Fraud and program integrity concerns dominated the news in 2024, along with large acquisitions, payment rules and regulatory changes.
This year saw regulatory evolutions spurred by program integrity concerns, as well as the introduction of landmark legislation, shifts in reimbursement trends and a change in presidential administration with unknown impacts across the care continuum.
The U.S. Centers for Medicare & Medicaid Services (CMS) ramped up auditing activity in the space while also sunsetting the hospice component of its value-based insurance design (VBID) model demonstration ahead of its initial expiration.
Meanwhile, lawmakers unveiled a bill with some of the most significant reforms proposed to date for hospice payment and oversight. Dubbed as the Hospice Care Accountability, Reform, and Enforcement (Hospice CARE) Act, the bill has ignited conversations across the industry about future sustainability, growth and program integrity.
These were just some of the themes percolating among the most-read Hospice News coverage of 2024. About 40% of this year’s readers were drawn to fraud issues, while regulatory, reimbursement and M&A topics comprised the remaining 60%.
The following are the most-read Hospice News articles of 2024.
#1: FBI Arrests 5 in $15M Hospice Fraud Plot
The FBI in June reported the arrest of five people in connection with a $15 million hospice fraud and money laundering scheme. The arrests took place in California, a state that has been rife with hospice fraud in recent years.
Defendants were charged with conspiracy to commit health care fraud and aggravated identity theft and conspiracy to launder money. The U.S. Justice Department has accused the five individuals of spending the money on real estate, vehicles and other goods and services. All five defendants face a maximum penalty of at least 40 years in prison.
The case is not the only one this year to involve potential imprisonment for suspected fraud, waste and abuse, with more malfeasance unfolding in California.
Two months prior the Justice Department sentenced two individuals linked to California hospices on alleged False Claims Act violations, among other changes. Federal judges issued prison sentences to two hospice leaders for their alleged roles in a scheme that bilked millions in false Medicare claims.
Defendants were charged with wire fraud, health care fraud and money laundering. Charges also included theft of government property for their alleged roles in fraudulently obtaining funds from the Paycheck Protection Program, established during the COVID-19 public health emergency.
These cases come at a time of mounting program integrity concerns in the space. Beginning in 2021, numerous reports emerged of unethical or illegal practices among hundreds of newly licensed hospices, particularly among new companies popping up in California, Texas, Nevada and Arizona. Fraudulent hospices have since continued to proliferate in these regions, and some may be moving between states to escape regulators.
#2: 7 Arrested in Arizona on Hospice, Behavioral Health Fraud Charges
Seven individuals in Arizona are facing federal charges for their alleged roles in defrauding Medicare out of hundreds of millions of dollars. The charges mainly stem from submitting Medicare claims for patients who were not eligible for hospice care, as well as fraud related to behavioral health services.
The individuals were arrested following a two-week nationwide federal law enforcement action that resulted in criminal charges for 193 individuals and a total of more than $2.75 billion in alleged false claims, as well as opioid abuse schemes.
The case illustrates the scale of activity occurring among fraudulent actors seeking a profit while providing poor or negligent care and exploiting the vulnerability of specific patient populations.
#3: Medicare Advantage Beneficiaries Less Likely to Receive Aggressive End-of-Life Care
A new study published in July found that Medicare Advantage (MA) beneficiaries are less likely to receive intensive treatments or burdensome transfers during the last six months of life compared to those in traditional Medicare.
The research, published in JAMA Health Forum, also found that MA enrollees are more likely to receive hospice care and less likely to receive facility-based care after a hospital discharge.
Researchers identified gaps in which patients don’t always receive sufficient post-acute care, such as factors related to MA plans’ focus on controlling costs, whereas fee-for-service Medicare incentivizes more aggressive treatment.
The financial incentives in Medicare Advantage are designed to reduce overutilization, researchers indicated. MA incentives may reduce potentially burdensome care and encourage hospice while also potentially restrict access to costly, but necessary services at the end of life, they stated in the research.
The findings point to hospice’s value proposition to reduce spending in both the MA and traditional fee-for-service models. Utilization of hospice services can lead to significant cost savings at the end of life, a trend picking up steam among other research efforts.
Longer stays reduce health care costs in the last year of life by as much as 11%, according to a 2023 report from the National Hospice and Palliative Care Organization (NHPCO), the National Association for Home Care & Hospice (NAHC), and NORC at the University of Chicago. NAHC and NHPCO have since joined forces to form the National Alliance for Care at Home.
Hospice care — regardless of length of stay — was found to save Medicare approximately $3.5 billion for patients in their last year of life, a 3.1% reduction. But hospice stays of six months or more yielded the highest percentage of savings.
