Authorized in 1982, the Medicare hospice benefit has grown steadily and, with that growth, has attracted ever-increasing fraud and abuse scrutiny and enforcement.  Now more than half of individuals who die while covered by Medicare use the benefit before death.[1]  From 2003 to 2011, the number of Medicare beneficiaries receiving hospice care has risen from 729,000[2] to 1.2 million individuals[3].  Over the same period, Medicare payments for hospice care more than doubled, climbing from $5.9[4] to $13.7 billion[5]. 

As Medicare expenditures for hospice care continue to soar, the federal government has assumed an increasingly active role in combating perceived problems of hospice fraud.  The Department of Health & Human Services Office of Inspector General and the Department of Justice contend that many hospice providers have pursued a variety of illicit schemes to improperly obtain hospice benefit payments.  False Claims Act lawsuits alleging hospice fraud are increasing both in frequency and amount in controversy, resulting in recent settlements of up to $25 million.  This trend shows no sign of slowing.  This past May the Department of Justice grabbed headlines when it intervened in a whistleblower lawsuit against VITAS, the largest for-profit hospice chain in the country. 

Relators’ counsel have taken notice of recent legal developments and a simple internet search for “hospice whistleblowers” now turns up numerous websites actively recruiting hospice employees for potential whistleblower suits.  A press release from Corporate Whistleblower Center, for example, encourages hospice employees to contact them directly “for information about possible reward programs” and warns against engaging their employers regarding perceived fraud, advising that “any suggestion of exposure might result in instant job termination . . . .”.[6]

Penalties for erroneous hospice claims are severe, including treble damages and civil penalties between $5,500 and $11,000 for each False Claims Act violation.  To avoid the risk of costly litigation and crippling fines, hospice providers should carefully monitor their compliance with Medicare requirements.  This article provides an overview of Medicare conditions of participation, major risk areas for noncompliance, and recent legal actions involving hospice providers to help guide decision-makers in crafting effective compliance programs.

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[1] David G. Stevenson, Growing Pains for the Medicare Hospice Benefit, 367 New Eng. J. Med. 1863 (Nov. 1, 2012).

[2] OIG, Memorandum Report: Questionable Billing for Physician Services for Hospice Beneficiaries, OEI-02-06-00224 (Sept. 22, 2010).

[3] OIG, Memorandum Report: Medicare Hospice: Use of General Inpatient Care, OEI-02-10-00490, p. 2 (May 3, 2013).

[4] Medicare Payment Advisory Committee, Report to the Congress: New Approaches in Medicare, p. 140 (June 2004).

[5] OIG, Memorandum Report: Medicare Hospice: Use of General Inpatient Care, OEI-02-10-00490, p. 2 (May 3, 2013).

[6] “The Corporate Whistleblower Center Urges All Hospice Insiders with Proof of Medicare Billing Fraud to Contact Them Immediately for Compensation Info,” (last visited on Dec. 4, 2103).


Source: American Health Lawyers Association, Health Lawyers Weekly