The hospice benefit allows a Medicare beneficiary with a terminal illness to forgo curative treatment for the illness and instead receive palliative care. The number of Medicare beneficiaries receiving hospice care has risen dramatically from 580,000 in 2001 to 939,000 in 2006. In response, Medicare spending on hospice care nearly tripled over that time to from $3.6 billion in 2001 to $9.2 billion in 2006.
Some studies suggest that the use of hospice care has grown most rapidly in nursing facilities. Questions have also been raised about the hospice benefit for nursing home residents, with suggestions that payment levels for hospice care in nursing homes may be excessive. In response to such a rapid increase in hospice care payments by Medicare and the particular concerns with the payments going to nursing homes, the Department of Health and Human Services (DHHS) conducted a study, finalized in September 2009, to determine the extent to which hospice claims for Medicare beneficiaries in nursing facilities in 2006 met Medicare coverage requirements. Contained in the report are DHHS’s findings along with specific recommendations to the Centers for Medicare & Medicaid Services (CMS) for how to deal with the compliance problems highlighted by the study.
The study revealed some rather startling findings regarding how well nursing facilities complied with Medicare coverage requirements when they submitted hospice claims for fiscal year 2006. Overall, 82 percent of Medicare hospice claims did not meet one or more coverage requirements, and payments for those claims totaled $1.8 billion, over 19 percent of Medicare’s total payments for hospice care. There were four key areas where DHHS found that hospice claims failed to meet requirements:
In response to these findings, DHHS made three recommendations to CMS that it should implement, all of which CMS is in agreement with. CMS should:
CMS has already begun implementing the recommendations made by DHHS in an effort to ensure greater compliance with the Medicare hospice care regulations. Nursing home facilities that provide hospice care funded by Medicare should take advantage of the tools and educational opportunities CMS will provide as well as pay particular attention to the areas the DHHS study found deficient. By paying dutiful attention to the Medicare hospice care requirements, nursing facilities can ensure future payment and certification.
 OIG, “Medicare Hospice Care for Beneficiaries in Nursing Facilities: Compliance with Medicare Coverage Requirements,” OEI-02-06-00221, September 2009, at 1 [hereinafter “OIG Report”].
 Id. at 1.
 Centers for Medicare & Medicaid Services (CMS), “Medicare Hospice Expenditures and Units of Care,” available online at http://www.cms.hhs.gov/ProspMedicareFeeSvcPmtGen/downloads/FY05update_hospice_expenditures_and_units_of_care.pdf. Accessed October 1, 2009; CMS analysis of Medicare Health Care Information System data for calendar year 2006 claims. Provided by CMS on May 5, 2009.
 Government Accountability Office (GAO), “Medicare Hospice Care: Modifications to Payment Methodology May Be Warranted,” GAO-05-42, October 15, 2004, pp. 4 and 20; Office of the Assistant Secretary for Planning and Evaluation (ASPE), “Synthesis and Analysis of Medicare’s Hospice Benefit,” March 2000.
 See OIG, “Hospice Patients in Nursing Homes,” OEI-05-95-00250, September 1997 (suggesting that 1995 payments levels for hospice care in nursing homes may have been excessive).
 See OIG Report.
 OIG Report, at 10.
 Id. at 11-12
 Id. at 11.
 Id. at 11-12
 Id. at 12-15
 73 Fed. Reg. 32088, 32115 (June 5, 2008).
 OIG Report, at 12.
 Id. at 12-13.
 Id. at 15-16.
 Id. at 15.
 Id. at 16.
 Id. at 17-18.
 Id. at 18.