Medicare's most indefensible fraud hotspot: Hospice care

  • The number of hospices in the US increased by 43 percent between 2006 and 2016, but with the boom in end-of-life services, Medicare fraud also has risen.
  • Medicare fraud and inaccurate billing costs the federal government health care program as much as $60 billion annually.
  • The amount of Medicare beneficiaries receiving hospice care increased by about 53 percent between 2006 and 2016, with 1.4 million Medicare beneficiaries receiving hospice care in 2016. Spending increased by 81 percent to a level of $16.7 billion in 2016, according to a new report from the Inspector General at the Department of Health and Human Services.
Terminally ill patient Jim Staloch (R), caresses a dove on October 7, 2009 while at the Hospice of Saint John in Lakewood, Colorado.
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Terminally ill patient Jim Staloch (R), caresses a dove on October 7, 2009 while at the Hospice of Saint John in Lakewood, Colorado.

For 14 days, an 89-year-old with respiratory problems went without proper control of his symptoms. The patient experienced respiratory distress and anxiety. Another patient with dementia spent more than two weeks with uncontrolled pain. The patient's pain medication wasn't updated until day 16. It took a week for a special bed for this patient to be provided.

These distressing patient stories share two similarities: Both were Medicare recipients and both were in hospice care. Unfortunately, these are just a few of the stories of poor care and outright fraud suffered by Medicare recipients facing the end of life and requiring no more than death with dignity.

The number of hospices in the U.S. increased by 43 percent between 2006 and 2016, but so has the Medicare fraud, and it's affecting millions of people. The majority are for-profit hospices, which typically house patients 26 days longer than nonprofit hospices, and make $4,000 more because of the difference, according to a report released this week from the Inspector General's office at the U.S. Department of Health and Human Services.

The amount of Medicare beneficiaries receiving hospice care increased by about 53 percent between 2006 and 2016, with 1.4 million Medicare beneficiaries receiving hospice care in 2016.Spending increased by 81 percent within the same time frame — 2016 medicare spending for hospice care was $16.7 billion.

Medicare fraud costs the government tens of billions annually

Medicare fraud is a huge problem. The program spends more than $600 billion a year on health care for tens of millions of seniors, with fraud and inappropriate billing reaching as high as $60 billion a year. That amount is almost twice as much as the National Institutes of Health spends on medical research each year.

Even when fraud is not an issue, the rising spending on hospice services does not mean patients facing the end of life are actually receiving the proper care. Home hospices provide less than five hours of visits each week, and even less on the weekends. Of hospice beneficiaries in nursing facilities, hospices provided "fewer services than outlined" for 31 percent of claims, the HHS Inspector General's report found. Hospices also failed to provide "nursing, physician, or medical social services" for 9 percent of general inpatient care stays in 2012, according to the report.

Care planning, a "crucial" element of hospices services that outlines the scope and frequency of visits needed, is also failing. Hospices did not meet plan of care requirements in 85 percent of general inpatient care stays in 2012, the report found.

Hospice payment schemes are a rising problem

Payment fraud schemes are a rising problem, as hospices purposely bill patients inappropriately. Payment currently depends on level of care, not the amount of services provided, and some hospices are taking advantage of the system.

Hospices are cashing in on inaccurate billing, patient referral kickbacks, overcharging and billing for higher-level, more expensive care than is truly needed. The report found that hospices often charged patients for general inpatient care, the second most expensive level of hospice care, when the patients only receive home care, making as much as $521 more per day for the upcharge, the report estimated.

The National Hospice and Palliative Care Organization was guarded in its statements after the HHS Inspector General report. Its president and CEO Edo Banach said in a statement that incidents of deliberate fraud and abuse in the hospice field are "rare and isolated" but he added that they are "indefensible."

It attempted to shift the conversation to regulation in its statement. Banach said the rare incidents of deliberate fraud and abuse should be viewed separately from unintentional documentation or mathematical errors in "an extraordinarily burdensome and complicated regulatory environment."

It stated that it wants to work with the federal government to "ease the governmental red tape in order to encourage honest and law-abiding hospice providers while protecting the public from unacceptable intentional abuse. … focus government efforts on truly abhorrent providers and spare compliant programs from needless and duplicative investigation."

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