Medicare Hospice Fraud - How to Spot it and How to Stop It

Hospice - dignity-focused, palliative care for the dying - has unquestionably improved the plight of countless patients who might otherwise have died in isolation, fear, and pain. An absolute entitlement under the Medicare program, however, it has also heavily-lined the pockets of venturers and has become a breeding ground for Medicare fraud. When most people think of hospice, they think: volunteers, soft-spoken nurses and ministers. The majority of twenty-first century hospice care in this country, however, is controlled by big-business interests.

Obviously, profit in and of itself is not a bad thing - it is the foundation of our economy. But when massive profits are made with taxpayers picking up the lion's share of the bill, the eyebrows raise. And when those massive profits are made through Medicare reimbursements for people who aren't dying and don't qualify for the medicare cost report , then that is the definition of fraud. And when that fraud causes unsuspecting patients and families to forgo much-needed curative treatment that could improve or save their lives, then the people behind the fraud have to be stopped. Period.

Without admitting fraud, some major hospice companies have ponied-up large settlement dollars to quell allegations that their business models include admitting and readmitting non-terminal hospice patients and falsely billing Medicare and Medicaid. In 2006, mammoth national hospice provider, Odyssey Hospice, paid $12.9 million and kept doing business as usual. In 2009, national hospice provider SouthernCare paid nearly $25 million as a result of a qui tam lawsuit filed and litigated by the author of this article. But paying such high settlement dollars seemed to only prove the heavy profit to be found in healthcare for the dying. The Odyssey and SouthernCare settlements seemed to be nothing more than a blip on the radar of the for-profit hospice machines. Odyssey's census and profit margins inexplicably grew rather than shrunk after they agreed to purge and stop admitting non-terminal patients.

According to reports filed by the company, Odyssey's average daily census grew by over 100 patients the year after the settlement and by nearly 4,000 after two years. Likewise Odyssey admissions grew by over 200 the first year and by over 14,000 by the second year. Their net patient revenue jumped by almost ten million the same year that they settled with the government - the initial year rise in revenue almost paying for the cost of the settlement. By year two under the Corporate Integrity Agreement, Odyssey increased its net patient revenue by more than $230 million. Last year - year five of the corporate integrity agreement - Odyssey grew its net patient revenue to $686 million, up $300 million after its settlement with the government of fraud allegations. The lesson: hospice is big business.

Unfortunately, where there are hefty profits to be made, people who will game the system can also often be found. One of the most common places to spot Medicare hospice fraud is in nursing homes. According to a recent report of the Department of Health and Human Services Office of Inspector General, 82% of hospice claims for beneficiaries in nursing facilities did not meet at least one Medicare coverage requirement and 33% of claims did not meet election requirements. A whopping 66% of claims did not meet plan of care requirements - a particularly disturbing statistic indicating problems with patient care. Almost a third of all Medicare hospice claims were for fewer services than required by the plan of care.

Know more: medicare cost reporting

Medicare Fraud Effects and Medigap Participants

With the nation's attention focused on the current healthcare debate, many U.S. citizens are growing increasingly concerned over the promise of an increase in healthcare bills over the coming year and decades. Medicare participants, especially, stand to see a significant increase in the cost of their healthcare, according to some experts, especially supporters of the Republican party.

In the face of these expected fee increases, the Florida Department of Health and Human Services has just announced a shocking case of Medicare fraud in Miami-Dade County, Florida. According to a report released by the Department of Health and Human Services Office of Inspector General, Miami-Dade County received about half a billion dollars for Medicare in-home health care payments in 2008. This amounts to a payment of more than the entire nation combined.

Despite the huge amount of claims from Miami-Dade County, the county only accounts for slightly more than half of the nation's claims. Moreover, only 2 percent of patients who receive home health care live in the county. The Medicare fraud is not only blatantly obvious, but it is costly for everyone; Medicare fraud amounts to more than $3 billion each year because of false claims.

Medicare fraud comes in many forms. In some cases, healthcare agencies have billed the Medicare program for home health services that they claim were rendered for homeless people. IAccording to an article published Monday by the Associated Press, "a large percentage of the patients are diabetics who claim they are blind and bill medicare cost report for a day and night nurse to give them insulin shots." However, upon further investigation, the beneficiaries are not actually blind.

"What we're finding in a lot of the cases is the patients don't even have diabetes and certainly aren't blind," said Kirk Ogrosky, who heads the Medicare Fraud Strike Force across the United States for the Department of Justice. The report indicates that Medicare payments for home healthcare for diabetics in Miami are eight times the national average.

Medicare beneficiaries who participate in the Medicare scams may stand to benefit financially for their services. According to the AP article, patients are paid between $700 and $1,400 for their participation. Eight suspects in Miami were charged with getting $22 million from the system through fraud.

What does this fraud mean for Medicare beneficiaries across the country? Ultimately, it means that the Medicare system pays out a significant amount of money from shared coffers for fraudulent claims, reducing the available money for real claims. As Medicare funds are stretched thin, Medicare payments to providers are ultimately reduced and Medicare fees for beneficiaries are ultimately increased.

Know more: medicare cost reporting

Medicare Supplement Insurance

The CMS or Centers for Medicare & Medicaid Services makes Medicare Information available on quality of service and cost of healthcare. The new rules proposed by the CMS make it easier to select high-quality and low-cost health care services from physicians, hospitals and other health care providers.

Under the new rules, organizations meeting certain qualifications will be given permission to access patient-protected Medicare data to produce public reports about the health care services of clinics, doctors and hospitals. These reports will combine Medicare and Medigap Insurance claims data with private sector claims data to point out which healthcare providers give the most cost-effective and highest-quality services. This strategy is a part of the Affordable Care Act aimed at improving health care, making people pro-active about their health, and driving down health care costs.

According to the CMS Administrator, Donald Berwick, MD, making this information available to the public will empower them to make smart decisions about their health care. He hopes that the performance reports will increase higher-quality and cost-effective health care for millions of consumers. Making the healthcare system more transparent, promotes healthy competition between insurance companies and medicare cost report providers and that could drive down premiums.

How Will Transparency Change Health Care?

Over the years, employers and consumers have been frustrated with the limited availability of health care claims data. Many health plans use provider performance data solely based on the health plan’s own claims, which may only represent a small portion of a provider’s overall performance. Making health care claims more transparent, can broaden consumer understanding about the performance of doctors and other providers. Imagine being able to pick your surgeon based on survival and recovery rates after his past surgeries.
Transparency can be just as important when it comes to Medicare Advantage Plans and Medigap Insurance. Did you know that Medigap Plans are standardized by law to offer pre-set benefits? The same cannot be said about Advantage Plans, though, you’ll have to scrutinize benefits, such as which medications each plan covers.

Can Transparency Help You Make The Most Of Medicare?

To be sure you have the coverage you’ll need requires deciphering Medicare’s benefits and comparing that to your regular doctor and hospital bills. Then, look for one of several Medicare Advantage Plans or Medigap Plans that can pick up any left-over medical expenses. Once you’ve decided what additional coverage you’ll need and which plan can best fill in Medicare’s gaps, you’ll need to research how prices compare for that plan.

There’s still little transparency when it comes to how Medicare Supplement Plans are priced. Research reveals that certain people unfortunately pay hundreds of dollars more than others for the exact same benefits. To compare prices, check out rates from multiple insurance companies or use an online website to help you compare rates from different insurers by running quotes on multiple plans with a single quote request. This is a free service and the quotes are accurate. It’s a quick way to narrow down the selection of various plans.