What is Hospice Fraud?

Medicare Part A covers hospice care when a patient is certified as “terminally ill.” See e.g. 42 C.F.R. §§ 418.20, 418.22. “Terminally ill” means that a patient’s medical prognosis is for a life expectancy of six months or less due to the patient’s particular disease if it runs its normal course. See 42 U.S.C. § 1395x(dd)(3)(A) (eff. Dec. 29, 2007); see also 42 C.F.R. § 418.3. Hospice enrollment disqualifies the patient from receiving any curative care for his or her diagnosis. But the patient can still receive treatment from his non-hospice physician for conditions unrelated to his terminal illness.

The hospice care benefit was considered at a high risk for fraud when the Affordable Care Act (“ACA”) was passed. To help reduce opportunities for hospice fraud, the ACA requires documented face-to-face encounters with every hospice patient to determine their continued eligibility. Hospice providers are required to initially certify a patient for hospice for a 90 day period. The patient must then be recertified for hospice, first for another 90 day period and then for 60 day periods thereafter. There must be documentation in the patient’s medical records that support a determination that the Medicare beneficiary satisfies the coverage conditions for hospice care – that the patient is terminally ill and beyond a cure.  Id. at § 418.22. Additionally, the patient or a guardian must sign an election statement accepting the hospice care.

The hospice must have a written plan to meet certain requirements as to the level and type of services rendered. It must then provide those services, such as physician and nursing services, speech, physical and occupational therapy, counseling and respite care.

Examples of Hospice Fraud

“The decision to provide hospice services should be prompted by a patient’s terminally ill medical condition and desire for palliative care, not a hospice provider’s desire to boost its profits,” said OIG Special Agent in Charge Gerald T. Roy.

Hospice fraud can occur in a variety of ways, including when the hospice provider engages in any of the following acts:

1. Offering the hospice benefit to a beneficiary who has not been certified by a physician to be terminally ill with a life expectancy of six months or less.
2. Inflating the level of care beyond what the patient actually needs, such as falsely documenting that the patient needs crisis care to receive the highest reimbursement rates.
3. Providing gifts to beneficiaries to encourage them to agree to a hospice level of care (even though they are unlikely to be terminally ill).
4. Ordering redundant and/or unnecessary equipment and medication.
5. Paying incentives to referral sources (such as physicians and nursing homes).
6. Billing for a higher level of care than was actually provided.
7. Billing for the most expensive level of hospice care, in-patient crisis care, when it is not medically necessary.
8. Failing to obtain a physician certification on plans of care.
9. Falsifying records to fake a physician certification.
10. Falsifying patient charts to justify admission or retention of patients.
11. High-pressure marketing of hospice services to ineligible beneficiaries.
12. Providing inadequate or incomplete services.
13. Improperly retaining hospice patients whose health is improving rather than declining.
14. Paying a bonus based on the volume of patients admitted.
15. Keeping patients on hospice care for long periods of time without medical justification.
16. Failing to conduct required patient re-evaluations.
17. Maintaining inadequate medical records that do not justify admission or retention.
18. Providing curative care to hospice patients.

Examples of Fraudulent Kickbacks

Also, hospices may not give kickbacks to nursing homes and hospitals in exchange for patient referrals. These kickbacks can take a variety of forms, such as:

1. Hospice providers supplying nursing homes with free or discounted goods or hospice services in exchange for patient referrals.
2. Hospice facilities referring patients to nursing homes in order to encourage the nursing homes to refer patients back to hospices for care at the appropriate time.
3. Hospice facilities providing free or discounted skilled nursing services to a nursing home, despite the fact that the nursing home is already receiving Medicare payments for these services. The hospice does this with the expectation that when the patient is eligible for hospice care, that hospice company will be contracted to provide hospice services at the nursing home.

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