Hospice Alert: Regulatory Changes Likely, Soon

In a series of news stories starting with a piece in the New Yorker published last November, hospices, particularly for-profit hospices in certain states, are being called-out for fraudulent activity.  The New Yorker article headline begins, “It began as a visionary notion—that patients could die with dignity at home. Now it’s a twenty-two-billion-dollar industry plagued by exploitation” (referring to hospice). The focal points of the piece concern predatory marketing practices and improper (fraudulent) certification, principally on the part of AseraCare.  Two AseraCare staff filed a whistleblower complaint against AseraCare and Golden Living (formerly Beverly enterprises).  The complaint alleges among other things, excessive pressure to admit patients that were not qualified, dumping patients that did not die soon enough (on service too long), incentives to perform fraudulent acts that generated admissions, and sub-standard care.  The New Yorker article is available here: https://www.newyorker.com/magazine/2022/12/05/how-hospice-became-a-for-profit-hustle?utm_source=LeadingAge&utm_campaign=3a5c591c8c-EMAIL_CAMPAIGN_2022_02_24_05_14_COPY_01&utm_medium=email&utm_term=0_4d92d1fd96-3a5c591c8c-613223933

In February of this year, the Rand Corporation published a study regarding care experiences of family members of hospice patients, principally satisfaction with the hospice.  The study’s focus was on differences between for-profit and non-profit hospice providers.  The date came from recorded hospice quality data from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) as reported by over 653,000 caregivers across 3,100 plus hospices.  The study notes that care satisfaction among for-profit hospice providers is three points lower than the national satisfaction average for one-third of for-profit providers.  The dip is less pronounced for non-profit providers as an eighth of this group fell below the national standard in satisfaction.  The study concluded: “Family caregivers reported poorer care experiences in for-profit hospices, but reported quality of care varied among both for-profit and not-for-profit hospices; public reporting of hospice quality data is critical for identifying high-quality hospices”.  The study abstract is here: https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2801753?utm_source=LeadingAge&utm_campaign=3a5c591c8c-EMAIL_CA

Unfortunately, the kind of revelations found in the Rand study and illustrated in the New Yorker article are not new. The hospice industry has had issues with certain providers, especially large, for-profit providers, for years.  Reforms to the payment system to reign in payments for longer staying patients and a greater emphasis on qualification (certification) by disease type/diagnosis have done little to curb rapid growth in the industry and concomitant, increases in fraud.  The for-profit sector of the industry represents today, seventy percent of providers.  In 2000, the for-profit sector represented thirty percent of the provider base.  The margins for for-profit providers are often three times greater than that of non-profit hospice provider.  Medicare is the principal payer for hospice care and by structure, the daily rate can be quite lucrative if visits are managed, medications limited along with supplies, and staff productivity between RNs and other caregivers, is maximized.  Even a small hospice as noted in the New Yorker article, twenty or so patients in average daily census, can generate a million dollars in annual revenue.

As a result of these stories and studies, the major representative hospice provider organizations (LeadingAge (non-profit), National Association for Home Care and Hospice, National Hospice and Palliative Care Organization, and the National Partnership for Healthcare and Hospice Innovation released a publication with a series of hospice program integrity ideas – 34 different concepts.  For most recommendations, CMS has existing regulatory authority.  For some, regulatory authority may not currently exist requiring either congressional action or CMS promulgating new/revised regulations.  The document is available here: Hospice-Program-Integrity-Ideas_Hospice-Industry-Consensus-Final-1.13.23-

In 2013, I wrote a series of posts regarding hospice fraud and the scope and implications thereto.  I also wrote a piece on needed reforms to curb the fraudulent behavior.  That post is available here: https://wp.me/ptUlY-eH

This is the first time I have seen all major industry groups come forward with recommended regulatory reforms.  Generally, the lobbying is for less regulation and less government scrutiny via surveys and audits.  It seems to me, that these reforms are sorely needed and have been for many, many years.  It also seems to me, that the time has likely come for the industry to see some, if not all the ideas in this framework, come to fruition.