of Public Health (CDPH), the California Department of Health Care Services (DHCS), the California Department of Justice (California DOJ), and the California Department of Social Services (CDSS) to immediately convene a taskforce to identify, investigate, and prosecute fraud and abuse by hospice agencies in that county. However, a general moratorium on licensing new hospice agencies in California took effect on January1, 2022, and will last until one year from the date this report is published, which will limit the number of new hospice agencies licensed from these more recent applications for the duration of the moratorium. OSAE actively helps departments improve financial and programmatic operations, systems, processes, and controls. Click below to search our various fact sheets. Response to Recommendation #6, bullet 4: Agree. As the Introduction explains, hospice agencies with deemed status have been deemed by a federally approved accreditor to meet Medicare requirements for certification. Response to Recommendation #11: Agree. Thus, we have directed many of our recommendations to the Legislature. California Health Facility Information Database, Centers for Medicare and Medicaid Services, Office of the Inspector General of the U.S. Department of Health and Human Services, Provided on a routine day when a patient is not receiving continuous care. PublicHealth has also failed to consistently verify the medical and nursing licenses of the professionals who work at the hospice agencies. Analyzed PublicHealths licensing data and CMSs data on hospice agencies in otherstates. New York and Florida each have laws requiring hospice agencies to demonstrate a need for services in areas in which they wish to operate. We present the complete list of our recommendations later in the Conclusions and Recommendations section. As such, DHCS supports the formation of a task force, or working group, with the CDPH, CDSS, and California DOJ to assess fraud risks in the Medi-Cal Hospice Program. Determine whether PublicHealth considers geographic need, or lack thereof, for additional hospice agencies when issuing new hospice licenses and whether PublicHealth denies licenses due to lack of demonstratedneed. In fact, its practice is to not seek more information in such situations during the renewal process. State law requires PublicHealth to conduct criminal background checks when approving licenses for certain other health agencies providing care in the home, such as for home health agency owners and administrators. Recommendation to the Legislature Response to Recommendation #8, bullet 2: Agree. CDSS remains steadfast in its efforts to protect the health and safety of residents in licensed Adult and Senior Care facilities. Interviewed staff at PublicHealth and Social Services regarding their implementation of mandated reporting procedures. Review and evaluate the laws, rules, and regulations significant to the audit objectives. We believe immediate action needs to be taken to ensure the health and safety of hospice patients and to address the significant likelihood of fraud occurring in LosAngeles County. However, PublicHealth has not required the accreditors to provide complete documentation of their visits showing how they ensured that hospice agencies meet federal and state requirements. Reviewed laws and regulations related to the regulation of hospice agencies inCalifornia. For instance, we reviewed an application in which the individual whom the hospice agency proposed would serve as its medical director was already the active or planned medical director for more than 30 other hospice agenciesa questionable number for a person who is charged with the responsibility of developing plans of care, directing the interdisciplinary teams, consulting with the patients attending physicians, and liaising with other physicians in the community to coordinate efforts to ensure that each patient receives quality care. This information could not only provide Health Care Services with additional fraud indicators, but it could also serve to identify gaps in the regulatory and oversight processes that are currently in place. However, the risk indicators that the tool employs may not be adequate because Health Care Services has not performed a formal comprehensive risk assessment for the hospice program as a whole. In addition, the OIG found several cases in which hospice agencies failed to take action when their patients were harmed as a result of abuse by hospice employees and others. In fact, that hospice agency notified PublicHealth that it stopped operating in October2019 after which its license was never renewed. 