FBI Warns Consumers About Hospice Fraud Risks

The FBI has issued a public warning about hospice fraud in the Houston area.

The law enforcement agency’s alert comes as program integrity concerns continue in four states, including Texas, Arizona, Nevada and Texas. The agency has received numerous complaints about fraudulent activity among hospices in Houston, according to local news.

“It’s a little bit more egregious and distasteful than some of the other Medicare frauds we typically deal with,” FBI Supervisory Special Agent Shannon Brady said in the local news report. “We’ve had a huge increase in complaints.”

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Specifically, the FBI is alerting consumers to a scam in which patients are enrolled in hospice without their knowledge. Many of these patients are not truly hospice-eligible. The scam also involves “recruiters” who call patients in order to “sell” them hospice care.

Investigations have shown that potentially hundreds of newly licensed hospices in the four affected states 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.

During 2023, 96 new hospices emerged in Texas, according to the U.S. Centers for Medicare & Medicaid Services (CMS). 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.

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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.

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