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posted: 1/5/2014 5:00 AM

Hospices seek non-terminal patients to boost bottom line

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  • Chocolate Blount, 91, seen Dec. 18 at home in Pine Hill, Ala., was discharged from hospice care about three years ago.

      Chocolate Blount, 91, seen Dec. 18 at home in Pine Hill, Ala., was discharged from hospice care about three years ago.
    The Washington Post

  • Twanda Blount helps her grandfather Chocolate Blount, 91, with his wheelchair outside their home on Dec. 18 in Pine Hill, Ala. Three years earlier, Chocolate Blount was discharged from hospice care after about a year.

      Twanda Blount helps her grandfather Chocolate Blount, 91, with his wheelchair outside their home on Dec. 18 in Pine Hill, Ala. Three years earlier, Chocolate Blount was discharged from hospice care after about a year.
    The Washington Post

By Peter Whoriskey and Dan Keating
The Washington Post

Hospice patients are expected to die: The treatment focuses on providing comfort to the terminally ill, not finding a cure. To enroll a patient, two doctors certify a life expectancy of six months or less.

But over the past decade, the number of "hospice survivors" in the United States has risen dramatically, in part because hospice companies earn more by recruiting patients who aren't actually dying, a Washington Post investigation has found. Healthier patients are more profitable because they require fewer visits and stay enrolled longer.

The proportion of patients who were discharged alive from hospice care rose about 50 percent between 2002 and 2012, according to a Washington Post analysis of more than 1 million hospice patients' records over 11 years in California, a state that makes public detailed descriptions and that, by virtue of its size, offers a portrait of the industry.

The average length of a stay in hospice care also jumped substantially over that time, in California and nationally, according to the analysis. Profit per patient quintupled, to $1,975, California records show.

This vast growth took place as the hospice "movement," once led by religious and community organizations, was evolving into a $17 billion industry dominated by for-profit companies. Much of that is paid for by the U.S. government -- roughly $15 billion of industry revenue came from Medicare last year.

At AseraCare, for example, one of the nation's largest for-profit chains, hospice patients kept on living. About 78 percent of patients who enrolled at the Mobile, Ala., branch left the hospice's care alive, according to company figures. As many as 59 percent of patients left the AseraCare branch in nearby Foley, Ala., alive. And at the one in Monroeville, 48 percent were discharged from the hospice alive.

"It was definitely good news," said Bessie Blount, whose father received hospice care from the Monroeville outfit and left after about a year, she said.

About three years later, her father, Chocolate Blount, 91, is still alive.

"He has good days and bad days," she said.

The work that the hospice nurses, aides and counselors do, often in the most trying circumstances, is demanding, emotionally and physically. It typically allows patients to die at home or in other familiar surroundings -- and for families of the dying, the comfort it offers can provide enormous relief.

But the survival rates at AseraCare are emblematic of a problem facing Medicare, which has created a financial incentive for hospice companies to find patients well before death.

Medicare pays a hospice about $150 a day per patient for routine care, regardless of whether the company sends a nurse or any other worker out on that day. That means healthier patients, who generally need less help and live longer, yield more profits.

The trend toward longer stays on hospice care may be costing Medicare billions of dollars a year.

In 2011, nearly 60 percent of Medicare's hospice expenditure of $13.8 billion went toward patients who stay on hospice care longer than six months, MedPAC, the Medicare watchdog group created by Congress, has reported.

Some of those patients simply outlived a legitimate prognosis of six months.

But much of the data suggests that the trend toward longer stays is a response to the financial incentive.

Consider the difference between the nonprofit and for-profit hospices: While the average nonprofit serves a patients for 69 days, the average for-profit hospice serves a patient for an average of 102 days, according to MedPAC.

Moreover, multiple allegations have arisen from former hospice workers who say that the businesses took in people who weren't in declining health. Four of the 10 largest hospice companies in the United States, including AseraCare, have been sued by whistle-blowers alleging that patients were receiving care they didn't need. The Justice Department has joined several of these lawsuits, including the one against AseraCare and Vitas, the nation's largest hospice provider.

Jim Barger, a Birmingham, Ala., lawyer who has filed several of the suits, said the root of the problem is that a company profits when it admits patients who aren't dying, and it is the hospice itself that helps determine whether a patient is dying. While two doctors certify a patient for hospice care initially, the patient must periodically be reapproved for hospice care. The reapprovals typically are done by hospice physicians.

"Honestly, it makes me ill," Barger said. Because of the lawsuits, "defense firms make money and my firm has made money. I'd like nothing better at this point than for my job to become obsolete."

"It must be strange to be told you're dying, and then not die."

For five years, Medicare's watchdog group has been recommending that the payments to hospice companies be revised to eliminate the financial incentive for improper care, but Medicare has not yet done so. To ensure that patients are appropriately selected for hospice care, Medicare relies on strict medical documentation requirements, a spokesman said.

The hospice industry is opposed to fundamental changes to the payment system. Jonathan Keyserling, senior vice president of health policy at the National Hospice and Palliative Care Organization, an industry group, said that the current payment system is sound and that tampering with it could have unintended consequences. He noted that two doctors certify a life expectancy of six months for hospice patients.

As for the whistle-blowers, Keyserling said that they, too, have financial incentives.

"I don't know what motivation might prompt a whistle-blower suit, but obviously there is a monetary reward -- the larger the program, the larger the reward," he said.

Keyserling and others in the industry attribute the rise in the number of hospice survivors to changing patient demographics, not fraud: A larger portion of patients today have diseases whose outcomes are harder to predict. That's because the portion of hospice patients suffering from cancer, a disease that has a more predictable course, has shrunk, they said.

But according to The Washington Post's analysis, the growth in the average duration of hospice care stems less from the decline in the proportion of cancer patients than from another trend. Patients suffering from a non-cancer ailment began staying longer in hospice: Their average stay in hospice care grew from six weeks to almost 11 weeks on average between 2002 and 2012.

While the lawsuits against the for-profit hospices vary in the details, as a whole they depict an industry in which companies compete for new patients and provide services to patients who are not eligible for them.

Hospice "outreach specialists" and "community education representatives" seek out patients in a variety of ways: They solicit doctors and hospitals who might regularly deal with the terminally ill; they make connections at nursing homes, assisted-living developments and Meals on Wheels groups. They show up at the "health fairs" held at senior centers with, for example, machines that test blood pressure. For families struggling to take care of a loved one, they offer the promise of extra help.

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