Report Finds Medicare Hospice Program Beset With Quality, Care Issues

A report from the Office of Inspector General (OIG) at HHS synthesized 10 years of research about the Medicare Hospice Program and found deficiencies in patient care, inappropriate billing, and even fraud. Patients went without pain medicine, hospices did not always provide the right level of care or provided poor quality care, billed for unnecessary care, enrolled people who were not eligible for care, or billed for services that were never provided.

A report from the Office of Inspector General (OIG) at HHS synthesized 10 years of research into the Medicare Hospice Program and found deficiencies in patient care, inappropriate billing and even fraud.

Patients went without pain medicine, hospices did not always provide the right level of care or provided poor quality care, billed for unnecessary care, enrolled people who were not eligible for care, or billed for services that were never provided.

This is not OIG’s first report into issues with how Medicare handles hospice, but it takes on new urgency as the aging of America is expected to accelerate.

Indeed, Medicare paid $16.7 billion for hospice care in 2016. In 2006, it paid $9.2 million. Meanwhile, the number of Americans ages 65 and older is projected to more than double from 46 million today to over 98 million by 2060, rising from 15% of the total population to nearly 24%.

The OIG report made 15 specific recommendations for improvement and presented them to CMS, which agreed with 6 of the recommendations but did not agree with 9. CMS neither agreed nor disagreed with 1 of the recommendations.

As spending on hospice has grown, so has the growth in the number of hospice programs, with 4374 programs in 2016, compared with 3062 in 2006. The number of beneficiaries has grown from 930,000 to 1.4 million in 2016.

Hospice care is delivered in 4 different ways and is paid for by the day: routine home care, general inpatient care, continuous home care, and inpatient respite care. Each level has its own pay rate, and hospices can provide services directly or under any arrangement.

Some of the issues uncovered in the report were familiar to the Center for Medicare Advocacy, a nonpartisan, nonprofit law organization that advocates for people who need help accessing Medicare and related healthcare services.

"We hope that CMS will take seriously the OIG report’s findings, which are in line with what we hear from Medicare beneficiaries and their loved ones about their experiences with hospice. We hear concerning stories about large for-profit hospice agencies minimizing services and rejecting or discharging patients who have more complex care needs," said Wey-Wey Kwok, senior attorney, in a statement emailed to The American Journal of Managed Care® (AJMC®). "It is crucial that CMS strengthen its oversight of hospices, meaningfully address poor performance, and determine how to better tie hospice payment to beneficiary care needs and quality of care."

The issues discussed in the report include:


The OIG report said some schemes involved paying recruiters to target beneficiaries who are not eligible for hospice care, while in other cases physicians falsely certified beneficiaries. This type of fraud could have a devastating health impact on patients—by enrolling in hospice when they shouldn’t, some patients may unwittingly be giving up on care that could benefit them, since the Medicare hospice benefit does not pay for curative treatments.

Inadequate services provided in care plans

Hospices provided fewer services than spelled out in care plans—that they themselves write— in 31% of claims for beneficiaries residing in facilities. And they did not provide adequate nursing, physician, or medical social services in 9% of general inpatient stays in 2012.

In 85% of general inpatient care stays in 2012, care plans were never developed — this appears to be worse than an earlier OIG report, which found that 63% of claims for all levels of care provided in nursing facilities did not meet care plan requirements.

"We have found problems with care planning throughout our work," said Deputy Regional Inspector General Nancy Harrison, one of the OIG authors of the report, in an interview with AJMC®.

"One of the things that is so troubling is that the hospices are writing their own care plans," she noted. "They do set their own bar, and they don't meet them."

When needed, hospices must provide all levels of care, but the report found that hundreds of hospices provided only the most basic level of services to all of the beneficiaries in their care. Three of out of 4 beneficiaries never saw a hospice physician.

"Hundreds and hundreds of hospitals only provide 1 level of care," said Harrison. That is usually in-home care; if more intensive care is needed, they are supposed to arrange for it. That raises questions as to whether or not beneficiaries have access to the services they need, she said.

Inappropriate billing

Reviews of individual hospices have found improper payments ranging from $447,000 to $1.2 million—for reasons ranging from inappropriate billing for levels of care, a lack of certifications of terminal illness, or lack of clinical documentation.

