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Nursing Homes & Hospices: Potential Partners in Crime

August 29, 2011

When most people think of hospice care, they think of a person in the very last stages of life going home to die in peace and reflection with the comfort of family and friends around them — as the benefit was originally intended. The reality is that many hospice patients spend difficult and agonizing years “dying” in institutional nursing homes under the profit-driven watch of dispassionate corporations.

Inspector General Warnings About Fraudulent Nursing Homes & Hospices
The Office of Inspector General of the Department of Health & Human Services (HHS-OIG) recognizes and warns that the intersection of nursing home and hospice care raises serious concern for fraud and elder abuse. According to a report by HHS-OIG, a number of “potentially illegal practices” have been identified in “a hospice’s access to nursing home patients,” including circumstances where “nursing home operators or hospices may request or offer illegal inducements to influence the selection of a hospice.”

Hospice Care in Nursing Homes: the Double-Billing Conundrum
While it may seem counterintuitive that federally and state-funded healthcare would pay a for-profit corporation simultaneously to provide nursing home care and hospice care — that is exactly what happens in many cases. For duel-eligible (Medicaid and Medicare) patients who are certified as terminally ill with less than six months to live, corporations are permitted to bill the taxpayers twice: first for 95% or more of the cost of staying in a nursing home and second for a flat daily rate for hospice care — even on days where no hospice nurse visits the patient.  The patients  targeted by such an arrangement comprise the nation’s most disenfranchised and most vulnerable citizens: the elderly poor, the category of patients who qualify for both Medicare and Medicaid.  The potential for profiteering upon such vulnerable patients is exacerbated when the nursing home and hospice are owned by the same company — one company potentially can multiply its payments by billing Medicare and Medicaid for both nursing care and hospice care without supplying any additional services or absorbing any additional costs, all on the taxpayer’s dime and to the patient’s potential detriment.

Potential Patient Harm
It may seem beneficial to the patient to potentially get additional services while in the nursing home — but this is not always the case. If the patient is receiving adequate nursing care in the facility, then hospice care may be superfluous and even potentially dangerous. Because hospice patients must agree to forego any curative treatment, patients who are not truly terminal whom the corporation wrongly certifies as hospice-eligible may not get the important medications, treatments, therapy, and nutrition that they need — even though the taxpayers are being billed twice for the patient’s care. Many hospices even consider dietary supplements like Ensure to be curative treatment and will withhold them from their patients. (It’s no coincidence, though,  that such dietary supplements are also expensive and cut into the corporation’s bottom line). Conceivably, if a nursing home patient is inappropriately admitted to hospice, then the otherwise non-terminal  patient could slowly starve to death while the company withholds dietary supplements and bills Medicare and Medicaid twice for the patient’s care.

Kickbacks in Nursing Homes & Hospices
The profit motive for nursing homes and hospices to treat a patient as terminal rather than curative is obvious — it is also potentially criminal. Congress has made most quid pro quo arrangements between nursing homes and hospices and other cross-referring corporations a crime, and the reasons and policy served by outlawing such conduct has been expounded upon by HHS-OIG:

Because kickbacks can distort medical decision-making, result in overutilization, and have an adverse effect on the quality of care patients receive, they are prohibited under the Federal health care programs. Under the anti-kickback statute it is illegal to knowingly and willfully solicit, receive, offer, or pay anything of value to induce referrals of items or services payable by a Federal health care program.

Among the most troubling instances of potential kickbacks between hospice and nursing homes to influence the referral of patients observed by HHS-OIG are:

    • hospices offering nursing homes remuneration for referrals in the form of: (a) free goods and services or below market value goods and services to the nursing home or (b) payments to the nursing home for “room and board” or other additional services above the normal Medicaid coverage;
    • hospices referring patients to nursing homes in exchange for the nursing homes referring other patients to hospice;
    • hospices providing free or below fair market care to skilled nursing facilities with the understanding that the patient will be referred to hospice after the skilled nursing benefit expires;
    • hospices offering free or below fair market nursing and support staff to nursing homes

How to Protect Against Potential Fraud or Abuse By Nursing Homes and Hospice Corporations
Before agreeing to submit to hospice care in a nursing home or to subject a loved one to hospice care in a nursing home, proper assurances should be requested from both the hospice and nursing home provider that none of the above scenarios exist and that no other potentially improper relationship exists between the nursing home and the hospice. If the hospice refuses to provide its service in the home and insists on a nursing home setting, patients and their loved ones should consider an alternate provider. Red flags should raise over any hospice and nursing home that are owned or controlled by the same corporate entity.  Ask about the corporate structure: if it seems complicated or complex or difficult to determine or if there is an obvious quid pro quo among the providers, then consider alternatives. Ideally, hospice should permit the patient to spend the last days among loved ones in the nurture of the home; while this is not always an option depending upon the patient’s condition and home environment, it should never be the case that a patient or their loved one is forced to make a decision without knowing all of the facts. 

If you have knowledge of  an improper relationship between a hospice provider and a nursing home, then you should seek the counsel of an attorney.  You may have rights and remedies as a whistleblower under the federal or applicable state false claims act, which mandates that corporations submitting false claims for payment to Medicare or Medicaid repay three times the amount of the false claim plus penalties, attorneys’ fees, and interest — including a reward of a percentage of the recovery to the whistleblower depending upon the extent of his or her involvement in prosecuting the case.

To report Nursing Home and/or Hospice fraud and abuse, contact Frohsin & Barger.

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