Hospice Fraud and Abuse Front and Center

Since I started this site, a topical area that has been a constant for me is hospice and in particular, fraud and abuse. Recent cases have again put Hospice fraud and abuse, front and center. Thematically, the cases are different and the same in so much that they involve improper billing of hospice cases to Medicare.  The differences are “how” the improper billing took place.

The year 2023 marked a significant milestone in hospice reform. Driven by media coverage, congressional correspondence, and advocacy group lobbying, the Centers for Medicare and Medicaid Services (CMS) enhanced their supervision of end-of-life care. They revamped inspections to prioritize care quality, disclosed ownership information publicly for the first time, and initiated a campaign to visit every hospice provider nationwide, reaching 7,000 locations. Subsequent to these visits, 46 hospices that were not operational had their Medicare billing rights rescinded.

In July 2023, CMS launched a special enforcement program aimed at hospices in Arizona, California, Nevada, and Texas—states experiencing significant increases in provider numbers. This surge in hospices sparked concerns both within and beyond the agency regarding fraudulent billing for unnecessary services and market saturation.

So far, the focus on hospices in these states has done little to slow agency growth. CMS data shows that Arizona, California, Nevada, and Texas continued to grow faster than all other states with two-thirds of new certifications occurring in these states. Leading national hospice trade associations have consistently advised that Medicare should establish a moratorium on the certification of new hospices in counties ripe with dubious startups. They argue this action would block unscrupulous entities from tapping Medicare resources, allowing regulators to probe into suspect networks. Medicare Certifies Hospices in California Despite State Ban on New Licenses — ProPublica

Earlier this month, in Los Angeles, five individuals were apprehended on criminal charges for their involvement in a multi-year fraud scheme. They are accused of swindling Medicare out of over $15 million via fake hospice companies and subsequently laundering the proceeds of the fraud.

The indictment revealed accuses three individuals—Petros Fichidzhyan, Juan Carlos Esparza, and Karpis Srapyan, 34, all from California—of running a network of fake hospice companies. These companies were claimed to be under foreign ownership, but in reality, the trio owned them. They are charged with using the personal information of these foreign nationals to establish bank accounts, sign property leases, and in Fichidzhyan’s case, communicate with Medicare. They are also accused of filing fraudulent Medicare claims for hospice care services. The Department of Justice press release on this case is here: Office of Public Affairs | Five Individuals Arrested for Defrauding Medicare of Over $15M Through Sham Hospices and Money Laundering | United States Department of Justice

In an unrelated case, Tapestry Hospice of Northwest Georgia, LLC, along with its owners and managers David Lovell, MD, Stephanie Harbour, Ben Harbour, and Andrew Nall, have agreed to pay $1.4 million to settle claims that they breached the False Claims Act. This agreement comes after allegations that they engaged in kickback schemes with medical directors to secure patient referrals for Tapestry.

The case originated with a whistleblower complaint by a former Tapestry employee, who alleged that the company provided kickbacks to medical directors to encourage patient referrals to Tapestry. The purported kickbacks consisted of monthly stipends and a signing bonus for the medical directors, with compensation reportedly rising with increased referrals and diminishing when referrals were not made. The press release from the U.S. Attorney’s Office, Northern Georgia District is here: Northern District of Georgia | Tapestry Hospice Settles Healthcare Kickback Claims for $1.4 Million | United States Department of Justice

The Centers for Medicare & Medicaid Services (CMS) has implemented heightened penalties in the finalized 2024 hospice rule for non-compliance with quality reporting requirements. Starting this year, hospices that fail to report their quality measures will incur a 4% reduction in payments, an increase from the previous 2% penalty. More on the Hospice proposed 2025 rule and the 2024 rule is here: Wednesday Feature: Hospice Proposed Rule for 2025 – Reg’s Blog (rhislop3.com)

An excellent piece on hospice fraud and abuse was done in 2022 by Pro Publica. Literally, half of all U.S. citizens now die while in hospice care. The Pro Publica piece is here, and I highly recommend reading it: How the Hospice Movement Became a For-Profit Hustle — ProPublica


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