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Bloomberg Exposes Medicare Hospice Fraud “Boom”

December 13, 2011

Bloomberg investigative reporter, Peter Waldman, recently exposed what many medical professionals have known for some time: hospice is a huge business fueled by Medicare and Medicaid billing fraud. In a December 5 story entitled “Aunt Midge Not Dying in Hospice Reveals $14B Market” that has rapidly made its way around the Internet, Waldman reports:

“Hospice care, once chiefly a charitable cause, 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.”

The Bloomberg story chronicles the plight of Janet Stubbs, who “didn’t know that her aunt, Doris Midge Appling, was admitted to Hospice Care of Kansas during the company’s “Summer Sizzle” promotion drive, which paid employees as much as $100 a head for referrals.” For many who have experienced hospice as it was intended — palliative and comfort care for near-death patients and their families — it is shocking to learn that hospice care is promoted like the sale of used cars or mattresses.

But where there are endless amounts of taxpayer dollars for the taking, there will be those who line up with hands outstretched like crazed shoppers at a Black Friday sale. And it’s the patients and their families who suffer, because medical judgment gets thrown out the window in the frenzy of such “Summer Sizzle” hospice sales events:

“It doesn’t seem right,” Stubbs told Waldmen. “What incentive did the doctor have to put my aunt on hospice? How much was she being paid?”

Bloomberg’s investigation reports that the incentives for false certification of terminal illness are apparently huge:

“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.”

The “boom” to which Waldman refers is an industry where death has become a commodity to be bought and sold on the open market. One former hospice chaplain told Waldman that doctors were paid “$3,000 or $4,000 a month from a hospice to work one day a week” and that the natural result was for doctors to refer their patients to the hospice company. “They wanted us to admit, admit, admit,” Waldman reports that a former marketer for Vitas Healthcare, said. “All of us competed against each other to make our numbers. You lived or died by your numbers.” Vitas Healthcare operates the hospice brand of Chemed Corporation, whose other division is RotoRooter, the septic cleaning service chain.  A salesperson for another large corporation apparently told Waldman, “There was always pressure to get the patient census up, any way we could, to sell the company.”  Yet another hospice worker told Waldman that her supervisors instructed her: “Put everyone on hospice, don’t ask questions and build!…“They were there to make a buck.”

Most people would be shocked at the idea of marketing and salespeople in hospice, but in many of the big businesses, marketing and sales make-up a large part of their employee force.  And the leadership and equity investment behind such sales efforts comes from the ethically-challenged culture of Wall Street.  According to Waldman:

“Publicly traded companies like Chemed and Gentiva Health Services Inc. (GTIV) have created hospice chains through serial takeovers in the last decade. Hospice buyouts and investments by private-equity firms have also led to boosted enrollments.

Funding from Kohlberg Kravis Roberts & Co. enabled closely- held Harden’s acquisition of Hospice Care of Kansas’s parent last year. The seller: private-equity investor Apax Partners, ofLondon and New York.”

In addition to the “Summer Sizzle” event, Waldman discovered numerous other hospice sales blitz events around the country such as “Christmas Cash Blitz” and “Fall Frenzy” hospice admission drives at various companies. When care for the dying is described with words like “sizzle” and “cash blitz” and “frenzy”, it should be abundantly clear that the system is out of control.

UPDATE MAY 4, 2013: DoJ FILES SUIT AGAINST VITAS HOSPICE ANS CHEMED FOR ALLEGED MEDICARE FRAUD

To report hospice fraud or other Medicare fraud, contact Frohsin & Barger.

7 Comments
  1. Rick Pridgett permalink

    The greed of a few has tarnished the purpose of hospice. People who are coping with a terminal illness should be given compassion and care. But, the ones who are ripping off the taxpayers to fill their pockets and buy new cars and houses should be punished and made to pay restitution. Greed is the root of all evil as is well seen in the hospice fraud being uncovered. Hospice should not be in the hands of for profits. Stock holders and corporate executives are looking for profits and growth. To make money off of the dieing is unacceptable in any form or shape. Take corporations out of the picture. Don’t allow for profits to be involved. How much more money does the taxpayer have to hand over to the greedy before things will change?

  2. Shawn Lane permalink

    I agree with Rick’s comments. How sad that hospice is being used to make profits and to steal from taxpayers.

  3. A double tragedy combining fraud in a skilled nursing facility and hospice can be found at http://www.defraudingamerica.com/glenda.html.

  4. thefixer permalink

    Several issues have arrisen in which it leads me to believe CHE-NYSE cannot survive this round of bad press. The medicare fraud allegations turned into a securities fraud class action. The CEO is personaly a defendent. Chemed’s other big boy Roto rooters operations are being challenged in Federal court in a national class action http://www.getmanlaw.com that threatens if proven to completely change RR’s business model. RR will have to contend with millions of previously avoided overhead and also make good with its employees to the tune of (last time we checked they were asking for 10 million) in Massachusetts a whistleblower case alleges consumer fraud and worker exploitation and in MN a class action for a truth in repair case has arisen alleging aggressive sales tactics led consumers to do un-needed sewer rapair/replacements. Both of these case have potential to cross state lines. This compan yis headed to the shitter..pardon the pun

  5. Deb Alexander permalink

    My mother died a victim of this particular fraud. Mother repeatedly said she had “no” pain yet hospice nurse started her on low dose of morphine (contraindicated for patients w/respiratory issues), 5 mg. yet, over less than a weekend (36 hours) they increased it to an overdose. I amazingly was able to get a copy of the Dr.’s script for morphine that states: Give .1 to .2 (“point one . . . “) mL, 2 to 4 mg. every two hours. Minutes later Hospice nurse gave mother full two ml, 40mg. killing mother over a period of 3 hours.

    I have all the documents that prove this “killing” in Florida where hospice personnel seem to forget they must abide by the Federal Government’s “hospice regulations”.

Trackbacks & Pingbacks

  1. Hospice Self-Reports False Claims Act Violations, Repays $10M+ « FraudBlawg
  2. Hospice Pays $6.1 Million for Allegedly Enrolling Non-Terminal Patients « FraudBlawg

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