Hospice firms draining billions from Medicare

© Bob Miller/For The Washington Post

Washington Post

Chocolate Blount, 91, was discharged from hospice care in Monroeville, Alabama after his health improved.

Hospice patients are expected to die: The treatment focuses on providing comfort to the terminally ill, not finding a cure. To enroll a patient, two doctors certify a life expectancy of six months or less.

But over the past decade, the number of "hospice survivors" in the United States has risen dramatically, in part because hospice companies earn more by recruiting patients who aren't actually dying, a Washington Post investigation has found. Healthier patients are more profitable because they require fewer visits and stay enrolled longer.

The proportion of patients who were discharged alive from hospice care rose about 50 percent between 2002 and 2012, according to a Post analysis of more than 1 million hospice patients' records over 11 years in California, a state that makes public detailed descriptions and that, by virtue of its size, offers a portrait of the industry.

The average length of a stay in hospice care also jumped substantially over that time, in California and nationally, according to the analysis. Profit per patient quintupled, to $1,975, California records show.

This vast growth took place as the hospice "movement," once led by religious and community organizations, was evolving into a $17 billion industry dominated by for-profit companies. Much of that is paid for by the U.S. government - roughly $15 billion of industry revenue came from Medicare last year.

© Washington Post

Profits up in California - The average profit per patient has grown steadily. The combination of more patients and far greater profit per patient has pushed overall inflation-adjusted profit up more than tenfold.

At AseraCare, for example, one of the nation's largest for-profit chains, hospice patients kept on living. About 78 percent of patients who enrolled at the Mobile, Ala., branch left the hospice's care alive, according to company figures. As many as 59 percent of patients left the AseraCare branch in nearby Foley, Ala., alive. And at the one in Monroeville, 48 percent were discharged from the hospice alive.

"It was definitely good news," said Bessie Blount, whose father received hospice care from the Monroeville outfit and left after about a year, she said.

About three years later, her father, Chocolate Blount, 91, is still alive.

"He has good days and bad days," she said.

Incentive to recruit patients

The work that the hospice nurses, aides and counselors do, often in the most trying circumstances, is demanding, emotionally and physically. It typically allows patients to die at home or in other familiar surroundings - and for families of the dying, the comfort it offers can provide enormous relief.

But the survival rates at AseraCare are emblematic of a problem facing Medicare, which has created a financial incentive for hospice companies to find patients well before death.

Medicare pays a hospice about $150 a day per patient for routine care, regardless of whether the company sends a nurse or any other worker out on that day. That means healthier patients, who generally need less help and live longer, yield more profits.

The trend toward longer stays on hospice care may be costing Medicare billions of dollars a year.

In 2011, nearly 60 percent of Medicare's hospice expenditure of $13.8 billion went toward patients who stay on hospice care longer than six months, MedPAC, the Medicare watchdog group created by Congress, has reported.

Some of those patients simply outlived a legitimate prognosis of six months.

But much of the data suggests that the trend toward longer stays is a response to the financial incentive.

Consider the difference between the nonprofit and for-profit hospices: While the average nonprofit serves a patient for 69 days, the average for-profit hospice serves a patient for an average of 102 days, according to MedPAC.

Moreover, multiple allegations have arisen from former hospice workers who say that the businesses took in people who weren't in declining health. Four of the 10 largest hospice companies in the United States, including Asera­Care, have been sued by whistleblowers alleging that patients were receiving care they didn't need. The Justice Department has joined several of these lawsuits, including the one against Asera­Care and Vitas, the nation's largest hospice provider.

Jim Barger, a lawyer in Birmingham, Ala., who has filed several of the suits, said the root of the problem is that a company profits when it admits patients who aren't dying, and it is the hospice itself that helps determine whether a patient is dying. While two doctors certify a patient for hospice care initially, the patient must periodically be re­approved for hospice care. The reapprovals typically are done by hospice physicians.

"Honestly, it makes me ill," Barger said. Because of the lawsuits, "defense firms make money and my firm has made money. I'd like nothing better at this point than for my job to become obsolete."

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Causes - The profitability was driven by having patients stay in hospice longer. While the average stay for cancer patients has remained about the same, the average stay for non-cancer patients went from under six weeks to 11 weeks, a Post analysis found. Patients who stay longer yield more money for hospice operators.

"It must be strange to be told you're dying and then not die."

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