OIG Issues Sweeping Report on Hospice Fraud and Care Quality Concerns

To counter claims of fraud and abuse in the hospice industry, federal regulators have loudly announced their plans to aggressively go after dishonest providers.

Those watchdogs include the U.S. Department of Health & Human Services’ Office of Inspector General (OIG), which released a sharp new report on fraud vulnerabilities within the Medicare hospice program on Tuesday. OIG regularly produces evaluations and audits of the hospice program, while also spearheading criminal and civil investigations that lead to convictions, monetary penalties and False Claims Act settlements.

OIG’s latest report synthesizes its growing body of work digging into the hospice industry and highlights several key vulnerabilities it will continue to monitor. The new report covers hospice care since 2005 and also describes increases in utilization and reimbursement.


More than 1.4 million beneficiaries received hospice care in 2016, with Medicare paying about $16.7 billion for the services provided. Hospice care serves terminally ill beneficiaries who decide to forgo curative treatment for palliative care instead.

Among its findings, OIG found in its report that, in each year from 2006 to 2016, about three-quarters of hospice beneficiaries did not have a visit with a hospice physician. While not required by Medicare, physician visits help hospice providers evaluate patients and manage their symptoms.

Additionally—even though hospices must care for patients as needed, regardless of time or day—hospices have largely provided fewer services on weekends, according to OIG. In 2012, for example, hospices provided only 4% of their hours on Saturdays and only 3% on Sundays. Hospices are paid for every day a beneficiary is under their care.


In general, hospices often fail to meet plan of care requirements, OIG also found.

“When beneficiaries elect hospice care, they are choosing to receive care that will not cure their illness, but should provide comfort and relief from pain,” OIG stated in its report. “All services related to their terminal illness become the hospice’s responsibility. Yet hospices do not always provide the care beneficiaries need to control pain and manage symptoms.”

Patient care isn’t the only thing that’s compromised by fraudulent behavior, according to OIG. Indeed, inappropriate billing by hospices has costs Medicare hundreds of millions of dollars, investigators have found.

Specifically, reviews of individual hospices have found improper payments ranging from $447,000 to $1.2 million for services not meeting Medicare requirements. In relevant cases, hospices billed for inappropriate levels of care, lacked required certifications of terminal illness or did not have sufficient clinical documentation.

In 2012, hospices billed one-third of general inpatient care stays inappropriately, costing Medicare about $268 million.

The current payment system “creates incentives for hospices to minimize their services and seek beneficiaries who have uncomplicated needs,” OIG stated.

OIG made more than a dozen recommendations to the Centers for Medicare & Medicaid Services (CMS) for improving the Medicare hospice program in its report.

They include strengthening the survey process, along with taking steps to tie payment to beneficiary care needs and quality of care. OIG also recommended to CMS that the agency take action to seek statutory authority to establish additional remedies for hospices with poor performances.

CMS agreed with fewer than half of OIG’s suggestions.

“CMS is committed to ensuring that the Medicare hospice program provides quality care safe from fraud, waste and abuse,” CMS Administrator Seema Verma stated in a letter to OIG.

The full OIG report is available here.

Written by Robert Holly

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