A new federal report stating that hospices are overbilling Medicare has hospice and palliative-care associations defending their industry and urging clarification of regulations that define who is eligible for in-patient hospice care and for how long.

According a March report [PDF] by the Department of Health and Human Services Office of the Inspector General (OIG), U.S. hospices inappropriately charged Medicare $268 million in 2012. In most of those cases, the OIG found, the beneficiary was receiving inpatient care in a facility rather than less-expensive home care but did not have a terminal illness requiring general inpatient care (GIP). In 1 percent of cases, there was no evidence that the beneficiary had elected hospice care, or even had a terminal illness in the first place. For-profit hospices were more likely to bill inappropriately, and Medicare was sometimes billed twice for prescriptions, according to the report.

Commenting on the findings to the New York Times, William A. Dombi, director of the Center for Health Care Law, an affliate of the National Association for Home Care and Hospice (NAHC), noted that federal regulations lack a clear definition of GIP, making care decisions inconsistent across the industry.

“There are no real objective standards to determine when people need inpatient care,” Dombi said. “Some hospices tend to use it much more than others.”

NHPCO has worked closely with Congress and CMS to promote policy changes.

Under the Medicare rules, GIP is designed to provide short-term care for terminally ill patients with a life expectancy of six months or less. But as the report notes, “Medicare regulations do not specify what is meant by short-term for GIP.”

Meanwhile, the National Hospice and Palliative Care Organization said it “continues to welcome appropriate oversight of the field” and pledged to work with federal agencies to address Medicare billing abuse.

“NHPCO has worked closely with Congress and CMS [the Centers for Medicare and Medicaid Services] to promote policy changes that stem the abuses referenced in the report and ensure a high-quality hospice experience for consumers,” said Sharon Scribner Pearce, NHPCO’s vice president of public policy, in a statement.

Among the OIG’s recommendations are increased oversight of GIP claims and drug billing and stronger supervision of the decision to use the GIP option, particularly for lengthy stays. One legal response to the report noted that “GIP stays that last more than a few days are likely to face additional payment scrutiny in the future, given OIG’s conclusion that GIP level of care is intended as ‘short-term’ care.”

NHPCO’s Pearce emphasized its recommendation that hospices “evaluate continued eligibility for GIP every day.”

But NAHC cautioned that an overly restrictive definition of short-term care would work against the best interests of patients in need of hospice services. In a statement responding to proposed Medicare billing changes for hospices during a conference in Washington, DC, last week, NAHC said that “Congress must closely monitor the impact of the payment reform changes implemented by CMS and any future activities to ensure that changes do not reduce access to quality hospice services for Medicare beneficiaries during the final stages of life.”

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