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Medicare Hospice Care: Valid End of Life Decisions or Fraud?

Elderly patients rely on the care and guidance provided to them by many of the hospice care centers throughout California. Although many hospice care services are provided by legitimate and patient-centric care service locations, there still remains a contingent of nefarious hospice operators that attempt to take advantage of the elderly population. A Los Angeles Times article written by Kim Christensen and Ben Poston on December 9, 2020, had noted that "regulators have cited hospices in California more often than anywhere else in the country for the most serious types of violations, four times as many as states such as Texas and Georgia, which also have large numbers of providers." In addition, The Times’ analysis revealed that Los Angeles County hospices discharged patients 80% more often than providers nationwide, highlighting a rate that federal authorities say is a red flag for Medicare fraud.


In one specific case of fraud, an investigation into Covina-based California Hospice Care was conducted by the United States Department of Health and Human Services, OIG; the Federal Bureau of Investigation; the California Bureau of Medi-Cal Fraud & Elder Abuse; and IRS Criminal Investigations Division. The case was prosecuted by Assistant United States Attorney Steven Arkow of the Major Frauds Section and Assistant United States Attorney Leon W. Weidman, Special Assistant to the United States Attorney. Federal prosecutors accused California Hospice Care of defrauding taxpayers out of $7.5 million in illegal payments in connection with many ineligible Medicare recipients. The hospice owner and two doctors were sentenced to prison, and several others were convicted or pleaded guilty in the scheme. https://www.justice.gov/usao-cdca/pr/organizer-9-million-scam-sentenced-8-years-federal-prison-scheme-provide-hospice


California Governor Gavin Newsom signed into law two pieces of legislation intended to improve hospice oversight in the state of California on October 4, 2021. The laws were partly derived from the U.S. Department of Health and Human Services, Office of Inspector General’s (“OIG”)Hospice Deficiencies Pose Risks to Medicare Beneficiaries” report and a Los Angeles Times investigation into alleged misconduct among California hospice providers.


The OIG’s report reflected that 723 California hospices were audited over a four year period between 2012 and 2016. 94% of those audited had at least one deficiency, but more significantly, 313 hospice facilities nationwide were designated as “poor performers.” The States of California and Texas reflected the largest number of poor performers at 45 and 39 facilities, respectively.


California legislators Senator Ben Allen and Assemblymember Jacqui Irwin proposed Senate Bill No. 664 and Assembly Bill No. 1280, respectively. Senate Bill No. 664 includes a moratorium on new hospice care licenses issued by the California Department of Public Health. Commencing on January 1, 2022, the Department will not issue any new licenses for hospice services unless the Department makes a written finding that an applicant has shown “demonstrable need for hospice services in the area where the applicant proposes to operate based on the concentration of all existing hospice services in that area.” The moratorium on new licenses will end either (i) 365 days from the date that the California State Auditor publishes a report on hospice licensure or (ii) when the provisions are repealed on January 1, 2027, whichever is sooner. Current licensure renewal will not be impacted by the moratorium.


The California State Auditor’s website will provide independently developed and verified information related to the California Department of Public Health’s (“Public Health”) and the Department of Health Care Services’ (“DHCS”) licensure and oversight of hospice care providers. The audit will include, but will not be limited to, the following activities: assessing the scope of hospice fraud and abuse in California and the impact of such fraud on the Medicare and Medi-Cal (i.e. Medicaid) programs, evaluating reporting of hospice abuse and neglect in California and, to the extent possible, assessing compliance with mandated reporting requirements, and evaluating the effectiveness and comprehensiveness of Public Health’s system to screen and license applicants for hospice licensure. Assembly Bill No. 1280 prohibits a hospice provider, employed hospice staff, or an agent for the hospice from paying referral sources for patient referrals to the hospice. Payment for these referrals includes “anything of value, including cash, gift cards, prepaid cards, or remuneration of any kind.” Further, to ensure that patients receive the right care that addresses their needs, only a registered nurse, licensed vocational nurse, medical social worker, chaplain, or counselor employed by the hospice can complete a patient’s “election of hospice, informed consent, completed signatures, and counsel on the election of hospice to a patient, patient’s family, or patient’s representative.”


California statutes under the California Code of Regulations, Title 28, Section 1300.68.2 View Document - California Code of Regulations (westlaw.com) relating to "Hospice Services," Section (b) outline the requirements which hospice services must follow to ensure compliant services.


The Times article indicated that Fraudsters stick to a familiar script, enticing or duping Medicare recipients into signing up for services they don’t need...t[T]hey send recruiters door to door and to churches, food banks, senior centers and apartment complexes, often misrepresenting hospice as an “extra” Medicare benefit that pays for nursing visits, hospital beds or other needs.


In conclusion, although many hospice service centers provide compliant and patient-centric services to their respective clients, diligence is necessary on the part of the beneficiary and family members alike to ensure their loved ones are receiving the appropriate care.


This article is provided for the educational and informational benefit of the reader and is not a recommendation for any medical care or legal advice. If you have any questions regarding actions pertaining to the aforementioned article, consultation with a licensed medical provider or an attorney is suggested.


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