Fraudulent operators’ marketing strategies are morphing the competitive landscape, making it difficult for legitimate hospice providers to maintain visibility among patients and families.

A mounting concern is that fraudsters stepping into the hospice industry have been implementing marketing and outreach practices that at times mirror strategies utilized by quality providers, according to Jeanne Chirico, president and CEO of the Hospice & Palliative Care Association of New York State (HPCANYS). This makes it difficult for referrals, patients and their families to discern the best end-of-life care option.

Another significant concern is that the fraudulent actors may have deeper pockets compared to smaller or nonprofit hospices, allowing them to invest more heavily and saturate the market with their messaging.

“Competition is not equal. Good actors have more pressure applied to them, and they’re at risk for negative public appearances,” Chirico told Hospice News. “If you look at the dollars being invested in marketing … These bad acting hospices can spend three times as much on marketing as nonprofits that don’t have that kind of money. The public education marketing may look the same, but it’s this plethora and an overdose sometimes of these actors placing staff where they can scoop up and cherry-pick referrals that are high paying.”

Chirico and other hospice leaders are concerned about a range of challenges stemming from the proliferation of bad actors and how they are reaching patients. Some are using illegal or unethical tactics that have left legitimate hospices in some regions struggling to compete.

Detecting malfeasant marketing tactics

Four states have garnered national attention as fraud hotbeds — Arizona, California, Nevada and Texas. These regions have seen a swarm of new hospices emerging and receiving federal funding. Multiple reports of unethical or illegal practices have surfaced, particularly among new companies.

In some cases, dozens of new operators were billing Medicare from the same location without a corresponding increase in eligible patient populations.

Combating these operators’ unscrupulous marketing practices has complicated hospices’ ability to communicate to the public and to referrals what quality end-of-life care looks like, according to Paul Ledford, president and CEO of the Florida Hospice & Palliative Care Association (FHPCA).

Quality providers need more than a strong reputation to strengthen referral source engagement and gain a leg up on fraudulent actors, he stated.

“This illegal stuff is not being done by true hospice providers, so it’s really difficult to compete against [them], because it’s like fighting against a phantom,” Ledford told Hospice News. “It’s not really a fair competition, especially when you think about people being enrolled in hospice who aren’t eligible. A legitimate provider is not competing for those patients because they are not hospice patients.”

Fraudsters in some regions have increasingly approached seniors attending activities such as bingo at their church or local community centers, a hospice executive told Hospice News on condition of anonymity. In some instances, these individuals are offered financial incentives of up to nearly $2,000 in monthly payments to enroll in hospice care, often without knowing how their information would be utilized, according to the source.

One aim of having a large contingent of these “bingo patients” sign up for hospice is to bill Medicare for services, then quickly shutter the program and transfer patients to another hospice before regulators can detect malfeasance, the source indicated.

In addition to bingo halls, scammers have targeted seniors at casinos and other known areas where older adult populations often congregate, according to Sheila Clark, president and CEO of the California Hospice and Palliative Care Association (CHAPCA). These operators have also approached seniors in assisted and independent living facilities, Clark stated.

Scammers in some cases have offered individuals hundreds of dollars in exchange for their Medicare identification beneficiary number, while others offer free goods and services including gift baskets, lawn care, TVs and furniture such as recliner chairs, she added.

Fraudulent hospices have also allegedly targeted homeless populations and methadone patients, promising opioids in exchange for hospice enrollment, Hospice News previously reported.

“These folks need to know that this is a scam and it’s not okay,” Clark told Hospice News. “[The fraudsters] are charismatic sweet talkers who say they can give you all this good stuff and pay you. It becomes very difficult and embarrassing for the person and their family. They’re lying to them to enrich themselves and trolling these assisted and independent living facilities, but this is not how you access hospice services.”

Quality providers are facing an uphill battle in differentiating their services from scammer practices, Clark stated. Public and referral messaging should include clear, appropriate information about what hospice care is and is not, she added.

A main issue is that misconceptions about hospice have long proliferated in the general public, a trend that has worsened as media coverage takes a broad brush to describe fraud in the industry, Ledford indicated.

“Most people aren’t going to dig down into these stories to recognize that the majority of hospices don’t do this,” he said. “It’s really an isolated few, so this broader brand of hospice providers is impacted by that. We don’t usually get the opportunity to say that to the average person when these incidents happen — and that does damage within the public.”

Safeguarding against marketing fraud

Regulators have increasingly recognized the impacts of fraud, waste and abuse in the hospice space and have heighted program integrity oversight measures in recent years.

Fraudulent practices complicate the ability for patients and their families to make informed decisions about their end-of-life care options when the time comes, Clark indicated.

“We can’t say that fraud is not impacting us and our ability to provide good hospice care for those who need it, because once they’re scammed it can come with a very, very heavy burden of asking, ‘How did this happen to me?’” she said.

Regulatory watchdogs have taken a “sledgehammer” approach to program integrity oversight in recent years, but bad actors have continued to “skirt around” new policies and quality reporting requirements aimed at curbing malfeasance, Chirico stated.

Bad actors are willing to take financial hits and even face potential imprisonment for their activities. And as a result of these activities, quality providers are facing increasing obstacles as they struggle to communicate the value proposition of their services to the general public and referral sources, Chirico said. A growing need exists for regulators to set guidelines that help “level the playing field” for competition in hospice, she indicated.

“The biggest concern would be the level-setting of public perception,” she said.

Fraudulent marketing activity in part sparked the U.S. Centers for Medicare & Medicaid Services (CMS) to launch a bilingual outreach toolkit for hospices, which the agency disseminated to providers and stakeholders in late July 2023.

The toolkit includes guidelines for hospices to help educate Medicare beneficiaries and their families on ways to protect themselves against fraudulent marketing practices. Scammers have offered seniors incentives such as “in-home perks” including free cooking, cleaning and home health services, while they are unknowingly being signed up for hospice services, CMS stated in the toolkit.

Malfeasance in hospice poses several challenges related to sustainability and access to these services, according to CMS.

“Criminals are using every avenue they can to sign you up including door-to-door visits, false advertising, phone, text and email,” the agency said in the toolkit. “When criminals commit fraud, and falsely bill Medicare, people’s medical records may become inaccurate and they can suffer delayed [treatment] or even be denied care. In the end, Medicare fraud costs taxpayers billions of dollars every year. Each dollar lost to fraud takes away resources intended for people with Medicare.”