For-Profit Hospices Get New Scrutiny As Costs Grow
Are for-profit companies driving up the cost of Medicares hospice benefit?
After a decade in which most new hospices were started by corporations, are now for-profits. Concurrently, Medicares hospice costs have increased from $2.9 billion in 2000 to $12 billion in 2009, making it one of the fastest growing segments of the government health care program for the elderly.
The increase isnt only because more people are using hospice. Its also because patients are staying in hospice longer before dying. And those long-stay patients are than nonprofits, studies show.
As and the explain Tuesday, theres a financial incentive for longer stays. Medicares method of paying hospices a flat fee for each day in hospice encourages them to seek out patients early on and try to keep them as long as possible. Thats because the big costs for hospice care are at the beginningwhen a patient is evaluated and a plan of care establishedand the end, when they need the most intensive attention.
M. Tavy Deming, who represented a whistleblower in a case against Trinity Hospice, a now-defunct Texas-based chain, says some hospices have tried to keep patients even if they no longer met Medicares criteria. The system is ripe for abuse the way its set up, she says.
In April, Medicare started making it harder for hospices to keep patients beyond six months. Hospices must send a doctor or nurse practitioner to check out the patient in person and attest they still meet Medicares criteria for terminal illness.
Jim Barger, a Birmingham, Ala., attorney who brought a whistleblower case against the national for-profit hospice company SouthernCare, says even if the new rule clamps down on hospices keeping patients too long, it doesnt stop them from enrolling patients too early.
The case isnt clear cut. Many are highly regarded, and some nonprofits have long-stay patients as well. And for reasons of both marketing and circumstance, many for-profits have tended to have lots of patients with diseases such as Alzheimers whose course is hard to predict.
Dr. Diane Meier, a geriatrics professor at the Mt. Sinai School of Medicine and director of the nonprofit Center to Advance Palliative Care, both in New York City, says theres not much point in regulators giving for-profits special scrutiny.
Its very difficult to go after providers based on their tax status, she says. Everyone acknowledges there are bad actors in the system. In order to address the bad actors, who are not the majority, we subject everyone to the same rules.
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