Is the $14 Billion Hospice Industry Bilking Medicare for Millions?

The hospice industry is booming with a $14 billion revenue, but with Medicare footing 90% of bill, the eligibility of many of the patients is being brought into question, reports a Bloomberg article.

The number of Medicare-covered patients in hospice care more than doubled between 2000 and 2009, and it seems many are staying in hospice longer than would be expected.

Medicare compensates on a per-diem basis, and lengthier stays increase profitability, according to federal data.


There’s been a 60% increase in the average time patients spend in hospice since 2000, when for-profit hospice care gained in popularity, the article says, citing Medpac data. Additionally, the average stay of the 10% of patients who remained in hospice the longest rose 71% to 240 days.

“That means at least 110,000 patients weren’t facing imminent death when they were admitted—although doctors said they were,” says Bloomberg. “To qualify for Medicare hospice coverage, patients must have a prognosis of six months of less to live, certified by two doctors.”

There are several settled or pending lawsuits against hospice companies regarding admitting patients who didn’t qualify for end-of-life care, with prosecutors saying one company “bilked” Medicare by paying bonuses to employees and doctors to admit patients who weren’t dying, according to the article.


With a base of 1.1 million patients enrolled in Medicare and 1,800 for-profit providers, hospice has been largely fueled by nursing homes, thanks in part to compensation based on enrollment numbers and nursing home doctors who double as hospice medical directors.

Even if patients didn’t actually qualify for hospice care, which by definition is for the terminally ill, hospice marketers have been encouraged to “admit, admit, admit,” according to Joyce White, a former marketer for Vitas Healthcare, a Chemed Corp. unit that is the nation’s largest hospice chain, Bloomberg reports.

White, the former Vitas employee, alleges that salespeople were paid based on patients’ length of stay due to Medicare’s compensation system, says Bloomberg; a Vitas spokesperson says the company compensates its marketing representatives based on overall growth, not length of stay.

Read the full Bloomberg article here.

Written by Alyssa Gerace