Hospice Industry Problems Multiply as For-Profit Players Swarm the Market

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April 2, 2016; New York Times

It’s another troubling headline for the partnership of hospice care and Medicare, as the New York Times reported findings from the Inspector General of the Department of Health and Human Services (HHS) pointing to a number of instances where hospices inappropriately billed Medicare for hospice general inpatient care (GIP).

This is particularly concerning, given America’s aging population and increased reliance on hospice as an end-of-life care option.

Some of the highlights of the report include:

  • In about 20 percent of hospice claims for inpatient care, the Medicare beneficiary did not need such care at all.
  • In another 10 percent, the patient needed the higher-level care for only part of the inpatient stay, but Medicare was billed at the higher level for the entirety of the stay.
  • In one percent of stays, there was no evidence that the beneficiary elected hospice care or was even certified as having a terminal illness.
  • The investigators found that Medicare was paying hospices almost four times as much as it should have for some patients. The patients were receiving “inpatient care” when all they needed was less-expensive routine care in their homes

As in other studies, for-profit hospice providers were found to do significantly more overbilling and billing for inappropriate services than nonprofits (41 percent for for-profit hospice providers versus 27 percent for nonprofit and government-owned hospices). Here are some examples from the report:

  • A hospice billed for 51 days of GIP for a beneficiary who needed only routine home care. The beneficiary’s symptoms were under control, and she needed assistance only with personal care, eating, and the administration of medication. Medicare paid the hospice almost $30,000 for over seven weeks of GIP.
  • A hospice billed for GIP for a beneficiary with a circulatory disease who had no unmanaged symptoms. This beneficiary could have been cared for at home, but the hospice billed Medicare for 46 consecutive days of GIP in an inpatient unit. The hospice was paid just over $31,000 for the stay.
  • A hospice billed for GIP for a beneficiary in Florida who entered GIP for symptom management. Her symptoms were managed within two days, yet she remained in GIP for 15 additional days. Medicare paid close to $12,000 for this stay.

William A. Dombi, vice president of the National Association for Home Care and Hospice, a trade group that represents for-profit as well as nonprofit providers, commented on the report: “There are no real objective standards to determine when people need inpatient care. Some hospices tend to use it much more than others.” But is the problem a lack of standards, or a lack of ethics and a profit motive where it does not belong?

NPQ has been covering the growing woes of the hospice industry for years as for-profit companies posting multimillion-dollar profits have entered the scene, operating beside their nonprofit counterparts. Allegations against the for-profit players have included overbilling, cherry-picking lucrative clients, and accepting patients who aren’t even candidates for hospice care.

The goals of hospice care are to help terminally ill beneficiaries with life expectancy of six months or less to continue life with minimal disruptions and to support beneficiaries’ families and other caregivers. NPQ previously reported on a 2014 study in the Journal of Palliative Medicine that found that more than one-third of hospice patients in for-profit hospice centers were leaving hospice care…ahem, alive.

Beyond the punchy headline, a significant cohort of hospice patients being discharged alive points to a larger problem of inappropriate care being administered, causing terminally ill patients to leave, or patients being accepted into the program who are not terminally ill and may not fit the hospice program criteria. In addition to the financial impact of fraud and the misuse of program resources, enrollment in a hospice program by those who are not terminally ill may expose patients to unnecessarily powerful drugs designed for end-of-life comfort care, which in some cases could lead to an otherwise avoidable death.

NPQ covered an article in 2012 that noted that payments for hospice by Medicaid had increased precipitously over the prior six years. During the same period for-profit groups had been aggressively entering the field, 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 during that same period.

This lack of standards for care, combined with Medicare fraud being just so darn profitable, is no doubt a recipe for disaster that leaves terminally ill patients, caregivers, and families suffering the consequences.—Carrie Collins-Fadell