Business Week and The Washington Post both had interesting articles on the profitable hospice industry. Nursing homes often push hospice on residents who are not terminal. The nursing home then relies on the hospice employees to take care of the resident. Medicare-paid hospice include visits from a nurse and chaplain, plus an extra weekly bath. Much better than typical Medicaid paid services for nursing home residents. The government often pays twice for hospice patients in nursing homes — about $137 a day to the hospice provider from Medicare, and about $200 a day to the nursing facility from Medicaid, which covers the indigent elderly.
Hospice care 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. "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."
Publicly traded companies have created hospice chains through serial takeovers in the last decade. Hospice buyouts and investments by for profit private-equity firms have led to inflated enrollments and unnecessary expense. There are allegations that bribes and kickbacks are used for referrals. Nursing homes have been offered diapers, wheelchairs, nutritional supplements and other supplies in return for patient referrals. Under various federal statutes, paying for patient referrals or compensating employees based on the number of Medicare patients recruited is illegal but enforcement is nonexistent.
Under Medicare rules, patients are only eligible or hospice if two doctors certify that they have six months or less to live. They can stay on hospice indefinitely if a doctor recertifies their terminal illness every 60 days. Doctors sign off on whatever the nursing home says because they are the "eyes and ears" for the doctors.
The inspector general of the Health and Human Services Department is finally investigating hospice marketing practices and financial relationships with nursing facilities. The inquiry was prompted by a 2009 report by the Medpac commission, a congressional advisory body, that found hospices “aggressively marketed” to nursing-home patients, and paid incentives to medical directors for “inappropriate” referrals and enrollments.
The Stark Law is designed to ensure that doctors refer patients based on who provides the best care, not based on who is paying them. However, seven pending or settled lawsuits against hospice companies say that enrollment-based incentives led to admitting patients who didn’t qualify for hospice care.
The rise of for-profit hospice care since 2000 has helped drive a 60 percent increase in the average time patients spend in hospice, to 86 days in 2009, according to Medpac. The average stay of the 10 percent of patients who remained in hospice the longest soared 71 percent to 240 days. That means at least 110,000 patients weren’t facing imminent death when they were admitted. Profit margins on healthier patients who survive for years with minimal care can exceed 20 percent, according to Medpac.