Medicare Negligence Helps Hospices Make Billions of Dollars, According to Report

Hospices perform a vital service.  They help care for dying patients.  Care that family members aren’t capable of performing, for people who don’t want to spend their last days in a hospital. But that ideal is being twisted by some hospices that are profiting from Medicare fraud, according to a recent Washington Post article.

Medical negligence may be boosting profits of corporate owned hospices

The Post states hospice care has become a $17 billion industry dominated by corporate ownership. The Post claims there are a number of for profit hospices that are defrauding Medicare by providing hospice care (and being paid $150/day, whether care is actually provided to the patient or not) to people who are not terminally ill.  The article estimates these operations are costing Medicare billions of dollars a year.

The Post reviewed records of California hospices and found that from 2002 to 2012 there was a 50% increase in those who survived care that was supposed to help them die.  They found time spent in hospice care increased dramatically, while profits for caring for these people went from $353 per person in 2002 to $1,975 ten years later.

At AseraCare, for example, one of the nation’s largest for-profit chains, most hospice patients kept on living. The following are company locations in Alabama and the percentages of patients discharged alive,

• 78% in Mobile,
• 59% in Foley, and
• 48% in Monroeville

In 2011, nearly 60 percent of Medicare’s hospice expenditure of $13.8 billion went toward patients who stay on hospice care longer than six months, MedPAC, the Medicare watchdog group created by Congress has reported.

The 2004 annual report for VistaCare, one of the larger hospice providers, states its fortunes depend on controlling costs and its ability to “maintain a patient base with a sufficiently long length of stay.” The company also warned that “cost pressures resulting from shorter patient lengths of stay . . . could negatively impact our profitability.”

Aggressive sales techniques increase enrollment

A lawyer in Birmingham, Alabama has filed several whistleblower lawsuits on behalf of clients against for-profit hospices. He told the Post the root of the problem is that a company profits when it admits patients who aren’t dying, and the hospice itself helps determine if a patient is dying or not.

While two doctors certify a patient for hospice care initially, the patient must periodically be re­approved for hospice care. The re-approvals typically are done by hospice physicians who tell patients and fill out forms indicating they are terminally ill (expected to die within six months) when in fact they are not. “It must be strange to be told you’re dying and then not die,” Barger said.

Prospective patients are often recruited by hard sell sales tactics, according to the article. At AseraCare, officials gave advice to their recruiters on how to close a deal with families who are “not ready yet” for hospice, according to a company presentation for Alabama employees. It instructed recruiters to “focus families” by stressing the urgency of a decision, and saying things like, “We only have 10 minutes left.” “Effective communication is the transfer of emotion, not information,” the presentation states.

According to recorded conversations being used as part of a whistleblower lawsuit against one hospice owner:

(A)t Angels of Hope hospice in LaGrange, Ga., audio recordings cited in the complaint described how some salespeople found patients: by cruising neighborhoods, looking for elderly people with disabilities. “How do you solicit patients?” a marketer is quoted as saying. “You see somebody sitting on the front porch in a wheelchair and you hit the brakes.”

A spokesman for the Centers for Medicare and Medicaid Services told the Post the agency is considering hospice payment reform but that no such changes will happen in fiscal 2014.