Fraudulent hospices in California reportedly have been targeting homeless people and methadone patients, promising them a steady supply of opioids in exchange for enrolling in hospice.

Three hospice leaders came forward to Hospice News to report these practices. According to their reports, unscrupulous providers have canvassed both homeless encampments and methadone clinics seeking to sign up patients who are not terminally ill.

In many cases, the sources said, these operators offer patients free access to board-and-care facilities and a daily supply of morphine. Another frequent practice among these hospices is to offer patients cash or other items in addition to drugs, they said.

Leaders in the hospice space were quick to condemn the reported actions of these fraudulent hospices and have called for strict penalties.

“This conduct raises serious fraud concerns on kickbacks or gifts to beneficiaries who do not appear to qualify for hospice,” Bill Dombi, president of the National Association for Home Care & Hospice (NAHC), told Hospice News. “More importantly, this conduct is predatory, taking advantage of individuals in addiction. Jail time is not enough punishment for the harm that such conduct creates.”

One executive described the practice as being carried out by someone who owns several hospices and board-and-care homes.

“They get homeless patients from methadone clinics and tell them, ‘Just come and live at the house, and we’ll give you constant morphine; we’ll give you a constant supply,’” the hospice executive told Hospice News. “They have continuous care nurses who are there all the time and they basically keep patients on high-dose morphine.”

The executive said they did not know whether these board-and-care homes were licensed.

Board-and-care homes are designed for older adults or seriously ill patients who need assistance with activities of daily living and prefer to live in a smaller community than a larger senior living facility. They are often located in residential or rural areas. In some states, but not all, these services are covered by Medicaid.

The executives alleged that many of these patients, before enrolling in hospice, had been receiving methadone treatment for Opioid Use Disorder (OUD). The drug is also sometimes used for general pain management. Methadone therapy is generally considered to be safe and effective, and when used for OUD, is one component of a comprehensive treatment plan that also includes behavioral health therapies, according to the U.S. Substance Abuse and Mental Health Administration.

As of 2022, an estimated 9.4 million U.S. adults needed OUD treatment, and about 55% of those received it, according to the U.S. Centers for Disease Control and Prevention (CDC). The need for treatment was higher among patients who live below the poverty level, CDC reported.

In most OUD cases, the patients must go to a clinic to receive their dose rather than taking the medication home.

Giving patients with OUD access to morphine leads to resurgent addiction, serious side effects and in some cases death, according to one hospice executive, who is concerned that deaths due to overdose in these board-and-care facilities could be disguised as terminal illness. The scheme might depend in part on such patients dying on a timeframe that allows the hospice to manage its payments within cap limits.

“It’s like a pyramid scheme,” an executive told Hospice News. “They are constantly in this situation: ‘We need more patients, and we need patients that are going to die.’”