Undercurrent of fraud drives rising hospice payments

The hospice industry has become an easy target for criminals looking to stretch the definition of "terminally ill," thanks to lackluster federal oversight and a low bar for coverage, according to the Pittsburgh Post-Gazette.

Although new payment reforms that went into effect in January will taper off reimbursement after the first few months of care, legal experts say the industry is still vulnerable to fraudulent billing practices that rely on getting patients in the door, regardless of whether they are dying. The Post-Gazette cites one ongoing case in which the chief operating officer of Horizon's Hospice in Pittsburgh is accused of pressuring employees to recruit patients, even mining for beneficiaries at inner-city bus stops.  

An ongoing False Claims Act (FCA) case into billing practices at AseraCare underscores similar concerns regarding hospice services. In the potentially precedent-setting case, federal prosecutors claim the hospice provider improperly billed nearly $70 million for patients who weren't terminally ill. In 2014, the owner of an Oklahoma hospice provider was convicted for improperly billing Medicare for services by making patients' health conditions appear worse than they really were.

Spending on hospice has jumped from $2.9 billion in 2000 to $15.1 billion in 2012, and the number of for-profit hospice providers has doubled, according to the Post-Gazette. Meanwhile, the average length of stay has risen from 54 days in 2000 to 86 days in 2011. Last month, the Wall Street Journal reported that between 2005 and 2013, 107,000 patients received nearly 1,000 days of hospice care over the course of four years, representing 14 percent of Medicare spending on hospice care.

"You look at the lengths of stay at some of these places--it defies reality," Ari Yampolsky, an associate at the law firm of Constantine Cannon LLP, told the Post-Gazette.

Previous research shows that hospice care has reduced hospital costs, but the longer average length of stay has led to higher overall Medicare costs. The Office of Inspector General has called on the Centers for Medicare & Medicaid Services to reform hospice payments and reduce incentives for providers to target patients with a long length of stay.

To learn more:
- read the Pittsburgh-Post Gazette article
- here's the Wall Street Journal article

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