California Hospice Network: State Falls Short in Curbing Potential Malfeasance

The continued licensing of new hospices in California despite a moratorium is “deeply disturbing and frustrating,” the California Hospice Network (CHN) indicated in a statement.

The practice is undermining efforts to combat hospice fraud, which has been rampant in California according to media and state government investigations. In 2021, the state enacted two hospice reform laws — Senate Bill 664 and Assembly Bill 1280 — designed to strengthen oversight, including a moratorium on new licenses and an extensive audit of California’s licensing and oversight processes.

However, a Jan. 25 ProPublica investigation found that new hospices in California are still receiving Medicare certifications, though the numbers may be few.

“This is yet another in a string of deeply disturbing and frustrating accounts of the state of end-of-life care in the Golden State,” CHN CEO Michael Milward said in a statement. “CHN is disappointed that one hand does not seem to know what the other is doing both locally and nationally as more fly by night hospices have continued to be certified by CMS despite pervasive instances of fraud, waste, and abuse impacting patients in need and well-meaning providers.”

The continued entry of “poor-quality or fraudulent providers” runs counter to regulatory actions imposed by the state government and the U.S. Centers for Medicare & Medicaid Services (CMS), according to the CHN statement.

Investigations have shown that potentially hundreds of newly licensed hospices have bilked Medicare of millions of dollars during the past several years, all while providing egregiously poor care or none at all. Some of these providers engaged in referral kickback schemes, enrolled patients who were not eligible for hospice and lied to them about being terminally ill.

In some instances, multiple hospices have been operating out of the same address without a corresponding increase in the population of eligible patients. Some individuals also hold management positions at several of these hospices simultaneously.

Numerous reports of these unethical or illegal practices have emerged since 2021, with the majority centered in four states: California, Texas, Nevada and Arizona.

Thus far, California is the only state to take action on the issue, but the ProPublica investigation and CHN’s statement suggest that these efforts may be falling short.

“We appreciate that none of this is easy, however, end-of-life patients and their families in California are the ones at risk here,” Milward said. “We at CHN implore the relevant authorities to finally and fully crack down on bad actors in hospice while reminding providers and patients alike that, across the state, you can confidently choose high quality, compassionate end-of-life care from your local community owned, not-for-profit hospice who has been serving your community for over 40 years. We look forward to continued collaboration with our state and national partners to address these issues.”

CHN is a regional hospice collaborative with three members — Hospice of the Foothills, Hospice of Santa Cruz County and YoloCares. Though each member remains a distinct, independent organization, the partnership enables the hospices to collaborate on best practices and improve efficiency through cost sharing and shared services.

Combined, the network’s member hospices serve more than 2,200 patients and families each year across 11 counties with a workforce of nearly 300 employees.

Among the organization’s goals of the collaboration is to reduce overhead costs, improve the members’ bargaining position with payers and health plans and smooth the transition into value-based payment models, such as Medicare Advantage.