The Centers for Medicare & Medicaid Services (CMS) and its audit contractors have the authority to suspend payments to hospice care providers suspected of submitting false claims or improperly retaining overpayments of taxpayer dollars. While payment suspensions are intended to help eliminate fraud under the Medicare program and Medicaid program, they can have serious financial consequences for providers—and, in far too many cases, these suspensions are unwarranted.

When hospice care provider audits lead to the issuance of payment suspension notices, targeted providers need to respond promptly and effectively. Depending on the circumstances, their Medicare enrollment or Medicaid enrollment could potentially be at risk as well—and allegations of suspected fraud can lead to criminal investigations in some cases.

“Hospice care providers that serve Medicaid and Medicare beneficiaries need to prioritize billing compliance. Auditors use claims data mining, on-site inspections, and other means to uncover evidence of suspected billing violations, and allegations of receiving improper payments can lead to payment suspensions and other serious consequences.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

Medicare and Medicaid suspensions are temporary by definition; and, when a suspension ends, the suspended funds are first applied to any overpayments (as determined by CMS or a CMS auditor). As a result, even once a suspension is over, this isn’t necessarily the end of the process. Suspended hospices may need to fight for the money to which they are legally entitled; and, in any case, they will need to be confident in their Medicare and Medicaid billing compliance programs so that they can safely bill going forward.

Fraud Enforcement is a Top Priority Under the Second Trump Administration

The federal government is prioritizing fraud enforcement under the second Trump administration—including fraud within the federally funded healthcare sector. For example, as recently reported by Hospice News, CMS Administrator Dr. Mehmet Oz reportedly told the publication, “When bad actors trick patients into fraudulent hospice care, they don’t just drain taxpayer dollars; they strip people of the medical care that could have helped them live longer. . . . CMS is taking aggressive, data-driven action to drive these predators out of the health system . . . .”

But, along with driving bad actors out of the health system, CMS’s aggressive approach is also leading to unwarranted consequences for well-intentioned hospice care providers in some cases. Patterns identified in hospice providers’ billings and other evidence of potential fraud can lead to assumptions of noncompliance—and these assumptions can lead (and are leading) to suspensions and other penalties despite providers’ good-faith efforts to maintain compliance.

What Hospice Care Providers and Home Health Agencies Should Do When Facing Medicare or Medicaid Payment Suspensions

With this in mind, when facing Medicare and Medicaid payment suspensions (and other program integrity enforcement efforts), targeted hospice providers need to take proactive steps to protect themselves. In this scenario, some of the key steps to take include:

1. Determine if You Are Facing Credible Allegations of Fraud or Receipt of Overpayments

A key first step to take in this scenario is to determine if your hospice has violated the False Claims Act (FCA). The FCA prohibits healthcare providers from submitting “false or fraudulent claims” under Medicare and Medicaid, and it serves as the basis for CMS’s enforcement authority.

If your hospice is facing credible allegations of fraud or receipt of overpayments, this is a situation that needs to be addressed—and it needs to be addressed promptly. Conversely, if your hospice is facing false allegations of billing fraud, this is a very different situation, and you will want to focus on affirmatively demonstrating compliance in order to avoid having your hospice’s Medicare or Medicaid payments suspended.

What if your hospice has improperly billed Medicare or Medicaid, or what if it has improperly retained overpayments? In this scenario, it may still be possible to avoid a payment suspension—though of course there are no guarantees. A proactive approach will be required; and, if your hospice owes money to the federal government, you will want to work closely with experienced legal counsel who can help you make informed decisions and communicate effectively with CMS on your behalf.

