Bloomberg Exposes Medicare Hospice Fraud "Boom"

Bloomberg investigative reporter, Peter Waldman, recently exposed what many medical professionals have known for some time: hospice is a huge business fueled by Medicare and Medicaid billing fraud. In a December 5 story entitled “Aunt Midge Not Dying in Hospice Reveals $14B Market” that has rapidly made its way around the Internet, Waldman reports:

“Hospice care, once chiefly a charitable cause, has become a growth industry, with $14 billion in revenues, 1,800 for-profit providers and a base of Medicare-covered patients that doubled to 1.1 million from 2000 to 2009.”

The Bloomberg story chronicles the plight of Janet Stubbs, who “didn’t know that her aunt, Doris Midge Appling, was admitted to Hospice Care of Kansas during the company’s “Summer Sizzle” promotion drive, which paid employees as much as $100 a head for referrals.” For many who have experienced hospice as it was intended — palliative and comfort care for near-death patients and their families — it is shocking to learn that hospice care is promoted like the sale of used cars or mattresses.

But where there are endless amounts of taxpayer dollars for the taking, there will be those who line up with hands outstretched like crazed shoppers at a Black Friday sale. And it’s the patients and their families who suffer, because medical judgment gets thrown out the window in the frenzy of such “Summer Sizzle” hospice sales events:

“It doesn’t seem right,” Stubbs told Waldmen. “What incentive did the doctor have to put my aunt on hospice? How much was she being paid?”

Bloomberg’s investigation reports that the incentives for false certification of terminal illness are apparently huge:

“Compensation based on enrollment numbers, pay to nursing- home doctors who double as hospice medical directors, and gifts to the nursing facilities have helped fuel the boom, according to an examination of 1,000 pages of court documents and interviews with more than 45 current and former hospice employees, patients and family members.”

The “boom” to which Waldman refers is an industry where death has become a commodity to be bought and sold on the open market. One former hospice chaplain told Waldman that doctors were paid “$3,000 or $4,000 a month from a hospice to work one day a week” and that the natural result was for doctors to refer their patients to the hospice company. “They wanted us to admit, admit, admit,” Waldman reports that a former marketer for Vitas Healthcare, said. “All of us competed against each other to make our numbers. You lived or died by your numbers.” Vitas Healthcare operates the hospice brand of Chemed Corporation, whose other division is RotoRooter, the septic cleaning service chain.  A salesperson for another large corporation apparently told Waldman, “There was always pressure to get the patient census up, any way we could, to sell the company.”  Yet another hospice worker told Waldman that her supervisors instructed her: “Put everyone on hospice, don’t ask questions and build!…“They were there to make a buck.”

Most people would be shocked at the idea of marketing and salespeople in hospice, but in many of the big businesses, marketing and sales make-up a large part of their employee force.  And the leadership and equity investment behind such sales efforts comes from the ethically-challenged culture of Wall Street.  According to Waldman:

“Publicly traded companies like Chemed and Gentiva Health Services Inc. (GTIV) have created hospice chains through serial takeovers in the last decade. Hospice buyouts and investments by private-equity firms have also led to boosted enrollments.

Funding from Kohlberg Kravis Roberts & Co. enabled closely- held Harden’s acquisition of Hospice Care of Kansas’s parent last year. The seller: private-equity investor Apax Partners, ofLondon and New York.”

In addition to the “Summer Sizzle” event, Waldman discovered numerous other hospice sales blitz events around the country such as “Christmas Cash Blitz” and “Fall Frenzy” hospice admission drives at various companies. When care for the dying is described with words like “sizzle” and “cash blitz” and “frenzy”, it should be abundantly clear that the system is out of control.


To report hospice fraud or other Medicare fraud, contact Frohsin & Barger.