Alive Hospice: The Inpatient Rate Needed More Than a Bed

In the Alive Hospice GIP settlement, the Tennessee nonprofit paid $1,548,220 to resolve allegations that it billed Medicare and TennCare for general inpatient care that patients did not qualify to receive. A former triage nurse brought the case. The higher payment depended on a clinical need, and the government alleged that need was missing.

The Justice Department’s September 10, 2015 announcement allocated $1,446,132 to the United States and $102,088 to Tennessee. Alive is based in Nashville.

The hospice fraud allegation concerned the level of care billed. That distinction matters to anyone who knows the patients: the reason someone needs hospice and the reason someone needs inpatient symptom management are different clinical questions.

What the Alive Hospice Settlement Alleged

The government alleged that Alive submitted claims for general inpatient hospice care for patients who did not qualify for it from June 1, 2010 through December 31, 2012. The settlement also covered seven patients who allegedly did not qualify for that level on specific dates in 2007 and 2008.

That is the point of this form of hospice billing fraud. A claim can carry a more expensive care level than the patient’s condition supports. The person assessing the symptoms and the person submitting the bill may see different parts of the same problem.

What Are the Criteria for a GIP Hospice?

GIP is a level of hospice care for inpatient pain control or symptom management that cannot be managed in another setting, such as the patient’s home. Medicare’s hospice payment rules tie that care category to the individual day and pay only one hospice care category for a given day.

The payment structure explains the stakes. Medicare and TennCare pay more for general inpatient care than for routine home care or inpatient respite care, as the Alive announcement explains. Routine home care is the home-care category when the patient is not receiving continuous care. Continuous home care supplies predominantly nursing care during brief crises to keep the patient at home. Inpatient respite provides a short break for the caregiver. GIP pays for pain or symptoms that require the inpatient setting.

For a nurse or biller, the useful comparison is the patient’s clinical need against the care level charged for the same period. An inpatient bed supplies a location. The symptom-management need supplies the reason for the higher rate. When that reason is missing, taxpayers can be charged for a level the patient did not qualify to receive.

The difference in payment was substantial during the period covered by Alive’s settlement. A national HHS Office of Inspector General review reported that Medicare paid $672 per day for GIP in 2012, compared with $151 for routine care. The care category determined how much public money went to the hospice for that day.

When Symptoms Settle, the Billing Question Changes

The national review found two recurring problems: patients who never needed general inpatient care and patients who needed it for only part of the stay. In the second group, the reason for entering inpatient care did not support every day billed afterward.

Using a sample of medical records, the Inspector General estimated that Medicare inappropriately paid $268.1 million for GIP in 2012. Hospices commonly billed that level when patients did not have uncontrolled pain or unmanaged symptoms. That finding gives a nurse or biller something more concrete than a care label: what symptoms still required inpatient management on the days being charged?

This is why the distinction matters to patients and taxpayers. The hospice benefit pays for care near the end of life. When the bill claims a level of care the patient does not need, money meant for that care pays for an unsupported higher rate instead.

A Triage Nurse Brought the Case

A former Alive triage nurse raised the allegations through a False Claims Act whistleblower case.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Care-Level Problem Returned in a Later Audit

The HHS Office of Inspector General’s May 14, 2021 audit found unsupported care-level claims in a period after Alive’s settlement. It examined care provided from October 1, 2015 through September 30, 2017, and found problems with both terminal-prognosis support and the level of care billed.

Auditors reviewed a random sample of 100 claims. They sent the sampled claims and associated medical records to an independent medical review contractor. For 16 claims, the clinical record did not support the patient’s terminal prognosis. For eight, it did not support the care level claimed.

That split separates the question behind hospice eligibility allegations from the care-level question at the center of the earlier settlement. The audit examined both. On the basis of its sample, the Inspector General estimated at least $7.3 million in unallowable Medicare reimbursement. That figure was an audit estimate, separate from the earlier settlement payment.

Alive disputed the findings and methodology. It argued that the medical reviewer failed to consider the whole chart and put the reviewer’s judgment above the certifying physician’s. Alive agreed that two sampled claims were in error and agreed to refund the overpayments on those claims. The Inspector General maintained its findings and recommendations after reviewing the response.

The Same Care-Level Problem in Other Hospice Cases

Covenant Hospice resolved allegations that it billed general inpatient care when routine home care was appropriate. The government alleged that its medical records did not support the need for the higher level. That is the same payment boundary the Alive settlement addressed.

Hope Hospice illustrates the question over a longer inpatient stay. Its settlement included allegations of medically unnecessary GIP for patients billed for more than two weeks of that care.

These cases make the clinical account central to the payment story. A nurse may understand why a patient moved into inpatient care and how the patient’s needs changed. A biller may know how those days were charged. Bringing those perspectives together can explain a discrepancy that neither the care label nor the payment total explains alone.

You Know Why the Patient Needed Inpatient Care

If you assessed the symptoms, reviewed the chart or billed the inpatient days, speak to one of our whistleblower experts about the GIP claims you know. We build your case around the difference between the care patients needed and the level charged, bring in hospice fraud whistleblower lawyers who understand clinical billing disputes, and stay beside you throughout the case.