7Although CMS does have data that indicate the number of beneficiaries for individual hospices, it includes data only for those that are certified. From 2001 through 2018, PublicHealth data show it received nearly 1,700 applications for new hospice licenses. These patients might have been admitted to hospice care under false pretenses. It had more than six-and-a-half times the nationwide average number of hospice agencies relative to its aged population in 2019. Effective January 1, 2019, state law requires PublicHealth to issue licenses to hospice agencies that are accredited by a national accreditor, provided that the accreditor forwards copies of all reports or findings related to the hospice agency to PublicHealth and that certain other conditions are met. The text that Social Services cites in its response is here. Consequently, quality data on Californias many smaller hospice agencieswhich have increased in number in recent yearsare not fully represented in the data. For these hospice agencies, accreditors perform the initial site visit to their business offices for licensing and are required to supply PublicHealth with all their reports or findings from those initial visits and any subsequent inspections. State law allows PublicHealth to grant an exception to the moratorium if an applicant has shown a demonstrable need for hospice services in its area. The departments authority for promulgating regulations is for the purpose of licensing health care providers, thus regulations are not the appropriate method for obligating the department to implement this recommendation. Reviewed records within each selected complaint file to determine PublicHealths effectiveness in communicating with complainants. Reviewed PublicHealths hospice licensing data and licensing files to identify hospice personnel purportedly working for multiple hospice agencies. California State Controller's Office: California State Controller's Office Public Web site (PWS) More than 2,800 hospice agencies were licensed to operate in the State as of January 2022. These meetings frequently include a discussion about the quality and quantity of referrals from DPH to DOJ, generally. A report published this week by the auditing arm of Kansas' legislature found that while the state's county governments have "adequate" overall security applied to their election processes, performance varies and some security categories have weaknesses.. MICHAEL S. TILDEN, CPA Although PublicHealth requires hospice agencies to report when they change owners or locations, it has not created guidelines for when these changes require a new inspection. We believe that a coordinated effort by PublicHealth, Health Care Services, DOJ, and Social Services is necessary not only to respond to instances of fraud and abuse, but also to proactively prevent future occurrences. See 42 CFR 1007.11(a). Release Date: Summer 2023 2022-006 Treasurer's Cash Count, June 30, 2022 At the same time, it received 32complaint referrals related to hospice fraud for the rest of the State that it chose to review further. 2015-16 Audit Guide Update. This recommendation cannot be implemented by Public Health. Response to Recommendation #2: Agree. A figure that lists the various entities, federal and state, that are involved in hospice oversight in California. Public Health lacks requirements related to criminal background checks of key hospice agency personnel, verifying the need for hospice agencies in proposed location, the size of the hospice agency's service area, the ratio of nurses to patients, and staff employment by multiple hospice agencies. CDSS Audit Guide, Revised 2022 (PDF; 1MB) Audit requirements and guidance applicable to certain state and federal programs operated by private and public agencies under agreements with the California Department of Social Services (CDSS). Compared the sanctions PublicHealth can apply to hospice agencies to those it can apply to home health agencies to identify improvements to existing enforcementmeasures. Develop a comprehensive training manual regarding performing investigations. When a hospice agency is required to renew its license, PublicHealth sends a notification that requests that the agency pay the renewal fee and verify the names of the managing personnel recorded in Public Heaths licensing system, including key positions who are responsible for patient care such as the hospice administrator and medical director. There is currently a general moratorium on licensing new hospice agencies. Note: this does not replace the federal and state requirements to submit an annual audit report to the CDSS Office of Audit Services and Federal Clearinghouse. Licensing consists of two main components to ensure that hospice agencies comply with state requirements: an application and an initial site visit. In addition to the significant indicators of fraud we have already noted. Report 2021-613 - California State Auditor As recently as February 16, 2022, DMFEA charged 16 individuals with fraud in relation to a hospice fraud scheme perpetrated throughout the Inland Empire. Our copy of the draft report contains only the limited portions that refer directly to the DOJ. View PDF version of this information. In performing this audit, we relied on electronic data files that we obtained from PublicHealth, Health Care Services, DOJ, CMS, and the U.S. Census Bureau. Accordingly, we mention home health agencies in this report to the extent we identified problems that included them. Figure 5 describes several of these indicators, which we refer to in our review. Nevertheless, Public Health has not enforced this requirement. Once it approves a licensing application, PublicHealth performs an initial site visit to ensure that the hospice agency will comply with hospice standards. Changing hospice agency locations and ownership can allow unscrupulous individuals to evade oversight. A bar graph showing the numbers of complaint allegations in the top ten categories from 2015-2021. The large number of hospice and home health agencies that the licensing data show as located in this building and other businesses located in it appears to exceed its capacity. At