Hospices have also billed for expensive levels of care that OIG said was not needed. In 2012, hospices billed one-third of general inpatient care stays inappropriately, costing Medicare $268 million.

The report also said hospices were more likely to bill inappropriately for general inpatient care provided in skilled nursing facilities (SNFs) than general inpatient care provided in other settings.

Forty-eight percent of general inpatient care stays in SNFs were inappropriate, compared to 30% in other settings.

In another interesting finding, the OIG said for-profit hospices were more likely than other hospices to bill inappropriately for this level of care. For-profit hospices billed 41% of their general inpatient care stays inappropriately.

In comparison, other hospices, including nonprofit and government-owned hospices, billed 27% of their general inpatient care stays inappropriately.

The report also found that Medicare sometimes paid for drugs through Part D for hospice beneficiaries when payment should have been covered by the daily payment to the hospice, so in effect, Medicare was paying twice. OIG found that Part D and beneficiaries paid more than $30 million in 2009 for drugs in certain categories that potentially should have been covered under the daily hospice rate.

Kwok, the Medicare attorney, elaborated on some of the calls her organization has received—for instance, she said last week a patient was rejected from a for-profit hospice because they required prescription medication that the hospice did not want to be responsible for covering. "It shouldn't be the case that someone very close to the end of life cannot get care," she said.

Misaligned financial incentives

The Medicare hospice payment system may cause hospices to seek out certain types of beneficiaries over others, the report said, because payment is made based on time spent in care, not on services provided. Hospices may seek patients who are likely to have long lengths of stay or fewer complex needs.

Despite the fact that payments do not vary by weekday versus weekend, weekend care for pain management and symptom control drops off significantly, raising questions as to whether or not beneficiaries are being appropriately cared for.

And Harrison said the example of someone being rebuffed from a hospice because of the cost of their prescription medication as part of their terminal illness is a result of the current payment system.

Lack of transparency

At a time when families and caregivers are at their most vulnerable—picking out palliative, end-of-life care for a loved one—CMS’ Hospice Compare website does not provide enough information about hospice quality in order to make an informed decision, the report said. Hospice Compare does not include “critical” quality information about individual hospices nor information about complaints filed against hospices.

Hospices themselves provide incomplete or inaccurate information, the report said, usually by leaving out required text about the type of insurance benefit the beneficiary was choosing to receive. In 35% of general inpatient care stays, there was missing information on hospice election statements, which tells beneficiaries what they are receiving but also what they are giving up. Usually, these statements neglected to specify that the beneficiary was electing the Medicare hospice benefit as opposed to Medicaid hospice or private insurance; all of these programs have different specifications.

"There's little information to beneficiaries and caregivers when they make the choice of hospice," said OIG Regional Inspector General Jodi Nudelman. Compared to CMS' other website, Nursing Home Compare, the information is not as robust.


OIG made 15 recommendations in an effort to fix a number of areas cited in its report. Some of them include:

  • CMS should seek statutory authority in order to have what the OIG called “intermediate remedies” to address care concerns.
  • CMS needs to do a better job of using data to both analyze claims and use deficiencies to drive the survey process, and also use this information to improve the Hospice Compare website. It should also use data to reduce inappropriate billing.
  • CMS should also seek the authority to change its payment methodology to ensure that beneficiary needs and care quality are met.

CMS agreed with less than half of the recommendations, but some of the steps it did agree to take are:

  • To develop other claims information and include it on Hospice Compare
  • To work with partners to make information available about the hospice benefit
  • To strengthen oversight of hospices, using 4 of the 5 OIG recommendations made in this area.

Specifically, CMS said it will increase oversight of inpatient care claims; follow up with hospices that engage in actions or have characteristics that raise concern; and implement a prepayment review strategy so that patients do not go without pain medicine.

“Ensuring patient safety and access to quality care at hospice and all certified care facilities is paramount to CMS’ work. The agency takes the oversight role of the Medicare hospice program seriously and is aggressively focused on reducing and eliminating fraud, waste, and abuse. CMS has already taken action to address OIG’s concerns in this area and will continue efforts to strengthen the oversight of hospices and the overarching mission of serving patients with Medicare,” CMS said in a statement.

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