Hospice fraud and abuse: Operation Restore Trust and beyond

Medicare-funded hospice is at a crossroad. It is estimated that in the year 2000, of the 2.4 million Americans who died, one in four used hospice. The demand for hospice services is projected to grow as the baby-boomer population continues to age and experiences the health issues that come with it. Yet evidence suggests the program is failing to fulfill its statutory purpose as a meaningful benefit to many, particularly those with noncancerous conditions. The causes for this include unwieldy eligibility criteria and the chilling effect of aggressive fraud enforcement. The unique nature and scope of hospice services available under Medicare, and their complex interrelationship with other Medicare benefits, all contribute to the errors and fraud graphically illustrated by government enforcement activities. Operation Restore Trust and similar enforcement activities may be restoring confidence that inappropriate expenditures are being wrung out of the hospice system. But at the same time, they are also creating distrust, particularly among those with noncancerous conditions, about whether they will receive the benefits for which they are eligible and to which they are entitled. In part, this is a consequence of the chilling effect (real or perceived) that aggressive enforcement is having on physicians and hospice medical directors who certify eligibility to the program. This paper reviews the Medicare hospice benefit, identifies the more significant fraud and abuse issues that hospice presents, examines the impact of Operation Restore Trust and other compliance activities on hospice, and makes final observations about the future.