The Changing Face of Hospice Providers

Hospice services began as a cause, a movement in which volunteers helped patients facing terminal illness. The organizations that provided hospice services were charities, but today the hospice services are big business. According to the March 2014 report of the Medicare Payment and Access Commission (MedPAC), the number of not-for-profit hospices has remained constant from 2000 (1,324) to 2012 (1,313), while the number of for-profit hospices has increased more than 300 percent, from 672 in 2000 to 2,196 in 2012. The number of patients using hospice services also has grown substantially; about 47 percent of deaths now occur while a patient is in hospice care, compared to about 23 percent in 2000.

Hospice services include skilled nursing, nurse aide or home health aide visits, pain management, counseling, spiritual support, and other palliative care.  The Medicare and Medicaid hospice benefits are available to individuals who have been diagnosed as terminally ill with an anticipated life expectancy of six months or less. The services are  provided in a patient’s home, which may be an assisted living facility or nursing home. The benefit includes four levels of care, from routine to 24-hour services in times of crisis.

Longer Stays

As we have discussed previously, the average length of stay in hospice care has increased as use of hospice services has spread from cancer patients to patients with other diagnoses, including Alzheimer’s disease or other dementia, neurological disorders, chronic obstructive pulmonary disease (COPD), or debility. The average length of stay varies by diagnosis; cancer patients spent an average of 51 days in hospice care, while patients with neurological conditions had an average length of stay of 139 days. But much of the variation is related to the form of provider ownership. At not-for-profit  entities, patients spent an average of 69 days in hospice care in 2012, while patients of for-profit entities averaged 105 days. The difference in length of stay between for-profit and not-for-profit hospices varied more dramatically as stays grew longer. At the 50th percentile, for-profit hospice  patients had a length of stay of 21 days compared to 14 days at not-for-profits. At the 75th percentile, the average was 58 at not-for-profits and 97 days at for-profits; at the 90th percentile, patients spent 185 days in not-for-profit hospice care, but 306 days in the care of for-profit hospices.

In an interview on National Public Radio’s Marketplace on April 22, 2014, Fran Smith, co-author of Changing the Way We Die, said that hospice services now are a $17 billion industry. “People are making a lot of money on hospice services,” she said.She added that research shows that for-profit hospices tend to “cherry-pick,” enrolling the healthier patients who will have longer stays. The largest hospice chain in the country, Vitas, is owned by ChemEd, which also owns Roto-Rooter.

Marketing Efforts, Whistleblower Actions

Marketing of hospice services also appears to be a growth industry. Consultants now sell data analysis services to help hospices increase their referrals by “connecting patients to the physicians who treated them before they entered hospice care” so that the hospice can “target primary care physicians” who have many patients in hospice services. Some for-profit hospice providers have settled whistleblower actions by former employees who were directed to keep the patient population up by selling the services, even to people who were not terminally ill.

In 2012, Odyssey Healthcare, Inc.  settled a whistleblower action for $25 million, according to the Milwaukee Journal Sentinel. The specific allegations remained under seal, but Odyssey settled similar suit brought by another Wisconsin employee for $12.5 million in 2006, the newspaper reported. In May 2013, the U.S. Justice Department joined in a whistleblower action and brought another action independently against Vitas, alleging that Vitas enrolled patients in hospice who were not terminally ill, billed for more intensive services than actually were provided, and compensated employees based on the number of patients admitted and the length of their stays. The government also alleged that Vitas took adverse employment action against employees who failed to meet admission goals.

Hospice of the Comforter, Inc., an Orlando, Florida hospice company, agreed to pay $3 million to the Department of Justice and entered into a corporate integrity agreement. The government’s complaint alleged that it knowingly admitted patients who were not terminally ill and directed employees to falsify medical records to make the patients appear eligible for hospice care.  In March 2014, the parent company of Hospice Compassus, which formerly operated in Alabama, agreed to pay $3.92 million to the government as part of a settlement agreement to resolve allegations that it presented claims for services furnished to patients who were not eligible for hospice services. And on April 23, 2014, Amedisys, Inc. and its affiliates, who provide home health and hospice services, agreed to pay $150 million to the federal government to resolve seven actions under the False Claims Act. Amerisys was alleged to have provided and billed for medically unnecessary services for which patients did not qualify and to have entered into improper financial relationships with physicians and an oncology practice.

Patient Satisfaction

Still, Fran Smith says that hospice services are usually very successful; patients and their surviving families are usually very satisfied with the services they receive.  Often, the social worker will ask patients to consider what they want to do with their remaining time. Some patients use the time in hospice care to fulfill unmet goals or do things, such as travel, that they had always planned to do “some day.” She also  noted that many people choose hospice services too late to derive the full benefit of the service and regret that they did not choose to start earlier.