The Explosion of Hospice Fraud and the False Claims Act

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One area of health care where there have been a handful of whistleblowers recently is hospice fraud. Hospice spending has exploded from nearly $3 billion in 2000 to over $15 billion in 2012, according to a Pittsburgh Post-Gazette article on hospice fraud published yesterday.

If fraud prosecutions are any measure, there has been a fair amount of government money wrongfully paid out by Medicare for end of life care among the billions reimbursed by the federal government. There have been more than 60 cases involving hundreds of millions of dollars nationwide in the last year alone.

The False Claims Act is one type of lawsuit that can hold wrongdoers accountable. It offers whistleblowers rewards for reporting health care fraud against the government. If a provider is wrongfully submitting claims for reimbursement of patient treatment that does not meet Medicare or Medicaid standards, reporting it through a qui tam lawsuit obligates the government to pay an eligible individual between 15 and 30 percent of the recovery.

If you work for a hospice care provider, hospital or nursing home and you have evidence that your employer is violating the False Claims Act, please contact one of our False Claims Act attorneys for a free, confidential initial legal consultation.

Medicare allows people expected to live less than six months because of a terminal illness to stop curative treatment and receive palliative care at home, a nursing home, or another facility. If an individual does not have a terminal prognosis of six months or less, they are not eligible for the benefit.

According to the Pittsburgh Post-Gazette, the increase in government spending in this area corresponded with the entry of several for-profit providers into the market for end of life care. Since 2000, the number of for-profit hospices has doubled and the average stay has increased to 86 days from 54 days. According to a MedPac report, the average stay in a for-profit hospice in 2013 was nearly 50 days longer than a nonprofit.

There have been a number of changes recently in the program to help address the fact that patients are in the program longer.

One of them is the Medicare Care Choices Model. The pilot program allows thousands of patients to receive hospice services while continuing to seek treatment for their illness. For these patients, the program will end the difficult choice between whether to seek life-sustaining treatment or end-of-life hospice care. Over 140 Medicare-certified hospices were invited to participate in the program with an anticipated duration of 5 years. The patient must have meet certain criteria, including diagnosis with certain terminal illnesses such as advanced cancers. congestive heart failure, COPD, or HIV/AIDS.

Another change that has been made is a two-tiered per diem payment for hospices. Medicare will offer a higher payment for care during the first 60 days and a lower daily payment for care after 60 days. It is hoped that this payment model will appropriately compensate facilities which take patients near the end of their life for the additional work and discourage the admission of payments who are likely to have long stays in hospice. To incentivize appropriate treatment within the last seven days of a hospice patient’s life, it added a billing rate for high-intensity services for up to four hours per day during the final week of life. The per diem changes went into effect at the beginning of 2016.

Nevertheless, one of the best ways to slow government spending in this area is for insiders to report it through the available whistleblower law: the False Claims Act. This holds health care organizations accountable for the failure to appropriately bill the government. To speak to one of our False Claims Act lawyers confidentially about this program, please call (800) 590-4116.