#4: CMS to Sunset Hospice VBID in 2024
CMS in March announced that the hospice component of the value-based insurance design (VBID) payment demonstration would end as of December 31 instead of expiring as planned in 2030. Often called the “hospice carve-in,” the program was designed to test coverage of hospice care through Medicare Advantage, in addition to some coverage of palliative care and transitional care.
The hospice component launched in 2021 and is part of the larger VBID demonstration, which will continue until 2030 and covers services across the health care continuum.
CMS cited “operational challenges” with deploying the carve-in but did not expound on the details leading to its decision.
An analysis by RAND Health Care illuminated some of the potential barriers. Among the issues for payers was a lack of participating hospice providers and development of payment contracts with those agencies, as well as decreased participation among Medicare Advantage Organizations (MAOs). Another difficulty was the retooling of some administrative processes, including claims processing, the analysis found.
Among the potential impacts in the post-Medicare Advantage carve-in landscape could include wider value-based reimbursement avenues in the hospice space, leading some providers to pivot into MA payer relationships.
Questions and concerns linger among providers, even as many operators welcomed the hospice carve-in’s sunset. Some saw it as a challenge to the traditional Medicare Hospice Benefit, while others cited issues with MA plans adjudication of claims denials, delayed payments and confusion on varying patient eligibility requirements among plans.
#5: 2 Charged in $54 Million Hospice, Health Care Fraud Case
Two individuals in California were arrested for their roles in a $54 million scheme to defraud Medicare for hospice and diagnostic testing.
One of the alleged perpetrators, Sophia Shaklian, was charged with 16 counts of health care fraud and four for transactional money laundering. The second, Alex Alexsanian, was charged with one count of conspiracy to launder monetary instruments and three counts of concealment money laundering.
The laundering allegedly included purchases of $6 million in gold coins and bars using illicit proceeds, the U.S. Justice Department.
Though not the first fraud case to unfold in 2024, nor the most substantial in terms of dollar amounts, the arrests highlight the risks of criminal charges that hospice personnel could face in instances of suspected fraud, waste and abuse.
The case also illustrates mounting concerns about malefeasance and unscrupulous conduct occurring among some operators in the space.
Though the vast majority of False Claims Act cases do not result in criminal charges, the steps toward resolving these cases prior to the point of a federal jury trial can be treacherous for hospice providers. The regulatory stakes are high for hospice providers when it comes to FCA violations.
Some fraud cases have had hospice owners facing prison sentences and heavy financial repercussions. In some cases, hospices’ Medicare certification have been revoked, while others have been barred from practicing in the industry.
#6: Fraudulent Hospices Reportedly Target Homeless People, Methadone Patients to Pad Census
An investigation by Hospice News found that some fraudulent hospices in California were trolling methadone clinics offering homeless patients or those with substance abuse disorder daily access to morphine 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.
#7: Hospice Community Responds to CMS 2025 Hospice Rule; Navigating New Requirements in the 2025 Proposed Hospice Rule
Two articles on the CMS proposed and final hospice payment rules for 2025 were tied for the seventh spot this year.
The first gauged the hospice community’s reaction to CMS final payment rule for 2025, including a 2.9% increase in per diems that many providers held to be insufficient in today’s economic climate. Stakeholders in the space contend that rate hikes have not kept pace with inflation, rising labor costs and other headwinds in the hospice space, as well as lingering effects of COVID.
Some have also indicated that the payment rates are making it more difficult for hospices to compete with other providers when it comes to hiring staff.
The final rule also included other provisions related to quality measurement and technical updates to the Conditions of Participation and Payment. For instance, the rule updates the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, as of October 2025. This includes the addition of an email invitation to a web survey, with follow-up by mail to non-responders. It also pledges to “shorten and simplify” the survey, according to CMS.
It also removed three nursing home items from the survey, revised the existing Hospice Team Communication and Getting Hospice Care Training measures and added a new Care Preferences measure. Additionally, the rule included language to clarify that designated physician members of the hospice interdisciplinary team may certify patients for hospice if the medical director is unavailable.
The second piece looked at elements of the 2025 proposed rule that would represent new requirements, if finalized. The most prominent of these was the 2025 implementation of the Hospice Outcomes & Patient Evaluation (HOPE) tool, which will replace the Hospice Item Set.
While hospice organizations have expressed support for the new tool, contingent upon effective implementation, it could also bring some challenges as providers adapt to a new quality reporting system. One item of particular difficulty will likely be operationalizing the Hospice Update Visits that the new measurement methodology will require.
The proposed rule also contained no new provisions related to fighting fraud or improving program integrity, a surprise to many stakeholders.
#8: [UPDATED] VITAS to Acquire Covenant Health and Community Services’ Hospice Business for $85M
Miami-headquartered VITAS Healthcare Corporation in March announced intentions to acquire Covenant Health and Community Services’ hospice operations and one of its assisted living facility locations for $85 million.
