California hospice scams put seniors at risk

from Ana B. IbarraCalMatters

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California has become the epicenter of a major hospice fraud crisis that is costing taxpayers hundreds of millions of dollars and putting vulnerable seniors at risk.

But years after the state acknowledged the problem, key regulatory decisions remain stalled as state and federal officials blame each other.

Palliative care, an end-of-life service usually reserved for people with a life expectancy of less than six months, has become a target for fraudsters looking to steal public funds, with devastating consequences for affected patients. Moreover, they have become a recurring theme in government investigations and in the media.

Last week, Sheila Clark, director of the California Hospice and Palliative Care Association, was moved as she told congressmen the story of a Southern California woman who suffered a spectacular fall in the middle of the night while going to the bathroom in 2020. The woman, a Medicare beneficiary, was unable to see and needed cataract surgery. However, planning for the surgery hit a snag: At the time, Clark said, the woman’s records showed she had been enrolled in a hospice program, apparently fraudulently. Unable to recover from her injuries, the woman died two months later. “This shouldn’t have happened,” Clark said.

That case and others have refocused attention on an issue that activists say has never gone away and is rekindling a partisan dispute. At the congressional hearing, some Republicans blamed California and Gov. Gavin Newsom for failing to control the situation, while some Democrats accused the Trump administration of not doing enough and to pardon the impostors.

The Newsom administration says it hasn’t stood idly by. Just this month, California Attorney General Rob Bonta announced indictments against 21 suspects who allegedly defrauded the state of $267 million in a major hospice fraud ring. Since 2021, the prosecutor’s office has filed 119 criminal cases related to hospices. The U.S. Attorney’s Office also announced recent arrests in California.

The California Department of Health also revoked 280 hospice licenses in the past two years and is reviewing another 300, officials said. Meanwhile, state regulations aimed at limiting who can get a hospice license were supposed to be approved months ago.

Medicare and Medi-Cal beneficiaries are caught in the middle of delays and political maneuvering. Californians who truly need hospice are at risk if they enroll in a fraudulent hospice that may provide inadequate or no care, while others enroll in hospice services even though they are not terminally ill and are denied access to the care they need. “People are losing access to health care, to drugs, to their doctor, to elective surgery,” Clark said. “It’s disheartening.”

Stricter rules for hospices are still to come

In 2022, State Auditor of California found that “weak state controls have created an opportunity for large-scale fraud and abuse.” Among other red flags, auditors noted a concentration of hospices in individual buildings, particularly in Los Angeles County, and high rates of living patients being discharged from hospices.

The audit revealed that Los Angeles County has seen a 1,500 percent increase in the number of hospice agencies in a decade, along with indicators of large-scale billing fraud and evidence that thieves have stolen the identities of medical staff to obtain licenses.

That same year, the state imposed a moratorium on new hospice licenses, which expires the following year. Meanwhile, enforcement of emergency hospice regulations designed to limit access to such licenses was delayed again. The state Department of Public Health says it is reviewing the draft emergency regulations based on input from industry representatives and consumer groups.

“Once these regulations go into effect, they will include stricter standards for who can own or operate a hospice, the number of nurses per patient, restrictions on operators trying to oversee multiple agencies at once, minimum staffing requirements and more thorough vetting of potential licensees before a license is approved,” department spokesman Mark Smith said.

Licensing is just the first step: The federal government’s Centers for Medicaid and Medicare Services must certify operators before they can start billing. Clark and Isidro say better fraud prevention will require greater transparency and better data sharing between state and federal governments.

Fraud can occur in several ways

Psychotherapist Lynn Ianni still doesn’t know how the scammers got hold of her information. Two summers ago, she was completing her final physical therapy for a shoulder injury when Medicare denied her claim: Records showed she was enrolled in a hospice program.

Yanni, who also testified at last week’s hearing, suggested it was a technical error: He was injured playing pickleball but had led a healthy and active life. Medicare referred her to hospice in Arcadia, where she was supposedly enrolled. The address was in a shopping mall; I had never heard of the doctor. He spent hours on the phone, for months, trying to figure out the problem. Medicare refused to cover her shoulder care even though she was paying her premiums.

“I was without coverage or services for over six months,” Yanni said. “I was really terrified because I didn’t know how to fix it and I didn’t see any solution.”

Fraud can take many forms. It can include providers who knowingly overcharge Medicare and Medi-Cal or file false claims, but it can also include complex cases where unscrupulous people create shell agencies, steal medical information and bill for services they never provide or that are not medically necessary.

These scams go beyond palliative care. The U.S. Centers for Medicare and Medicaid Services and the Office of Inspector General have also expressed concern about home health care fraud, skin substitutes Mr durable medical equipment, such as wheelchairs, walkers or oxygen tanks. Federal authorities on Tuesday accused a Pasadena clinic of improperly billing Medicare more than $34 million for skin grafts and wound healing services it did not provide.

Scammers have many tricks. They make robocalls or approach people at grocery stores, after church or door-to-door, offering free gift cards, food or health care in exchange for forms asking for personal and medical information.

“They don’t realize their Medicare number has been stolen, and all of a sudden they’re put in hospice,” said Katerina Isidro, director of the California Senior Medicare Patrol, a group that helps people report and stand up to Medicare fraud.

According to Isidro, health workers have also filed complaints of irregularities, reporting that their colleagues shared patient information with fraudsters in exchange for bribes. This type of fraud is more difficult to prevent because medical professionals are assumed to be trustworthy people.

Clark explained that scammers steal Medicare IDs from the dark web and then sell them to hospices or home health agencies. “They literally call themselves middlemen,” Clark said. “‘Here are 10 payee numbers. How much will you pay me monthly for what I can charge?’

Protecting your medical information is essential.

Families who really need hospice care shouldn’t hesitate to apply for it for fear of being scammed, said Molly Gurian, vice president of government affairs at Leading Age, an organization that represents senior service providers. People can use the quality ratings and phone directory on the website Medicare Care Comparison to start looking for legitimate hospice providers. Legitimate providers must be able to take calls and answer questions about their services, Gurian added.

“(Palliative care) is a huge benefit and the fact that it has been used to perpetrate fraud in this way is very disturbing.”

For everyone else, advocates recommend protecting Medicare and Medicaid ID numbers like your Social Security number: never share them over the phone or in exchange for free benefits. It’s also important to read your Medicare summaries and explanation of benefits documents to make sure everything is correct.

“It is extremely important that older adults, Medicare beneficiaries, their caregivers or their family members, whoever is caring for them, be very vigilant,” Isidro said.

Those who suspect fraud should call the helpline Senior Medical Patrol your state, a federally funded hotline that can help people opt out of services they didn’t apply for, often within a day or two.

This hotline helped adjust Ianni’s Medicare account and reactivate his benefits. Six months after learning she had been fraudulently enrolled in hospice, Yanni receives a new Medicare card in the mail, with no explanation of what happened. Just in time, he says: two weeks later, he broke his finger. “I felt a great relief.”

This program is supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the health care they need, when they need it, and at an affordable cost. Visit www.chcf.org for more information.

This article was originally published on CalMatters and was republished under license Creative Commons Attribution/Attribution-Noncommercial.