the same time, it has failed to use the most powerful tools currently available to it as a means to curb violations: since 2015 it has never suspended a hospice license and has revoked a hospice license only once. The number of hospice agencies in some states is significantly lower than in California. For example, hospice standards require the director of patient care services to devote a sufficient number of hours to the hospice agency, which is not possible to assess when the hospice agency has not yet been licensed. Response to Recommendation #6, bullet 6: Agree. During the period of our audit, the most current data publicly available for these other states was for 2019. These departments should adjust their fraud prevention and detection efforts based on the results of thisassessment. Interviewed staff at PublicHealth, Social Services, and Health Care Services to determine the methods they use and extent to which they monitor patients in longterm care facilities who choose to receive hospice care. Consequently, the State lacks an effective process for moving complaints forward that might merit investigation. This guide is designed to help licensees perform periodic self-assessments of their facility's operation. Response to Recommendation #5: Agree. The complainant alleged that the hospice agency was falsifying documents to keep patients on hospice care and that nursing staff had not visited patients in months. PublicHealths data show that since 2015, it has cited more than 60 hospice agencies each with more than 20 violations. We are referring information related to possible fraud to DOJ and the federal OIG forinvestigation. Reviewed press releases and court documents from federal and state law enforcement agencies related to hospice fraud and abuse and other health care fraud schemes. CPA Firm Directory The California State Auditor provides the Legislature with reports to enhance California's government. Further, hospice lengths of stay vary by patient diagnosis, which permits providers to identify and enroll patients likely to have long stays if the providers believe it is financially advantageous. Sacramento, CA 95814. Response to Recommendation #1: Agree. Response to Recommendation #6, bullet 2: Agree. We identified numerous indicators of such fraud and abuse by hospice agencies, which typically offer palliative end-of-life care to individuals with medical diagnoses of fewer than six months to live. Moreover, our review of MediCal data for hospice claims resulted in similar findings. However, state law does not have a corresponding requirement for hospice owners and administrators, which we believe places hospice patients safety atrisk. We believe that it is important to clearly differentiate between these two very different outcomes. PublicHealth has issued licenses to hospice agencies with service areas of up to 31 counties, sometimes in areas of heavy traffic and long drive times. Public Health agrees that defining requirements for hospice office space is appropriate within regulations. California to audit its regulation of addiction treatment facilities As a result, it did not identify that one such individuals medical license showed a history of probation for gross negligence and repeated negligent acts. Figure 8 depicts one example of the suspicious clustering of hospice agencies in VanNuys. Although the majority of hospice services were provided by nonprofit organizations in the past, this recent wave of growth is almost exclusively in forprofit companies. However, for the purposes of this table, we used the standardized amounts that Medicare makes available in its online data. In the absence of regulations, PublicHealth relies on certain standards written for hospice agencies. We believe that PublicHealth should differentiate these outcomes into two categories on its website: unsubstantiatedindicating that the allegations have been proven untrueand undeterminedindicating that there was not enough evidence to make a determination. According to PublicHealth officials, it is difficult to revoke or suspend a license because the hospice agency can appeal, which can result in overturning the action. PublicHealth and the other two state agencies that play a role in identifying and investigating fraud and abuse of the hospice systemHealth Care Services and DOJhave done little to coordinate their efforts. The accreditors then have jurisdiction for overseeing the hospice agencies ongoing compliance with federalrequirements. Eleven counties have zero hospices. This usually occurs, however, only when there is sufficient information on the face of the referral to indicate fraud or abuse within DMFEAs jurisdiction. In doing so, we create fact sheets that highlight key findings from our reports. DHCS appreciates the work performed by the CSA and its perspective regarding increased opportunities to enhance hospice program integrity efforts. Evaluate the effectiveness of Californias systems to identify, address, prosecute, and deter hospice fraud and determine whether additional resources may be needed. DOJ will continue to meet with DPH and provide training/guidance. The county with the darkest shade is Los Angeles County, which contains 1,841 hospices, or more than half of the States total. Audit Resources - Local Education Agency (LEA) Audit Guidelines (CA Establish requirements for conducting follow-up inspections to the initial site