Hospices, nursing homes are rife with fraud potential
MEDICARE FRAUD
Since Medicare covers palliative care to terminally ill patients, the relationship between for profit hospices and nursing home operators is rife with potential for fraud, according to the Office of the Inspector General. Residents can report Medicare and Medicaid fraud by calling 1-800-581-1790.
In some ways, Medicare’s setup contributes to the problem.
How Does the System Work?
Medicare provides palliative care in the form of hospice benefits to individuals who are terminally ill. That means the emphasis is on pain control, symptom management and individualized counseling for not only the patient, but his or her family, too.
In the last 20 years, the number of U.S. providers has roughly doubled, while Medicare spending on hospice has grown sixfold, to $19.2 billion a year. More than 1.5 million Medicare beneficiaries now receive care from some 5,000 hospices, nearly a quarter of them in California.
Nearly all of the growth is of for-profit hospice providers, which are crowding out the local nonprofits.
For-profit operators now make up 70 percent of all hospices certified by the Centers for Medicare and Medicaid Services and 91percent of those in California. In Los Angeles County, they account for 97 percent, according to a Dec. 9 article in the Los Angeles Times.
A Medicare patient is eligible for Medicare Part A services only if he is entitled to these services (usually age 65) and his doctor has certified he’s terminally ill.
That means he has received a prognosis of life expectancy that is less than six months. Enrollment also disqualifies the patient from receiving any curative care. The hospice must meet level and type of service requirements as well and have a written plan to fulfill them. Typical service requirements include physician and nursing services, speech, physical and occupational therapy, counseling, and respite care as examples.
Although some of the core hospice services must be provided by the hospice directly to the patient, others may be provided by caregivers. However, all must be under the management of the hospice provider.
How is Hospice Care Reimbursed in Nursing Homes Most of the time, hospice care services are provided to beneficiaries in their home. As a result, Medicare makes no special allowances for such services when provided in a nursing home.
As such, hospices receive the same rates when they provide their services in a nursing home as they would in a home-based delivery. This is a fixed amount per day regardless of the quantity or intensity of services delivered.
However, the beneficiary must pay his own room and board, unless he’s eligible for Medicaid benefits for those charges. When he receives hospice care in the nursing home, however, Medicaid pays the hospice 95 percent of the state’s daily nursing home rate and the hospice pays the beneficiary’s room and board.
Each state’s own Medicaid program determines which services must be included in the hospice’s program. One other thing: the hospice may contract with the nursing home to provide some of the non-core hospice services that it may lawfully outsource.
Potential for Medicare Fraud in the Nursing Home-Hospice Relationship The largest area for potential abuse in this relationship between hospices and nursing homes stems from the nursing home’s control over whom it will allow to provide hospice services in its facilities.
A hospice can derive substantial and recurring revenue if it has an ongoing exclusive contract to serve a large nursing home’s patient base. This situation is ripe for the offer or request of financial kickbacks, incentives and other lucrative means to both parties.
A nursing home’s captive residents can represent an endless supply of hospice patients.
Records show that patients receiving hospice care in nursing homes, on average, receive a longer course of treatment than home-bound hospice patients.
Another problem is that an overlap of services may exist in a nursing home. In this scenario, some of the services the hospice would be obliged to provide to its home-bound patients may be provided, either inadvertently or by design, by nursing home staff.
An OIG study showed that it’s sometimes the case that nursing home hospice patients receive fewer services than their homebound counterparts. And since hospice providers are paid a flat rate, providing fewer services may positively affect their profitability and lessen their operating costs.
Kickbacks to Influence Medicare or Medicaid Referrals As in many health care fields, kickbacks are strictly prohibited by federal health care programs, including Medicare and Medicaid.
The anti-kickback statute strictly prohibits the solicitation, receipt, offer or payment of “anything of value” to induce referrals of items or services payable by any federal health care program.
One particular area the OIG has observed as a potential source of abuse is when a hospice is paid a higher daily rate for a patient it refers to a nursing home. The law states that a hospice patient should be charged no more than if he had been enrolled as a nonhospice patient. Any additional charges must be in line with the fair market value for the services he received and must not be included in the Medicaid daily rate.
Some Practices that Prevail in these Fraudulent Schemes:
• A hospice free or below fair market value goods or services to get a contract with a nursing home
• Hospice paying higher than normal room and board rates for its hospice patients
• Hospice patient referrals to a nursing home as an inducement to the nursing home to its patients to the hospice
• Hospice providing care that would normally be provided by the nursing home, thus reducing the nursing home’s staff costs
• Hospice paying the nursing home for additional services that should be included in its Medicaid paid daily room and board service list The OIG pointed out that anti-kickback violators face severe consequences, including criminal prosecution, monetary penalties, and possible exclusion from federal health care programs and benefits.
