Medicare Moves To Crack Down On Hospice Fraud

WELLNESS - After a year of scrutinizing fraud in the hospice industry, Medicare dropped the hammer this week: The agency warned nearly 400 hospices are at risk of being bounced from the program if they can't prove they're a legitimate enterprise. 

Why it matters: The move to root out fraudulent hospices, following years of reports about shady practices in the industry, signals that federal officials are aiming to crack down on unscrupulous actors cashing in on Medicare's $22 billion per year end-of-life care program.

The big picture: The Centers for Medicare and Medicaid Services cited the growing popularity of schemes in which providers, sometimes listed at false addresses, fraudulently claim they are providing hospice care for patients who are not terminally ill. 

• Agency officials also pointed to another type of fraud, known as "churn and burn," in which hospices shut down and reopen as a new entity once they've been audited or hit payment limits. 
• Hospices that can't demonstrate their compliance by submitting a valid provider address could be deactivated or revoked from Medicare, CMS said Tuesday.
• It's too soon to say how quickly punishments may come down. The time hospice providers will have to come into compliance will vary, a CMS spokesperson told Axios. 

State of play: CMS said it made unannounced visits to more than 7,000 hospices through a new oversight initiative to make sure hospices are operating at the address where they're registered. 

• CMS earlier this summer also announced increased oversight of claims from newly enrolled hospices in Arizona, California, Nevada and Texas, which it says are hotspots for potentially fraudulent actors.
• CMS will also start a broader pilot program to review hospice claims after a patient's first 90 days of care, saying the shorter window will help determine if claims are legitimate.
• Regulators have proposed additional oversight of poor-performing hospices and criminal background checks for new hospice owners. 
• CMS also retooled its hospice survey process to focus on quality of care and made ownership data for Medicare-certified hospices publicly availableearlier this year.
• Congress in recent years also approved several changes to the hospice survey and oversight process. 

Zoom out: Government investigations over many years have shown "significant problems" with the industry, including inappropriate billing practices, poor care quality and rapid growth in new hospices, according to federal health oversight officials.

• California officials enacted sweeping hospice reforms, including a moratorium on new hospice licenses, in 2021 following an LA Times report of suspicious growth and increased fraud among hospice providers in the state.
• A November article from ProPublica and the New Yorker shined national attention on how fraudsters are drawn to the industry. 

What they're saying: Leading hospice industry groups say they welcome CMS enforcement action, and some of the oversight recommendations they made to CMS this winter have been adopted. 

• "A bad image for hospice hurts good guys" in the industry, Bill Dombi, president of the National Association of Home Care and Hospice, told Axios. "We see it as an essential responsibility of our organization to weed out the bad actors."
• One industry recommendation CMS hasn't taken up is a moratorium on new hospices in regions with an explosion of new providers.
• Meanwhile, some industry critics say hospice companies should take more responsibility for putting profits ahead of care quality amid the growth of investor-owned firms in the industry. 
• "Consistently missing are any expressions of responsibility or commitments to set standards and monitor the quality of hospice programs," Ira Byock, past president of the American Academy of Hospice and Palliative Care Medicine, wrote in a STAT op-ed this week. 

Yes, but: While hospice trade groups say they welcome new program integrity requirements, they also argue some of CMS' increased oversight is unfairly falling on good actors. 

• "We're not afraid of scrutiny," said Logan Hoover, vice president of policy and government relations for the National Hospice and Palliative Care Organization. But he said CMS has spent "a lot of time focusing on strong, authentic, high-quality providers."

(Maya Goldman Focuses on health policy issues in Congress and the federal agencies, including Medicare payment, telehealth and price transparency. email: [email protected]  This article first published in AXIOS.)