California hospice scams put seniors at risk

from Ana B. IbarraCalMatters

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California has become the epicenter of a massive 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 fixes remain in limbo as state and federal officials trade blame.

Hospice care, an end-of-life service usually reserved for people with less than six months to live, has become a target for fraudsters looking to steal taxpayer dollars — with devastating consequences for patients caught in the middle. It has also become rich fodder for government and media investigations.

Last week, Sheila Clark, who heads the California Hospice and Palliative Care Association, became emotional as she told congressional leaders the story of a Southern California woman who suffered a devastating fall in the middle of the night on her way to the bathroom in 2020. The woman, a Medicare recipient, could not see; he needed cataract surgery. But scheduling that surgery ran into a snag: At the time, Clark said, the woman’s records showed she was enrolled in hospice care — deceptively at first glance. Unable to recover from her injuries in the fall, the woman died two months later. “This shouldn’t have happened,” Clark said.

That case and others have refocused attention on an issue that advocates say never went away — and is once again sparking a partisan battle. At the congressional hearing, some Republicans blamed California and Gov. Gavin Newsom for failing to address it, while some Democrats accused the Trump administration of not doing enough and pardoning the cheaters.

The Newsom administration claims it was not idle. 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 office has filed 119 hospice-related criminal cases. The U.S. Attorney’s Office also announced separate recent arrests in California.

The California Department of Health also revoked 280 hospice licenses in the past two years and is reviewing another 300, according to officials. Meanwhile, state regulations designed to limit who can get a hospice license should have been issued months ago.

Medicare and Medi-Cal beneficiaries are stuck in the middle of delays and political madness. Californians who truly need end-of-life services may be at risk if they enroll with a bogus hospice operator that may provide inadequate care or none at all, while others are enrolled in hospice services even though they are not dying and are excluded from the services they need. “People are losing access to care, they’re losing access to medication, to their (doctor), to elective surgery,” Clark said. “It’s disheartening.”

More stringent hospice rules 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 clustering of hospices in separate buildings, particularly in Los Angeles County, and high rates of living patients being discharged from hospices.

The audit found that Los Angeles County has seen a 1,500 percent increase in 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, set to expire next year. Meanwhile, emergency hospice regulations designed to tighten who can get a hospice license are back delayed. The state Department of Public Health says it is revising the draft emergency regulations based on feedback from industry representatives and consumer groups.

“Once these regulations are in place, they will include stricter standards for who can own or operate a hospice, nurse-to-patient ratios, restrictions on operators trying to oversee multiple agencies at once, minimum staffing requirements and more thorough vetting of potential licensees before a license can be approved,” said Mark Smith, a department spokesman.

Licensing is just the first step—the federal Centers for Medicaid and Medicare Services must certify operators before they can begin billing. Clark and Isidro say better fraud prevention will require more transparency and better data sharing between the state and federal governments.

Fraud can happen in many ways

Psychotherapist Lynn Ianni still doesn’t know how 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 hospice.

Jani, who also testified at last week’s hearing, suggested it was a technical error — she had injured herself playing pickleball but had led an active, healthy life. Medicare referred her to hospice in Arcadia, where she was supposed to be enrolled. The address was in a shopping mall; she had never heard of the doctor. She spent hours on the phone, for months, trying to figure out the problem. Medicare refused to cover her shoulder care even when she paid her premiums.

“I had no coverage or services for over six months,” Yanni said. “I was really terrified because I couldn’t figure out how to solve it and I couldn’t see a solution.”

Fraud can take many forms. They can be providers who knowingly overcharge Medicare and Medi-Cal or file false claims, but they can also be complex cases where bad actors create fake agencies, steal medical information, and bill for services they never provide or that aren’t medically necessary.

These scams run through hospice 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 substitutesand durable medical equipment such as wheelchairs and walkers or oxygen tanks. Just Tuesday, the feds charged a Pasadena clinic with improperly billing Medicare more than $34 million for skin grafts and wound care 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 gift cards, food or free health care in exchange for forms that ask for personal and medical information.

“They don’t realize their Medicare number has been stolen and the next thing you know, they’re in hospice,” said Katerina Isidro, director of the California Senior Medicare Patrol, a group that helps people report and deal with Medicare fraud.

Health workers have also fielded complaints from whistleblowers reporting colleagues sharing patient information with scammers in exchange for kickbacks, Isidro said. It is more difficult to protect yourself from this type of fraud because medical providers are assumed to be trustworthy people.

Clark said scammers have made a business out of stealing Medicare IDs from the dark web and then selling them to hospices or home health agencies. “They literally call themselves brokers,” Clark said. “‘Here are 10 beneficiary numbers. How much will you give me each month that you can charge?’

Protecting your medical information is key

Families who truly need hospice care should not be deterred from seeking the benefit by fear of fraud, said Molly Gurian, vice president of government affairs at Leading Age, a group that represents providers of aging services. People can use Medicare Care Comparison quality site and phone directory results to start looking for legitimate hospice providers. Legitimate providers should pick up the phone and be able to answer questions about their services, Gurian said.

“(The hospice) is a great benefit and the fact that it has been used to commit fraud in this way is very concerning.”

For everyone else, advocates advise keeping Medicare and Medicaid ID numbers the same as your Social Security number—never sharing the number over the phone or in exchange for freebies. People should also read the Medicare summary notes and explanation of benefits documents to make sure everything looks accurate.

“It’s really critical that older adults, Medicare beneficiaries, their caregivers or their family members, whoever is taking care of them, be very vigilant,” Isidro said.

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

This hotline helped clear Ianni’s Medicare account and restarted her benefits. Six months after she first learned she was fraudulently enrolled in hospice, Yanni received a new Medicare card in the mail with no explanation of what had happened. Just in time, she said, too: two weeks later, she broke her finger. “I was so relieved.”

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a cost they can afford. Visit www.chcf.org to learn more.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.