In September, the Centers for Medicare and Medicaid Services (CMS) increased its oversight of Medicare’s hospice benefit in four states by expanding prepayment medical review in Arizona, California, Nevada, and Texas. To help reduce burden on compliant providers, CMS said in a statement that initial review volumes will be low and adjusted based on results. But for noncompliant providers, they “may implement extended review or take additional administrative actions.” (See CMS’ fact sheet on Expanded Prepayment Review.)
Prepayment reviews allow CMS to examine claims for services prior to payment and issue an initial determination based on the results. This prepayment review is critical to address the explosion of hospices and hospice fraud that’s happened and the billions of dollars in fraudulent payments that have gone to scammers as a result. For example, initial claims data for hospice in 2023 alone show $3 billion in Medicare payments, of which over $1.4 billion was paid to noncompliant, low quality hospices. These prepayment reviews slow down or halt automatic payments and add another layer of oversight to help stop the flood of fraud.
CMS’ recent action builds upon a Provisional Period of Enhanced Oversight and other measures implemented in 2023 to crack down on hospice fraud, waste and abuse in these states. In July 2023, CMS disclosed that the number of newly enrolled hospices has increased significantly in the region, raising “serious concerns about market oversaturation”.
Here are some examples:
- According to CMS data, Medicare-certified hospice growth in California’s Los Angeles County between 1983-2024 was more than that of 36 states’ growth combined.
- The California State Auditor’s report released in March 2022 noted an explosive growth of for-profit hospice agencies in Los Angeles County that was fueled by fraudulent providers.
- Los Angeles County had 1,841 hospice agencies in 2022, which was a 1,589% increase since 2010, and a flood of thousands more hospice applications.
- Unnecessary and unrealistic numbers of licensed hospices are often in very close proximity of each other or even sharing the same address. For instance, 112 different licensed hospice agencies were using the same physical address in Van Nuys, California, with close to another hundred within 1 mile of each other.
The enhanced oversight that started in 2023 applies to any new hospice or those submitting a change of ownership. A provider placed under enhanced oversight could be subject to additional payment reviews, medical reviews, claim denial or deactivation of Medicare enrollment in serious cases. According to CMS, a single enhanced oversight period could last between 30 days and one year, varying depending on the hospice.
CMS has launched a number of other anti-fraud initiatives in addition to the Provisional Period of Enhanced Oversight in recent years. It recently unveiled the Hospice Outcome and Patient Evaluation (HOPE) tool, which will allow regulators to better spot hospice providers with poor quality of care. The agency also plans to impose a Special Focus Program aimed at identifying and terminating poor-performing hospices.
In California, Governor Newsom has extended a moratorium on licensing any new hospices until 2027. This moratorium and the increased oversight from CMS is already making a difference.
In 2023, California had over 3,300 certified hospices and our state is now at 2,889. And, our California Senior Medicare Patrol (SMP), in large part due to the tireless work and advocacy efforts of our SMP partner, Sheila Clark, CEO and President of California Hospice & Palliative Care Association (CHAPCA) is catching the attention of CMS’ leadership regarding the dire situation of hospice fraud, not only in the huge loss of Medicare dollars but also in beneficiary harm and loss of access to critical health care treatment and services.
In late September, Sheila Clark organized and presented at two roundtable events with CMS leadership, where Tatiana Fassieux discussed what California SMP is seeing on the ground. In addition, Clark gathered a group of passionate, credible hospice and medical professionals to speak about their struggles with hospice fraud, having care disrupted and challenges with getting their patients to care they’re entitled to. CMS officials listened in earnest and asked everyone to give a suggestion they could consider to improve and hone their tactics to stop hospice fraud. We’re advocating for every beneficiary who is enrolled in hospice (knowingly or unknowingly) to receive a letter from CMS telling them that they are enrolled in hospice, and if they had questions to call Medicare or their local State Health Assistance and Information Program (SHIP), which is the Health Insurance Counseling and Advocacy Program (HICAP) in California.
This provision of providing a written notice to beneficiaries within 15 days of a hospice election, is also included in Congressman Earl Blumenauer’s recently introduced Hospice Care, Accountability, Reform and Enforcement (Hospice CARE) Act.
In so many cases of fraud, beneficiaries and their caregivers have no idea they’ve been enrolled in hospice until they go to get a prescription, or show up for a scheduled surgery or dialysis only to be told they’re no longer covered because they’re in hospice. This is not only disruptive to a person’s medical care, it can also quickly turn life-threatening if people who are not terminally ill are denied the curative treatment they need. Having a letter/notice sent to a beneficiary once enrolled in hospice would be another avenue for alerting people to fraud and allow them to more quickly take action to report the fraud and return to their full Medicare benefits (versus hospice which only covers palliative care). We’re also advocating for a Congressional hearing to help bring the seriousness of this type of fraud to our Congress people and get more legislative protections.
The Hospice CARE Act, which proposes major changes/reforms to the Medicare hospice benefit focused on enhancing program integrity and oversight and addressing fraud, would also:
- Reduce hospice daily rates
- Provide an extension of oversight of newly-enrolled hospice programs
- Payment add-on for high acuity palliative services like dialysis, chemotherapy, radiation and blood transfusions
- Ensure independence of certifications of terminal illness by requiring a physician, nurse practitioner, or physician assistant that does not have such a relationship (employment, ownership, or financial) with the hospice to certify terminal illness for the initial 90-day benefit period
- Ban on payment to hospices who do not submit quality data
- Implement a nationwide new hospice moratorium to combat fraud
For more information on all the proposed changes in the Hospice CARE Act, see Congressman Blumenauer’s press release, fact sheet and/or read the bill text.
A Reminder on Red Flags to Watch for to Prevent Hospice Fraud
As we continue to work on all levels to stop hospice fraud, on-the-ground awareness is key to preventing this fraud for you and your loved ones. Here are some red flags to watch for:
- Beware of hospice companies enrolling patients who do not have a terminal illness with 6 months or less to live. Medicare’s hospice benefit is only for those who are terminally ill.
- Don’t get tricked by hospice companies offering free services such as housekeeping and cooking. Medicare does not pay for this!
- Watch out for offers to sign up for “palliative care” only. Palliative care is part of the Medicare hospice benefit. If someone signs you up for “palliative care,” they are signing you up for hospice.
- Watch out for “freebies”, such as bus coupons, medical equipment, food supplements or even payment for enrolling into hospice. These are all scams.
- Beware of calls or unannounced visits by hospice companies offering additional benefits such as help with cleaning or “free” nurse visits.
If you or someone you know comes across such scams, report any suspected hospice or other Medicare fraud to our California SMP at 1-855-613-7080.
More Resources on hospice fraud
Checkout, download and share our hospice fraud alert available in 8 languages. Also, we have a Hospice Fraud Prevention Toolkit for Outreach to Hispanic/Latino Communities. Check it out and share the flyers, video and radio PSAs. In addition, below is a list of some previous articles on hospice fraud:
- What Compliance & Enforcement Actions Are being Taken to Address Hospice Fraud?
- Got Hospice Questions? Learn What it is & What It’s Not
- Beneficiaries Pay the Price for Hospice Fraud
- Hospice Matters & Hospice Fraud Harms
- Hospice Harms Medicare Beneficiaries
- Have You Been Tricked into Signing Up for Hospice?
