Hospice Care and Roto-Rooter—What Happens When For-Profits Run Hospice Care?

January 8, 2012; Source: Palm Beach Post | NPQ has done a number of articles on the growing presence of for-profit corporations in the hospice care “industry” and the effect their presence is having on cost and quality of care. This article, from the Palm Beach Post, focuses on Vitas, one of three hospice care companies operating in Palm Beach County. Vitas, started in Miami, has a much larger purview, however, operating in eighteen states altogether. And it is owned by a larger corporation, Chemed, which also owns Roto-Rooter—the smaller of the two businesses. The top executive at Chemed took home more than $6 million last year.

In question in all of this is the fact that payments for hospice by Medicaid have increased precipitously over the past six years, during the same period of time that for-profit groups have been aggressively entering the field. HHS says that Medicare spending on hospice care for nursing facility residents jumped nearly 70 percent between 2005 and 2009, from $2.55 billion to $4.31 billion. A number of investigations and suits have been launched around the country regarding for-profits’ flouting of eligibility requirements.

Watchdogs charge that for-profit hospice providers locate more-profitable patients and serve them in greater abundance as part of their business model, but this can become a problem when the patient is actually ineligible—that is, not within six months of death. Some speculate that the for-profits are taking patients—including Alzheimer’s and dementia patients—too soon, possibly through sweetheart deals with nursing homes, resulting in longer term care. These patients also generally cost less to treat, thus hiking up profits even further.

In Palm Beach, according to a study done by the Palm Beach Post, Vitas does keep patients on government-reimbursed care for 40 percent longer than their nonprofit counterparts . . . “and away go Medicaid dollars down the drain.”—Ruth McCambridge