2. Make Informed Decisions About Your Next Steps

Once you know whether your hospice is facing credible allegations of fraud or receipt of overpayments, then you can focus on making informed decisions about your next steps. While fighting the suspension will involve filing a rebuttal statement, deciding what to include in this statement is critical. Some examples of key considerations include:

• What triggered the notice of suspension? From fraud hotline tips to claims data analysis, scrutiny of hospices’ program billing records can have various triggers. Knowing what triggered scrutiny of your hospice’s billing records will be key to making informed decisions.
• What are the specific allegations against your hospice? High live discharge rates, providing services to patients who were never terminally ill, improperly paying for referrals, and other forms of Medicare and Medicaid abuse can all lead to payment suspensions. To make informed decisions, you need to know the specific allegations against your hospice.
• Did auditors comply with all applicable laws and regulations? From CMS’s Program Integrity Manuals to the Social Security Act, Medicare and Medicaid auditors must comply with various federal laws and regulations. If they did not comply during an audit of your hospice’s billing records, the pending suspension may be unwarranted.

Again, these are just examples. Making informed decisions starts with gathering all relevant information. Another key piece of information to know is that providers facing Medicare and Medicaid payment suspensions do not have appeal rights. So, challenging a suspension is necessarily a proactive process, and hospices that are at risk of having their program payments suspended must work quickly to protect themselves.

3. File a Timely Rebuttal to the Payment Suspension Notice

As noted above, challenging a Medicare or Medicaid suspension involves filing a rebuttal. Providers generally have 15 days to file a rebuttal once they receive a notice of suspension. Broadly speaking, providers have three main options for seeking to avoid a payment suspension in this scenario:

• A Suspension is Unwarranted – If your hospice has complied with its Medicare and Medicaid billing obligations, then a suspension may be unwarranted.
• A Suspension is Unnecessary – If your hospice has taken (or is in the process of taking) appropriate remedial action, a suspension may be unnecessary.
• A “Good Cause” Exception Applies – In appropriate cases, hospices can seek an exception based on “good cause,” such as the need for patient access to care.

The specific options that are available in any particular case will depend on the specific circumstances involved. Once you have a clear understanding of why your hospice is facing a suspension (and whether this reason is valid), then you will be able to work with your legal counsel to prepare a rebuttal statement that is tailored to the circumstances at hand.

4. Focus on Protecting (or Restoring) Your Hospice’s Ability to Receive Medicaid or Medicare Payments

Regardless of what it takes, when facing a payment suspension, protecting (or restoring) your hospice’s ability to receive Medicaid or Medicare payments needs to be a top priority. If you have time to file a rebuttal, you should begin working on your rebuttal statement with your hospice’s legal counsel immediately. If it is too late to avoid a suspension, or if your hospice’s rebuttal is unsuccessful, you should work with your hospice’s legal counsel to do everything possible to restore your hospice’s payment eligibility as soon as possible.

5. Address Any Other Risks Your Hospice May Be Facing

Crucially, if your hospice is facing a Medicare or Medicaid payment suspension following a billing review, it could be facing other risks as well. Along with administrative penalties (i.e., recoupments, prepayment review, and denial of pending claims), this could include scrutiny from the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). The HHS OIG investigates cases of suspected criminal hospice billing fraud, and it works with the U.S. Department of Justice (DOJ) to pursue criminal charges when warranted.

6. Prioritize Effectively Managing (and Documenting) Billing Compliance Going Forward

Along with addressing your hospice’s immediate concerns, it will also be important to prioritize effectively managing (and documenting) billing compliance going forward. If the inquiry that led to your hospice’s suspension notice raised any legitimate compliance-related concerns, it will be important to address these concerns effectively so that you can confidently bill Medicare and Medicaid in the future.

7. Prepare to Defend Against Serious Healthcare Fraud Allegations if Necessary

Finally, if your hospice is at risk of facing an HHS OIG investigation, you may need to be prepared to defend against serious healthcare fraud allegations as well. As mentioned above, these investigations can lead to serious criminal charges—and the federal government is currently prioritizing fraud enforcement. Here too, knowing what is at stake is critical for taking an informed approach, and proactively targeting a favorable resolution under the circumstances at hand can be critical for avoiding unnecessary consequences as well.