Investigation Reveals Rampant Fraud by Privatized Hospice Groups

A Washington Post investigation into the world of hospice care published Thursday found that what was initially intended to be a peaceful end-of-life alternative led by religious and community organizations, has now evolved into a $17 billion for-profit industry ripe with scams and abuse.

Hospice care, which focuses on providing comfort to the terminally ill rather than finding a cure, is funded primarily by Medicare—which makes an estimated 85 to 90 percent of all payments to hospices.

Quick to capitalize on this booming industry, since 2000 the number of hospices run by for-profit companies has jumped from 30 percent to nearly 60 percent—with an even larger share of the patients; during the same period, Medicare expenditures on hospice jumped from $2.9 billion to $15.1 billion.

And as the Post investigation reveals, in order to maximize profits, these for-profit hospice groups have begun aggressively recruiting patients who aren’t actually dying.

“Medicare pays a hospice about $150 a day per patient for routine care, regardless of whether the company sends a nurse or any other worker out on that day. That means healthier patients, who generally need less help and live longer, yield more profits,” the Washington Post reports.

Painting a picture of an industry that has morphed from merciful to miserly, the Post describes the efforts by companies to recruit new patients:

Other companies reportedly offered employee bonuses for meeting “new patient” goals and one hospice group in LaGrange, Ga. went so far as to “cruis[e] neighborhoods, looking for elderly people with disabilities.”

“It must be strange to be told you’re dying and then not die,” said Jim Barger, a lawyer in Birmingham, Ala. who has filed a number of suits against these for-profit companies.

According to Barger, while hospice requires that two doctors initially certify that a patient carries a life expectancy of six months or less, afterwards the hospice itself is charged with re-approving their stay.

“It is common knowledge in the industry that a longer length of stay is going to be more lucrative,” Rachel Mason, who worked at Delta Hospice in California, told the Post. “If they come in very sick and die right away, it’s difficult to run a business that way.”

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