Hospice Care Fraud – Fleecing the Government on Your Deathbed

07/11/2013 // Justice News Flash: Featured Column // Kathleen Scanlan // (press release)

Hospice care has become such a common part of how Americans think about dying in the 21st Century that it’s hard to believe that as late as the cigarette-sucking Mad Men-era, a terminally ill American did not have the option of coming to a gentle end in a hospice care setting. Formal hospice programs didn’t yet exist in the U.S.

The idea of hospice care was first introduced to the U.S. by a British doctor, Dame Cicely Saunders, in the early 1960s, but hospice didn’t go mainstream until 1982, when Medicare began covering the treatment.

The word “hospice” can be traced back to medieval times when it referred to a lodging for travelers or a shelter for the weary. Today, hospice care is for people with terminal illnesses whose doctors say they have only a few weeks or months left to live.

Alternatively called palliative care, hospice care’s goal is to alleviate patients’ pain and discomfort in their remaining weeks or months, and to address their emotional and spiritual concerns. Care can be extended beyond six months with the approval of a certified hospice doctor. While two-thirds of hospice patients receive care at home, hospice treatment is also given in nursing homes, assisted living facilities, veterans’ facilities, hospitals, and prisons.

With the aging of the baby boomer generation, hospice care is growing steadily in the United States. Today there are an estimated 5,300 hospice programs located around the country. Since hospice facilities must be certified by the Centers for Medicare and Medicaid Services (CMS) to be eligible for federal dollars, it’s not surprising that the majority of programs are certified by Medicare, or that Medicare spent more than $12 billion to treat 1.7 million patients in 2009.

Like other Medicare-funded care, hospices bill through the government’s reimbursement system and Medicare pays the hospice provider directly, not the patient. In most states, low-income, terminally ill people under age 65 can receive hospice care through Medicaid. Payments are likewise made directly to the provider and not to the patient.

Significantly, while we think of palliative care as being an act of kindness and mercy on the patient’s death bed, only 34 percent of Medicare hospice providers are not-for-profit, while 60 percent are for-profit, as of 2011, according to the National Hospice and Palliative Care Organization (NHPCO). There’s big money to be made when there’s nothing certain in life except death and taxes.

Now that palliative care is a billion-dollar federally-reimbursed undertaking spawning huge franchises with dozens of care locations, fraud has inevitably followed.

• A doctor is given financial remuneration by a hospice company for referring patients to hospice facilities regardless of whether they are actually terminally ill.

• Doctors and employees enroll patients and bill Medicare for patients who are ineligible for Medicare hospice treatment. This may be because they were never terminally ill or they weren’t discharged when it appeared that they were no longer terminally ill (in other words, their health improved and their diagnosis changed).

• Hospice providers classify patients, saying they need “continuous” or “crisis” care, which is reimbursed at higher rates than ordinary care. In one case, a company billed Medicare for more-expensive “crisis” care for days when the patient was actually playing bingo.

• Hospice care facilities and companies pressuring their employees to aggressively market to Medicare enrollees and to meet certain enrollment and treatment goals regardless of the patients’ diagnosis. In one recent case, a national for-profit hospice chain offered a massage chair as a prize to the employee who met a certain patient admission goal.

Even though hospice is still relatively new in our society, fraud in caring for Americans as they die has all the makings of a growth industry. Fighting the building wave of fraud in hospice care will require employing the same tools that have been used to fight other kinds of fraud on the government for more than 150 years, including the False Claims Act.

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