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3 Types of Hospice Fraud You Must Know

If you work in the hospice care industry, it is vital to be aware of what can be considered hospice fraud. Hospice fraud is a broad term, so it is essential to have an understanding of how it can be defined so you can defend against a hospice fraud accusation.

Hospice fraud can be classified into a few different categories. These categories include billing fraud, improper care/abuse and kickbacks. Here are the types of hospice fraud you should know and why you should ensure they are not present at your hospice.

Billing Fraud

Businessperson's Hand Analyzing Bill

Billing fraud is often what comes to mind first when someone hears the phrase “hospice fraud.” This type of hospice fraud often arises in the form of a False Claims Act lawsuit. The False Claims Act is a whistleblower law used to combat anyone who defrauds government healthcare programs.

Most hospice fraud cases involve false claims to Medicare or Medicaid, and the False Claims Act can be used to recover damages. The False Claims Act empowers whistleblowers–who can be a hospice employee, family member of a patient, or any other person involved with a hospice program–to report the fraud. Additionally, there is a provision of the act that entitles the whistleblower to part of the funds recovered by the government. This provision further incentivizes individuals to report billing fraud.

False Claims Act lawsuits are extremely costly for hospices, with some settlements approaching $100 million. Here are some examples of billing fraud that can lead to a hospice fraud lawsuit.

  • A hospice may ask a patient or their family to pay out of pocket for services that are being reimbursed by Medicare, Medicaid, or a private insurance company. The fraudulent billing to the patient or family may proceed undetected. If the patient or family becomes aware of what a hospice is billing to Medicare, Medicaid, or a private insurance company, they may realize billing fraud is being committed.
  • A hospice may order medication or tools to treat a client, even though they are not required or helpful. Specific examples of this include purchasing a hospital bed for a patient who already has a bed and purchasing medication to “cure” a patient’s illness that cannot be cured. These expenses are then fraudulently billed to Medicare.
  • After moving an existing patient into a hospice facility and changing the level of care for that patient, a hospice may still bill Medicare, Medicaid, or a private insurance company for a more costly level of care, such as Continuous Care.
  • In order to enroll a patient in hospice care covered by Medicare, the patient’s doctor must certify that the individual has six months or less to live. Additionally, if a patient’s condition improves significantly, and their life expectancy improves beyond six months, the hospice is required to discharge them from hospice care. If a hospice is billing for hospice care but does not have the appropriate doctor’s certification, or if they fail to report significant changes in the patient’s health, they can be charged with hospice fraud.

Improper Care/Abuse

Medical worker mistreating senior woman in nursing home

A study conducted by the Office of Inspector General (OIG) found that nearly 80% of hospices that provided care to Medicare beneficiaries were found to have at least one deficiency. Deficiencies in care can be used to support an allegation of fraud against your hospice company. Here are some examples of improper care that should be avoided by hospices.

  • Hospices are paid per-diem, meaning they receive a fixed amount of money per patient signed on, for each day the patient is enrolled. The dollar amount is set without regard to the quantity of services they provide to a patient, which financially rewards a hospice that skimps on services and enrolls more patients.
  • During a crisis, like COVID-19, a hospice might decline to provide continuous nursing in the patient’s home. The hospice may tell the patient and their family that the hospice doesn’t have enough staff to provide proper care in the patient’s home, even if this is not true. This may result in the patient being manipulated to receive care in the hospice facility, where the hospice will collect room and board fees, which would not ordinarily be received.
  • A hospice may reduce the frequency of visits to a patient’s home, giving the patient a lower level of care than what is required. This may include substituting phone check-ins for on-site visits with the patient.
  • A hospice may choose to order inadequate amounts of medication to treat a patient in order to save money, despite being obligated to ensure the patient receives the medications needed to reduce pain and maintain a reasonable level of comfort.
  • A hospice may have Licensed Practical Nurses (LPN’s) performing tasks that they do not have the qualifications to perform. Registered Nurses (RN’s) may be required to perform certain tasks, and the hospice may choose to have these tasks performed by LPN’s or Home Health Aides without an RN’s supervision.


Bribery people with dollar bills in hand and quiet gesture

A hospice may make arrangements with outside sources for referrals. If the arrangement includes the hospice offering an incentive to the source in exchange for referring patients to the hospice, this is defined as a kickback. Kickback schemes can prove to be costly for hospices and their partners in the scheme. Here are some examples of hospice kickbacks that can lead to a fraud accusation.

  • A hospice may give free supplies or cash payments to a nursing home in exchange for the nursing home referring patients to the hospice.
  • A hospice may provide free nursing services to a nursing home, despite the nursing home already receiving Medicare payments for those services. This is done in exchange for the nursing home contacting the hospice company when hospice services are required later on.
  • A hospice may pay a physician to refer patients to the hospice.

If you work in the hospice industry, it is vital to be informed about all aspects of hospice fraud. For more information on hospice fraud, read the full guide on hospice fraud, including how to deal with a hospice fraud accusation and the penalties for losing a hospice fraud case. If your hospice has been accused of fraud, contact us to discuss your case and learn how we can help.

Read the In-Depth Guide to Hospice Fraud Banner