Medicare Fraud Runs Rampant in Hospice Care

Medicare fraud runs rampant in hospice care; woman in wheelchair beside nurse over blue background

One area of healthcare that runs rampant with fraud is hospice care. Hospice care is reserved for people who are within the last six months of their life and may receive treatment in their home or at a hospice facility. Medicare fraud committed by hospices costs the government tens of billions annually. The Office of the Inspector General recently released a report detailing the deep problem of Medicare fraud occurring in hospice care.

What did the report find?

Here are a few important findings of the report performed by the Office of the Inspector General:

  • The majority of Medicare fraud is committed by for-profit hospices.
  • For-profit hospices typically house patients 26 days longer than nonprofit hospices.
  • For-profit hospices make about $4,000 more per day as a result.
  • Rising costs do not necessarily mean patients are receiving better care.
  • Hospices did not meet requirements in 85 percent of inpatient care in 2012.
  • Hospices often upcharge patients by charging them with general inpatient care when they only received home care, resulting in hundreds of extra dollars of revenue per day.

How many people use hospice care?

According to CNBC, 1.4 million Medicare beneficiaries received hospice care in 2016. During this year alone, Medicare spending for hospice services was $16.7 billion. Hospice care has increased 43 percent between 2006 and 2016, but cases of fraud have occurred at nearly the same rate. During this 10-year period, Medicare spending increased 81 percent. However, rising costs do not necessarily mean patients are receiving better care. In fact, the opposite may be true.

How do hospices commit fraud?

Hospice fraud usually occurs in paperwork and inappropriate billing. Hospices charge patients based on the level of care received, not by which services are rendered like in most areas of healthcare. This allows hospices to charge higher rates for fewer services and less care.

As of 2018, hospice fraud cases have been settled out of court for amounts ranging between $3 million to $72 million. The Department of Justice opened 967 new criminal and 948 new civil healthcare fraud investigations during the 2017 fiscal year.

Responses from the National Hospice and Palliative Care Organization (NHPCO)

Mark Schlein, an attorney in Los Angeles who handles hospice fraud cases, said, “It’s fair to say that most companies engaging in fraud or cheating the government recognize that getting caught and paying a fine has become a cost of doing business.”

Edo Banach, president and CEO of NHPCO said fraud and improper billing may exist, but they are “not rampant.”

Regardless, hospice care providers are encouraged to prepare for increased oversight and new policies in the near future.

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