Medicare costs for hospice care have increased more than in any other health care sector as for-profit companies continue to gain a larger share of the end-of-life medical market, government records show.
From 2005 through 2009, Medicare spending on hospice care rose 70% to $4.31 billion, according to Medicare records.
A recent report by the inspector general for Health and Human Services, which oversees Medicare, found for-profit hospices were paid 29% more per beneficiary than non-profit hospices. Medicare pays for 84% of all hospice patients.
At the same time, some of the nation's largest for-profit hospice companies are paying multimillion-dollar settlements for fraud claims and facing multiple investigations from state and federal law enforcement agencies. For example:
Vitas, the nation's largest for-profit hospice company, is the subject of a fraud investigation by the Justice Department and the Texas attorney general, according to federal court filings.
Gentiva, the nation's fastest-growing for-profit hospice company, agreed last month to pay $12.5 million to settle Medicare fraud claims, Justice Department records show.
Gentiva declined to comment, and Vitas did not return phone calls.
Critics say costs have also increased because for-profit organizations have cherry-picked patients who live the longest and require the least amount of care -- such as those with dementia or Alzheimer's, rather than those with cancer.
From 1998 to 2008, Alzheimer's and dementia hospice cases grew from 28,000 to 174,000, reports the Medicare Payment Advisory Committee (MedPAC), an independent commission that advises Congress. The inspector general's report said 90% of those patients lived in nursing facilities when they entered hospice care.
"Certain hospices seem to be seeking out beneficiaries with particular characteristics, and these beneficiaries are often found in nursing facilities," said Jodi Nudelman, a regional inspector general for HHS, in a webcast about the report.
Medicare paid hospices that operated out of nursing facilities in excess of $3,000 more per beneficiary on average than it paid other hospices, she said.
Medicare pays a $143 daily flat rate for hospice patients, but they must be expected to live less than six months.
MedPAC found 44% of patients transferred back to traditional care from hospices exceeded the six-month spending cap. That suggests "above-cap hospices may be admitting patients before they meet the hospice-eligibility criteria," it said in its 2011 report to Congress.
The Center for Medicare and Medicaid Services, which administers Medicare, is considering reducing payments for hospice in nursing facilities, Nudelman said.
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