For-Profit Hospice Facilities More Likely to Overbill Medicare

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Recently, a woman was treated as an in-patient at a for-profit hospice facility for a total of 51 days. The problem? Her symptoms were already well-managed, and she only needed occasional help with eating and taking her medication. Researchers found that there was no need for her to receive around-the-clock medical care at a hospice facility rather than receiving home visits from a hospice professional. Medicare was charged about $30,000 for her seven-week stay.

This is just one of many cases that investigators from the U.S. Department of Health and Human Services have examined in recent years. In a recent study, the department found that some for-profit hospice facilities were billing Medicare almost four times as much as nonprofit hospices. Patients in for-profit facilities were also more likely than those in nonprofit facilities to receive unnecessary care.

HHS also alleges that some hospices are accepting patients who don’t have terminal illnesses simply to profit from their care. It also claims that some facilities are only accepting patients who require extensive medical care so they can bill Medicare more frequently. Additionally, for-profits are charging more for the same services as nonprofits, investigators claim.

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If these allegations are true, they could impact both patients and the Medicare system as a whole. Investigators worry that relatively healthy patients are receiving inappropriate care, such as powerful painkillers that doctors typically prescribe for patients who are close to death. These medicines could negatively impact the health of a patient who doesn’t need them. For example, they might have difficulty communicating their wishes to loved ones or hospice staff. Investigators claim that improper use of some medicines could also cause premature death.

What’s more, improper billing practices have the potential to drain money from the Medicare system — money that is needed for essential care.

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For-profit Hospice vs. Nonprofit

The primary difference between for-profit and nonprofit hospices is that nonprofits don’t pay taxes and cannot show a profit at the end of the fiscal year. They pay their employees and other essential bills, and then redistribute any additional money in various ways (such as donating to charities.) For-profits, on the other hand, can make as much money as they like. They simply need to pay taxes on it at the end of the year. As their names imply, for-profits are in business to make money for their owners and shareholders.

In the future, federal investigators will implement more rigorous inspection of for-profit hospice facilities’ billing practices in order to curb Medicare abuse. Hopefully, this will give all patients access to high-quality hospice care.