Hospice Overpayments: Case Study
Hospice Overpayments: Case Study
$1.3 Million in Hospice Overpayments Identified
OVERVIEW
A Medicaid managed care organization (MCO) engaged Integrity Advantage to review a contracted hospice provider after identifying billing patterns and utilization trends warranting further investigation. While high hospice utilization alone does not indicate fraud, waste, or abuse (FWA), several indicators suggested elevated financial and compliance risk.
Through advanced analytics, medical record review, and investigative expertise, Integrity Advantage identified more than $1.3 million in suspected overpayments associated with unsupported hospice claims for the provider.
WHAT IS HOSPICE
Hospice provides comfort-focused care for individuals with life-limiting illnesses when curative treatment is no longer the primary goal. Eligibility generally requires physician certification that a member has a life expectancy of six months or less. Patients must be re-certified at the 90-day mark, the 180-day mark, and every 60-days thereafter.
Because hospice reimbursement depends on continued documentation supporting eligibility, election of benefits, and billed services, documentation gaps or unusual billing patterns can expose health plans to significant financial and regulatory risk.
THE CHALLENGE
The client needed to determine whether observed hospice billing patterns reflected appropriate utilization or signaled broader compliance concerns.
The organization needed to isolate the root causes of the suspicious billing activity, determine the scope of potential overpayments, and assess whether provider practices were creating ongoing program integrity risk. Specific areas of focus included:
Unusual utilization patterns, including high live discharge rates and extended hospice stays
Documentation deficiencies, including missing hospice election forms and incomplete medical records
Billing concerns, including unsupported physician services and potential duplicate claims
OUR APPROACH
Using targeted analytics, medical record review, and investigative expertise, Integrity Advantage conducted a targeted review that included:
Two years of hospice claims and payment analysis
Benchmarking of discharge patterns and lengths of stay
Focused review of high-risk members
Medical record and documentation validation
Coding and billing compliance assessment
Financial impact analysis and regulator-ready reporting
THE OUTCOME
The review revealed a 100% error rate and an identified overpayment of $1.3M.
CODES INVOLVED
Revenue Code 0650: Hospice Services, General Classification
Revenue Code 0659: Hospice Services, Other Hospice Services
Revenue Code 0657: Hospice Services, Physician Services
CPT 99348: Established Patient Home or Residence Evaluation and Management Visit
KEY FINDINGS
The review identified systemic documentation deficiencies that failed to support billed hospice services. Key observations included:
Approximately 72% of reviewed hospice discharges were live discharges, significantly exceeding national hospice benchmarks and prompting additional review of whether members continued to meet hospice eligibility requirements.
Seventeen members experienced hospice stays exceeding 275 days for which the MCO paid $1.25 million. According to the facts and figures published by the National Hospice and Palliative Care Organization (NHPCO)1, patients who stayed over 275 days in hospice were in the 90th percentile.
Required hospice election documentation was not provided.
Hundreds of claim lines lacked sufficient clinical documentation to support the services billed.
Documentation did not support physician-service billing during the hospice episode.
Potential duplicate claims and missing medical records were identified.
THE RESULTS
The investigation substantiated the client's concerns, identifying more than $1.3 million in suspected overpayments and delivering regulator-ready findings to support recovery efforts and ongoing program integrity oversight.
IMPACT DELIVERED
Identified more than $1.3 million in suspected financial exposure
Reviewed 16 high-risk hospice members
Evaluated more than 500 at-risk claim lines
Identified more than 370 unsupported claim lines
Delivered regulator-ready findings supporting recovery and reporting efforts
WHY IT MATTERS
Hospice serves members during some of the most vulnerable stages of life, making accurate documentation and compliant billing essential.
This engagement demonstrates how advanced analytics, clinical expertise, and investigative review help health plans distinguish appropriate utilization from billing practices that create financial and compliance risk.
INTEGRITY ADVANTAGE IS HERE TO HELP
Whether it’s conducting FWA program assessments, supporting data analysis, or providing outsourced SIU support, Integrity Advantage partners with healthcare payers nationwide to strengthen FWA programs.
Together, we help make measurable progress to sustain strong FWA program growth. Integrity Advantage is a certified Women’s Business Enterprise (WBE) and Woman Owned Small Business (WOSB).
With more than 30 years of experience supporting payers, the team at Integrity Advantage provides healthcare fraud, waste and abuse consulting, outsourced investigations and medical record reviews for Special Investigations Units and other organizations fighting healthcare fraud. We are a certified Women’s Business Enterprise (WBE) and an Economically Disadvantaged Woman Owned Small Business (EDWOSB).
For more information click below, call us at 866-644-7799 or email info@integrityadvantage.com.