Congress Grills HHS on Hospice Program Integrity

Members of Congress are raising questions about the continued Medicare certification for new hospices in areas rife with fraud.

U.S. Health and Human Services (HHS) Secretary Xavier Becerra fielded questions in a House Ways & Means committee hearing on Capitol Hill on Wednesday. Rep. Michelle Steel (R-Calif.) and Rep. Beth Van Duyne (R-Texas) fired questions at the secretary about an apparent lack of progress on curbing certifications for bad actors.

Though he pledged more detailed responses at a later date, Becerra told lawmakers that CMS is certifying hospices in markets where there is a need identified in the community.

“I can make sure that we give you a more complete answer than what I can give you right now. But what I will tell you is that there are programs in place where if the applicants go through the process and certify to CMS that they have a program that will service the needs of a community when it comes to hospice care — and they are able to meet the standards — that we will certify them to be able to provide hospice care,” Becerra said. “That then some of them go out and do things that are against the law or do things fraudulently, there’s no doubt that’s one of the reasons why under Medicare or Medicaid we are constantly trying to root out that fraud.”

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.

During the hearing, Van Duyne displayed a photo of a building in which more than 100 Medicare-certified hospices were operating.

“Do you recognize this building? It’s in the Van Nuys neighborhood in Los Angeles. CMS is the sole authority in certifying hospice facilities, yet there are over 100 unique hospice providers registered at this location alone,” Van Duyne said. ”It’s frightening that that has been allowed to happen. And Mr. Secretary, as you’re aware, I raised this issue with you a year ago at our last budget hearing, and somehow here we are, again, dealing with the same problems.”

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.

A large contingent of these companies were established with the purpose of selling the license at a profit, with little concern for patient care. In some instances, multiple hospices have been operating out of the same address without a corresponding increase in the population of eligible patients.

Many of these hospices were also setting up shop, providing substandard care to a few patients and then selling off the license before regulators caught wind of it. This prompted the U.S. Centers for Medicare & Medicaid Services (CMS) to propose a rule that would prohibit hospices from selling licenses or transitioning ownership for at least 36 months following initial Medicare certification.

Medicare claims data shows that 128 new enrolled hospices entered California in 2023. Arizona also saw a rise of 27 new hospices during the last year, with Texas and Nevada seeing 96 and 33 new providers, respectively.

Overall, about 69% of all newly licensed hospices in 2023 were located in Arizona, California, Nevada and Texas. No other state had more than 15 new hospices enrolled, with most having single-digit enrollment, according to the data.

Between 2010 and 2024, the number of hospices in those four states has grown exponentially, according to data shared with Hospice News on background. While not every new hospice is necessarily engaging in fraud, generally, indications of malfeasance have run high among such providers.

New Hospice Growth 2010-2024

State	2010 (No. of hospices)	2024 (No. of hospices)
Arizona	72	212
California	281	2,162
Nevada	27	114
Texas	343	271

In addition to new regulations and updated survey processes, CMS has been conducting unannounced onsite visits. To date, CMS personnel have appeared at 7,000 locations, with plans to visit every hospice site in the country, the agency reported.

Two CMS officials outlined the effort in a blog post emailed to Hospice News — Dara Corrigan, CMS deputy administrator and director of the Center for Program Integrity, and Dr. Dora Hughes, acting director of the agency’s Center for Clinical Standards and Quality (CCSQ) and acting CMS chief medical officer.

In January 2023, a coalition of four industry organizations made 34 recommendations to CMS and Congress for strengthening hospice oversight. These included the National Association for Home Care & Hospice (NAHC), the National Hospice and Palliative Care Organization (NHPCO), LeadingAge, and the National Partnership for Healthcare and Hospice Innovation (NPHI).

Though some of these have been implemented, CMS has stopped short of imposing a targeted moratorium on hospice licensing in counties where spikes in new providers “exceed the level appropriate to ensure access, quality and choice.”

Becerra indicated that CMS was continuing its work to strengthen oversight of hospices and other providers in the continuum.

“I will tell you, just as we were in our discussion about hospice care, or nursing home care, home health care, which is a growing industry as well, this is something that we’re trying to monitor more closely,” Becerra said. “We are constantly doing program integrity work in this field as well.”