HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Sunday, November 20, 2011

Guest Blogger Kathy Cerminara: Angels of Mercy or Roto-Rooters? Regulatory Visions of Hospice Providers

Kathy CermineraAs I essentially argued in last week’s blog posting, and as I have argued here and here, our legal and regulatory structure should assist more patients in accessing hospice care.  One way to assist patients in doing so is by including it in the essential health benefits package; another way is by revising some of the preconditions to coverage of it under current rules.

Certain hospice care providers, however, have been attracting scrutiny because of concerns that they are engaging in fraud and abuse.  Indeed, within ACA, even as it approved certain relaxation of coverage rules, in part on a trial basis, Congress indicated suspicion of hospice care providers by tightening documentation requirements.  In doing so, it followed an earlier, similar step by HHS after years of regulatory concern.  Court files provide reason for suspicion as well.  Earlier this month, a federal court in Dallas unsealed the complaint in a whistleblower lawsuit against Vitas Healthcare’s San Antonio office alleging a conspiracy between Vitas and two HMOs to defraud Medicare.

One reason for increased scrutiny has been a huge increase in Medicare hospice care expenditures coupled with a sharp increase in the number of for-profit hospice care providers.  As I have noted previously:

Regulatory and legislative desire for increased accountability stems from a great increase in Medicare spending on hospice care over recent years.  . . . . Even if it is an economical form of care, it consumes a significant amount of resources. 

The increasing costs are due both to the growing number of Medicare beneficiaries electing hospice care and to the increased number of days hospice beneficiaries, on average, are receiving hospice care. Between the year 2000 and the year 2008, the percentage of Medicare decedents who had received hospice care rose from 23 to 40 percent. The provision of hospice care to Medicare beneficiaries increased at an average rate of 10 percent per year between 2000 and 2007 and still grew, but at the slower rate of 5.5 percent between 2007 and 2008. 

In roughly this same time period, the number of for-profit hospices in the marketplace for hospice services has increased significantly. Between 2001 and 2008, the total number of hospices in America increased by 47 percent, from 2,303 to 3,389. In that time period, the number of for-profit hospices increased by 128 percent, while the number of not-for-profit hospices increased by only one percent. In raw numbers, this translates into an increase of 983 in the number of for-profit hospices (from 765 to 1,748) compared to an increase of 13 in not-for-profit hospices (from 1,184 to 1,197).1

There may be any number of reasons for the increase in the number of hospice patients and the number of days those patients receive hospice care.  Some of those reasons would be good ones:  more patients may be recognizing the value of hospice services or receiving hospice care long enough to benefit from it than previously.  But the increase in for-profit hospice providers during the same time period has fueled concerns that the increases are due to fraud and abuse.  As Joshua Perry and Robert Stone argue, there’s something about for-profit ownership that encourages regulators, legislators, and, yes, even sometimes the public, to suspect the commercialization of hospice care.  Most “regular folks” with whom I have spoken, for example, have wrinkled their noses and expressed shock when learning that formerly not-for-profit Vitas now is part of the same for-profit corporate structure as Roto-Rooter.

It would be unfair to assert that all the increase in hospice funding is due to fraud, and even more unfair to assert that all fraud emanates in for-profit entities, even if Office of Inspector General investigations and whistleblower lawsuits support such conclusions.  Nevertheless, the combination of an increase in funds flowing toward hospice care providers and the upswing in for-profit entities becoming or acquiring such providers turns heads.

Hospice care in the best sense of the word – the provision of palliative care by a multi-disciplinary team who can act as “guides into death” for patients, families and caregivers – can greatly ease the dying process for all involved.  And, obviously, data, rather than assumptions, should govern our views of corporations providing hospice care.  Studies conflict regarding whether for-profit and not-for-profit healthcare institutions actually differ.  But, for now, expect those competing visions of hospice providers – angels of mercy or Roto-Rooters – to continue to clash in legislators’ and regulators’ minds.

1 Hospice and Health Care Reform: Improving Care at the End of Life, at pp. 25-26.

- Kathy Cerminara

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