How Hospice Fraud Became a Legislative Focus in New York

By Chris Haring

Legislators are proposing a ban on for-profit hospices, protecting patients from unethical practices and ensuring patient-centered end-of-life care.

At Death with Dignity, we have long supported the hospice model for caring for people at the end of their lives. Among all the subspecialties in medicine, hospice has stood out as patient-centered, collaborative, and focused on quality of life. It’s no surprise that 90% of those who qualify for medical aid in dying are also enrolled in hospice.

However, we’ve recently seen a troubling trend where new for-profit entities have entered the hospice market with more predatory tendencies. A new FBI report detailed by Susan Arbetter for State of Politics warned about fraudulent activities in Texas, Arizona, Nevada, and California where patients are enrolled in hospice care without their knowledge, exploiting vulnerable populations, including non-English speakers and individuals of lesser financial means.

Due to the lucrative nature of Medicare reimbursements, these for-profit hospices have increasingly attracted private equity investors. Their profit-driven models often prioritize financial gains over patient care, leading to unethical practices such as enrolling non-terminal patients and reducing the quality of care.

Mitigating the threat of for-profit hospices

In Arbetter’s piece, Jeanne Chirico, President and CEO of the Hospice & Palliative Care Association of NYS (HPCANYS), emphasized the need for more robust legislative measures: “This is a bill that has been passed before by the Legislature but was vetoed by the governor. The veto memo asked that the issue be addressed in the Master Plan for Aging, which it was.”

Now, advocates are urging New York lawmakers to pass a bill (A6032/S6460), sponsored by state Sen. Liz Krueger (District 28) and Assemblymember Amy Paulin (District 88), prohibiting the establishment of new for-profit hospices. (Assm. Paulin is also a chief sponsor of the New York Medical Aid in Dying Act (A995C).)

As President and CEO of Mountain Valley Hospice & Palliative Care, Kara Travis noted, “It’s a vulnerable population, and across the country, it’s been a very easy target. It’s a way for for-profits to make money.”

The growing need for reform in hospice care

Initially founded on compassionate care principles, the hospice movement has significantly shifted towards a for-profit model since its incorporation into Medicare in 1982. A 2022 ProPublica investigation, Endgame: How the Visionary Hospice Movement Became a For-Profit Hustle, revealed how some hospices exploit vulnerable patients for financial gain.

As a result, the Justice Department’s Antitrust Division, Federal Trade Commission, and Department of Health and Human Services have launched a cross-government public inquiry into private equity’s control over healthcare.

Meanwhile, Center for Economic and Policy Research experts argue for a “three-prong approach” to hospice policy reform:

Strengthening existing regulations.
Updating policies to account for private equity.
Developing new policies to close loopholes that enable fraud.

They say these actions will help direct Medicare payments toward providing high-quality care for patients and their families.

Protecting patients and families from hospice fraud

Patients and their families must be vigilant and informed to avoid falling victim to hospice fraud. It’s crucial to recognize the signs of hospice fraud, such as unauthorized enrollments, aggressive marketing tactics, and discrepancies in billed and provided care levels. ProPublica’s article, How to Research Your Hospice (and Avoid Hospice Fraud), offers practical guidance on evaluating hospice providers and identifying potential fraud.

Hospice providers’ top priority should always be dignity and comfort for those at the end of life, not shareholder profit. It’s crucial to inform and educate consumers about legislative measures like New York’s proposed bill. This will not only help protect the integrity of the practice but also reassure them that the focus will always remain on compassionate, patient-centered care.

Learn more about how to access hospice care and reduce your risk of fraud on the Hospice Foundation of America’s website.