visits within one year of initial licensing to verify that hospice agencies are complying with those hospice standards that cannot be assessed before the agencies begin providing care to patients. In the absence of such measures, LosAngeles County has experienced significant growth of hospice agencies that is disproportionate to the estimated increase in its number of hospice patients and its demand for hospice services. Although CMS does have data that indicate the number of beneficiaries for individual hospices, it includes data only for those that are certified. Additionally, the MOU currently sets forth a general procedure for acquiring additional information from DPH upon request by DOJ. We found Health Care Services MediCal data to be sufficiently reliable for the purpose of calculating the amount of MediCal feeforservice spending on hospice services but of undetermined reliability for the purpose of analyzing hospice services, providers, and beneficiaries for possible indicators of fraud. A high discharge rate of live patients could indicate misuse of the benefit in that the hospice agencies are enrolling patients who are not eligible for hospice services because they are not terminally ill. Consequently, these patients may not be receiving the curative care they need. Patients may also be discharged from hospice care if they revoke their hospice election to seek curative care or if they move out of a hospice agencys service area. * We estimated the statistics for 2021 aged population, 2021 deaths of the aged population, and the daily patients per hospice agency using historicalaverages. In the above audit report, CSA issued a recommendation for the Legislature. A graphic that lists indicators of hospice-related fraud and abuse. A map of one area of Van Nuys in Los Angeles County with red numbers indicating the sum of hospice agency business offices located in each building. In doing so, CDSS will continue working collaboratively with sister agencies and a broad spectrum of stakeholders that includes advocates, providers, licensees, and others. Reviewed the number of complaints associated with deemed versus not deemed hospice agencies and reviewed CMS data on quality of care. An audit begins with the examination of records for a test year which is generally the most recent completed calendar year. To address fraud that is likely occurring in Los Angeles County, the Legislature should require Public Health, Health Care Services, DOJ, and Social Services to immediately convene a taskforce to identify, investigate, and prosecute fraud and abuse by hospice agencies in that county. As we stated, Public Health has had the authority to issue regulations since 1991 but has failed to do so. Include an icon that indicates whether a hospice agency has been cited recently for abuse or neglect. Laurel Harnett, Class of 2019. In Florida there are 44 hospices, which is about 95,000 aged persons per hospice agency. some of the hospice standards cannot be verified prior to the hospice agency being licensed and operating. LosAngeles County hospice agencies have unusually long durations of patient care and high rates of patients being discharged alive. OSAE accomplishes these multifaceted objectives using staff with diverse backgrounds, professional certifications, and technological expertise. To enable PublicHealth to better oversee the licensure of hospice agencies, the Legislature should require as a part of the licensure application the inclusion of financial information that is similar to the information required for home health agencies. The recommendation is for the Legislature to require Public Health to establish requirements that hospice agencies will have to comply with to qualify for licensure. In addition, PublicHealth has not audited any deemedstatus hospice agencies, even though state law and PublicHealths contracts with the accreditors authorize it to do so. Thus, based on the size of the building and our observations from visiting the building, there does not appear to be space for more than a total of 150 hospice agencies, home health agencies, and other businesses in the building. PublicHealths licensing data show that a significant number of business offices for hospice agencies are similarly clustered at other addresses. When we reviewed a list of hospice fraudrelated complaints that DOJ had received, we found that DOJ did not investigate 29complaints that PublicHealth referred to it from 2016 through 2021. Sacramento, CA 95814. DOJ currently uses data analytics to look for outliers in Medi-Cal claims data from hospice providers. Given all of the evidence, we are extremely concerned that a network or networks of individuals in LosAngeles County is setting up numerous hospice agencies and applying for licenses to fraudulently bill Medicare and MediCal for services that are substandard or nonexistentsimilar to past Medicare fraud schemes. A quality of care rating system for hospice agencies similar to the one that Medicare uses for Care Compare. Accordingly, we believe that Public Health has sufficient authority to obtain these documents. To protect the health and safety of current and prospective hospice patients, the Legislature should require PublicHealth to immediately begin the process of developing emergency regulations for its hospice licensing process. For example, CMS can fine home health agencies up to $10,000 per day of