What Compliance & enforcement Actions Are being Taken to Address Hospice Fraud?

hospice fraud, older person leaning on cane outside

Hospice fraud continues to be one of our top reported types of fraud in California. It is a significant problem because hospice is an important Medicare benefit – it provides terminally ill beneficiaries with palliative care focused on comfort and pain relief (versus curative care). It allows beneficiaries to experience peace, comfort and quality of life and dignity in their final days or months. Yet, it is being abused by fraudsters. Not only does this hurt the Medicare program by draining billions of dollars from the program, it directly hurts beneficiaries and their family members.

When beneficiaries are tricked into signing up for hospice, lured in by the false promises of “new expanded Medicare benefits”, or “cleaning and cooking services”, or free nursing visits to your home, even though they are not terminally ill, they suddenly lose access to all their “curative care” treatments and services. They may lose access to needed medications, have medical appointments cancelled and/or surgeries postponed, lose access to specialists and have Medicare deny payment of their claims. This can cause tremendous stress, lead to a decline in health and in some cases, has even caused death.

Our California Senior Medicare Patrol (SMP) continues to address this problem, in part, through much education and outreach about hospice and hospice fraud, and has targeted some of our outreach in Southern California hotspots, particularly in Latino communities. SMP has a network of volunteers, especially at local Health Insurance Counseling and Advocacy Programs across the state, doing one-on-one counseling and assistance with suspected fraud cases, education to groups of seniors, caregivers, and we partner with many organizations and government agencies — essentially working from the ground up to educate and empower people to prevent, detect and report fraud, including hospice fraud.

Yet what are the hospice fraud prevention efforts happening higher up in the government agencies? And in particular, what are the compliance and enforcement actions being taken to help stop the current fraud and prevent it from happening and growing? Below is a summary of current hospice fraud enforcement efforts, as published by Strategic Management Services.

Actions being taken by the government: Hospice Fraud Enforcement

As hospice is one of the most frequently targeted sectors of health care, hospice organizations are under increasing legal and regulatory scrutiny related to medical necessity complaints under the False Claims Act and the closely related Anti-Kickback Statute. This past year, the Department of Justice (DOJ) has increased scrutiny and placed the hospice sector as a top enforcement priority and views this area as one of the major causes of improper Medicare expenditures. They continue to rely in large measure on “whistleblowers” to alert them to potential frauds. The Office of Inspector General (OIG) is following up on the results of previous audits where they consistently found beneficiary eligibility issues. This past year, they launched a nationwide audit of hospice eligibility. They are reviewing hospice Medicare claims and associated documentation. This review focuses on patients who did not have a hospitalization or emergency department visit before electing hospice. 

In addition, the Centers for Medicare and Medicaid Services (CMS) has been making unannounced visits to over 7,000 hospices to ensure they are operating at the address where they are registered. They also review hospice claims after the beneficiaries’ first 90 days of care. Medicare and its contractors commonly scrutinize the claims submitted by new hospices, making it more difficult for a hospice to bill the government for inappropriate patients or medically unnecessary services. CMS also released a proposed rule requiring further analysis of the number of patients leaving hospice alive, the diagnoses provided on hospice claims, and Medicare hospice spending. They also made hospice ownership data public.

Most DOJ and OIG enforcement actions result from arrangements that implicated the Anti-Kickback Statute; all these cases were initiated by “whistleblowers.” Common situations that led to enforcement action include:

  • Giving free supplies or cash payments to a nursing home in exchange for referring patients.
  • Providing free nursing home services in return for being alerted to patients needing hospice services.
  • Paying a physician to refer patients.
  • Paying above fair market value for non-core services, which Medicaid does not consider included in its room and board payment to the nursing home.
  • Referring patients to a nursing home to induce referrals of their patients for hospice services.
  • Offering free or below fair market value goods to a nursing home to induce patient referrals.
  • Providing free or below fair market value care to nursing home patients in return for referrals.
  • Making room and board payments to the nursing home more than the nursing home would have received directly from Medicaid had the patient not been enrolled in hospice.
  • Fraudulently claiming to provide hospice services for beneficiaries who were not terminally ill.
  • Shutting down when audited and exceeded payment limits only to reopen as a new entity.
  • Failing to submit a valid provider address (i.e., the address where they’re registered).
  • Asking a patient or their family to pay for services already paid for by Medicare or Medicaid.
  • Ordering medication or tools to treat a patient, even though they are not required or unhelpful.
  • Billing Medicare/Medicaid for a more costly level of care than necessary.
  • Failing to discharge a patient when conditions improve, and life expectancy is beyond six months.
  • Signing patients for hospice care regardless of whether they are dying.

Tips for Preventing, Detecting & reporting Hospice Fraud

In addition to the “whistleblower” reports from people inside nursing homes or hospice agencies, as mentioned above, on-the-ground reports to our California SMP from beneficiaries, their families and caregivers are also key to stopping and preventing hospice fraud. Some of the common signs and red flags of hospice fraud are listed below.

  • 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 “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 cooking and cleaning.

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.

Read more on hospice fraud

Checkout, download and share our hospice fraud alert available in 8 languages. Also, below is a list of a few previous articles on hospice fraud:

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.