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What You Can Do to Prevent Hospice Fraud

By Richard Dahl | Last updated on

Until recently, hospice programs generally enjoyed reputations for integrity and reliability.

That distinction is fading fast.

Born in the 1960s as a holistic movement to provide compassionate care for dying people, hospice gradually became ingrained in the health care system. In 1983, the movement achieved a major milestone when Medicare began covering hospice care for beneficiaries with life expectancies of six months or less.

That transformed hospice care into more of a business operation. Once provided primarily by nonprofit agencies, today more than two-thirds of hospices operate as for-profit entities.

While hospice provides a compassionate end of life for most people in its care, recent revelations show that the industry suffers from a significant level of Medicare fraud. Investigations are revealing a system with lax safeguards, providing an opportunity for unscrupulous providers to game it for easy profit.

How the Fraud Works

For starters, Medicare pays hospice providers a set daily rate per patient and requires nurses to visit only twice per month. And since most hospice care is at home, it's easy to keep overhead low and rely on unpaid family members to handle most of the work.

The system also provides an inducement to recruit as many people for hospice as possible. The recent investigations reveal that some providers talk families into signing up loved ones for hospice too soon — and when they do, they sometimes give up curative care such as chemotherapy and lifesaving medications.

Other findings:

  • Because the federal government demands repayment from hospices when average patient stays exceed six months, some operators simply discharge patients from hospice. When patients are discharged, they lose pain medications, hospital beds, wheelchairs, and other items they may not be able to afford.
  • Some hospice providers bribe physicians with all-expenses paid trips to Las Vegas or even outright kickbacks.
  • Hospice oversight is scarce — regulations require inspections only once every three years. Despite widespread complaints, a government review of inspection records between 2012 and 2016 found that a majority had serious deficiencies.
  • Bad actors are rarely punished. A government report found that between 2014 and 2017, only 19 of the 4,000 hospices in the U.S. were cut off from Medicare funding.
  • Some providers had a practice of "ghosting" the dying at the very end of their lives when they are too sick to complain. One study found that 12% of people in hospice care received no visits during the last two days of their lives.

Enough Is Enough

These revelations have prompted calls for reform.

One of them is coming from the four largest hospice trade associations, which sent a detailed memo in January to the Centers for Medicare and Medicaid Services (CMS) calling for 34 changes to deal with the bad actors in their industry. The memo identified the "proliferation of hospices that exist primarily to be sold" as a problem in the industry and aimed five of their recommendations to deal with it.

Other recommendations:

  • Develop "red flag" criteria, such as co-location of hospices at a single address
  • Prohibit individuals with a history of financial crimes from hospice ownership
  • Implement a system of unannounced check-ins to confirm that offices are legitimate
  • Require more frequent Medicare surveys
  • Crack down on overaggressive marketing and sign-up campaigns
  • Require states to improve access to hospice complaint hotlines
  • Require background checks on all hospice owners and administrators

In addition, members of Congress are calling upon the U.S. Department of Health and Human Services to "immediately investigate this situation."

If You Are Contemplating Hospice

If you have a loved one who is nearing death with a terminal illness, a first step may be to read the Medicare Hospice Booklet, which details the various services that hospice provides.

If you think it's time for hospice care, you then need to compare providers. A first step could be Medicare's own listings and ratings of hospice providers. You can compare survey ratings and other metrics, such as the percentage of medical conditions the provider most commonly treats and the levels of care they provide.

Next, check out whether complaints have been filed about a provider. CMS publishes summaries of these investigations from the previous three years.

Next, interview prospective hospice providers and ask whether they accept Medicare or other insurance.

Other questions:

  • How long has the hospice been serving patients in your locale?
  • Is the hospice a nonprofit or for-profit organization?
  • Who is the owner?
  • Are there services the patient is receiving now that the hospice can't provide?
  • Can the hospice confirm that it will provide a hospital bed and the necessary equipment?

If You Suspect Hospice Fraud

If you have a loved one in hospice and you suspect fraud, you can file a complaint with your state health department or with the Beneficiary and Family-Centered Care-Quality Improvement Association. If you feel uncomfortable doing that, you should consider contacting the Senior Medicare Patrol, a service that helps Medicare beneficiaries, their families, and caregivers report health care fraud.

Our loved ones deserve good care during their final days. We need to make sure they receive it.

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