noncompliance that constitutes an immediate jeopardy violation that results in harm. However, it is unclear what happened to its patients and to their medical records despite the fact that hospice standards require that PublicHealth be notified of arrangements for the preservation or transfer of patient records to the new hospice agency as soon as a hospice agency stops operating. To the extent possible, assess a potential trend in California targeting residents of nursing and assisted living facilities to receive hospice care. These same schemes have frequently also involved home health agencies, which are similar to hospice agencies in that they also provide care to patients in their homes, though hospice agencies serve patients who are terminally ill. PublicHealth is unaware of whether these hospice agencies lack staff or have hired unqualified staff who could be providing patients substandard care or even causing them harm. Under the California Hospice Licensure Act of 1990 (Licensure Act), the California Department of PublicHealth (PublicHealth) is responsible for licensing hospice agencies in the State. 6Since 2015 DOJ also received 32 other complaints regarding hospice providers that it chose not to reviewfurther. Evaluate the States coordination of services between nursing and assisted living facilities and hospice agencies by doing the following: Assess the adequacy of hospice agency information presented on PublicHealths Cal Health Find website to determine whether improvements and additional information may be necessary to better serve the public. As part of the licensing requirements, state law requires that hospice agencies provide services in compliance with the 2003 version of the Standards of Quality Hospice Care developed by the California Hospice and Palliative Care Association (hospice standards). However, when we reviewed Health Care Services efforts regarding the MediCal hospice program, we found that it had not completed a comprehensive risk assessment, that its efforts were largely reactive, and that it had not established substantive preventive measures. This certification covers an initial 90day period, after which the patient must be recertified. Develop a comprehensive training manual regarding performing investigations. As a result of its subsequent investigation, PublicHealth found that the hospice agency was no longer operating. These arrests further suggest that fraudulent activity is likely occurring in the cities and communities where we identified a large number of fraud indicators. Search Menu. Although state law allows PublicHealth to deny any application when it finds a misrepresentation of a material fact, it almost never does so. AASC Form FY2021-22 (PDF; 284KB) It should also define appropriate measures of need and identify the methodology hospice agencies must use to demonstrateneed. Abnormally high rates of still-living patients discharged from hospice care. The second highest number of allegations is for resident/patient/client rights, with almost 300. Similar to the rules under Medicare, patients must meet certain requirements to elect to receive hospice care through MediCal. When we reviewed these data, we identified large numbers of hospice agencies with business offices at and around certain addresses. Determine the frequency of hospice agency inspections and repeated violations. Identify and describe annual MediCal program spending on hospice care for MediCal beneficiaries and how this may have changed over the last decade. Response: To protect against excessive and fraudulent growth in the number of hospice agencies, the Legislature should revise state law to require new, previously unlicensed hospice agencies to demonstrate an unmet need for hospice services in an area in which they wish to operate. Even when it identifies problems with proposed hospice agencies, PublicHealth does not always take appropriate corrective action. The rapid growth of hospice providers and alleged fraud, as evidenced by the Department of Justices recent arrests of several providers in San Bernardino, is cause for great concern and Public Health looks forward to discussions on how and under what circumstances to resume issuing new licenses. .03 All audits shall be performed by a certified pu blic accountant licensed by the California State Board of Accountancy. Because the LosAngeles County Department of PublicHealth carries out PublicHealths policies and operates programs as requested by PublicHealth in performing its contractual licensing and certification responsibilities and because it operates under the oversight of PublicHealth, we do not draw a distinction in this report between the two entities. In addition, the contracts between Public Health and the accreditors require the accreditors to provide copies of inspection reports to Public Health. Require that, as part of its review of the initial application, Public Health verify that the hospice management personnel listed on the licensing application are, in fact, associated with the hospice agency, such as contacting them by phone, and verify the work history of hospice management personnel by speaking with these individuals' previous employers by phone. Leadership within DMFEA currently meets with DPH leadership twice a year to discuss fraud and abuse trends, referrals, and inter-agency cooperation.
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