Rein in hospices that game the system

We used to know what hospice meant: palliative care for a patient with less than six months to live.

While that’s still often the case, especially among nonprofit hospice providers, increasingly it isn’t. In recent years, for-profit companies have gotten into hospice in a big way and figured something out: They could make a lot of Medicaid money by signing up people who were sickly but not dying, then dumping them when they reached their Medicaid limit.

A recent Washington Post study found that in the decade between 2002 and 2012, the percentage of patients discharged alive from hospice increased about 50 percent; profit per patient quintupled to almost $2,000. Of the hospice industry’s $17 billion annual revenue, $15 billion came from Medicaid.

It’s easy to see why many hospice companies focus on signing up non-terminal patients: They get $150 a day per patient for routine care from Medicaid even if no nurse or other worker visits the patient that day. So healthier patients who don’t need as much help — and won’t die anytime soon — are more profitable than patients hospice was initially designed for: the truly terminal.

One revealing comparison illustrates the difference between nonprofit and for-profit hospices: The average patient is served by nonprofits for 69 days, while the average for-profit serves a patient for 102 days.

Although two doctors are supposed to initially certify that a patient has less than six months to live, he or she must be periodically reapproved to continue receiving hospice care. Those reapprovals are usually done by physicians employed by the hospice.

That’s a recipe for Medicaid abuse, as are allegations that some of the for-profit providers employ hard-sell tactics to sign up patients and pay bonuses to staff based on the number enrolled. One former manager said there was pressure to “sign everybody up.”

Hospice has been a precious service for many in their final weeks, providing help and medical care at home in a less expensive and more patient-friendly way than in a hospital. But Medicaid payments to for-profit providers need closer scrutiny and reform to weed out the bad actors.

One way to rein in costs would be to have re-approvals for hospice care performed by doctors not associated with a provider. And paying per diems only on days when services are provided could decrease the incentive to sign up patients who may be treated as cash cows.