The transaction completed in October and marked the Chemed Corp (NYSE: CHE) subsidiary’s entrance into the Alabama market while expanding its geographic footprint in Florida. VITAS views the Covenant Health deal as a large growth engine, with these assets bringing in an estimated $8.2 million to $8.7 million of revenue during the third quarter.
The purchase also marked a more strategically active period for the hospice provider compared to previous years.
VITAS has largely been mum on the merger and acquisition (M&A) front, fueling greater focus into its organic growth strategy. The company launched a new location in Florida in October, also expanding with two de novos in California that same month.
Recent record-high valuations in the hospice M&As market were among the factors shaping this growth strategy, VITAS CEO Nick Westfall indicated in a 2020 earnings call. The “very high” pricing of hospice assets was among the main reasons that the company saw de novos as “the best market entry strategy,” Westfall previously stated at the time. Valuations have since come down, but remain relatively high.
Ramped up M&A activity among one of the largest providers in the hospice industry could signal that more moves are on the horizon among others. Stakeholders have projected a more frothy market in 2025, with signs of life ebbing among relatively quiet years in the hospice space. Factors have included dampening valuations as well as a decline in interest rates for the first time since 2020.
#9: [UPDATED] Rep. Earl Blumenauer Plans Landmark Hospice Reform Bill
Rep. Earl Blumenauer (D-Oregon) introduced the Hospice Care Accountability, Reform, and Enforcement (Hospice CARE) Act in September. The landmark bill, if enacted, could revolutionize the Medicare Hospice Benefit, which has been largely unchanged since its establishment in 1983.
Blumenauer announced the bill’s draft in June at the Hospice News Elevate conference in Washington D.C. The bill includes an overhaul of the per-diem payment system, along with a slew of other regulatory updates and changes to the benefit.
Among the significant changes included would be a reduction in hospice daily rates and the addition of a per-visit payment for clinical services to ensure that hospices are delivering appropriate care to patients. The legislation would also institute a payment add-on to support delivery of higher-acuity care palliative services such as dialysis, chemotherapy, radiation and blood transfusions.
The Hospice CARE Act has the potential to ‘dramatically reshape’ end-of-life care delivery, sources told Hospice News. Recent years have brought mounting financial and operational pressures for providers, who have seen demand rise alongside swelling aging populations with terminal and serious illnesses. Making changes to a longstanding benefit could help providers support a wider range of future patient needs, according to hospices.
The bill would also establish a temporary, national moratorium on the enrollment of new hospices into Medicare, a move aimed at curbing fraudulent activities among a rash of recently established providers concentrated primarily in California, Arizona, Texas and Nevada.
The proposed moratorium has been viewed as a potential tool that could allow regulators to better target program integrity on a more permanent basis.
The Hospice CARE Act contained several other provisions designed to better detect instances of fraud, waste and abuse. If enacted as written, the bill would mandate the establishment of a technical expert panel (TEP) on the moratorium by the Secretary of Health and Human Services. The TEP would establish standards for identifying a hospice program with a history of “aberrant billing patterns.” The panel would also develop standards for enforcement actions, including analyzing data from prepayment medical reviews.
#10: [UPDATED] Court Orders VitalCaring to Place 43% of Profits into Trust for Encompass Health, Enhabit
A federal judge in Delaware recently issued a court order stipulating that Enhabit Inc. (NYSE: EHAB) and Encompass Health (NYSE: EHC) receive 43% of future profits from VitalCaring Group and its private equity backers, which include Nautic Partners and The Vistria Group.
The events surrounding the case began in 2022 when Enhabit became a standalone home health and hospice business after its spinoff from Encompass. April Anthony served as CEO of Encompass’ home-based segment at the time, stepping into the same role at Texas-based VitalCaring with its launch in 2023. The company provides hospice, home health, companion and pediatric care, among other home-based services.
Enhabit and Encompass are joint plaintiffs in the case. Encompass has alleged that Anthony violated terms of her employment agreement by breaching non-competition and non-solicitation obligations, and for misappropriation of trade secrets.
Nautic Partners and The Vistria Group are currently considering a potential appeal of a federal court’s recent decision.
The case could have wider implications for other transactions and business endeavors in the hospice industry. The court’s ruling could have a ripple effect on UnitedHealth Group’s (NYSE: UNH) pending acquisition of home health giant Amedisys (Nasdaq: AMED). Amedisys is seeking to divest 100 locations to VitalCaring to move the deal forward in light of potential antitrust concerns from the U.S. Justice Department, which has filed a lawsuit to block the transaction.
The case comes at a time of mounting concern around the growing private-equity interest in hospice as these investors continue to see out assets in the space. Private equity activity hit record levels in 2021, raising the stakes in hospice deals and stepping up competition for acquisition targets. These large-scale transactions led to important industry-wide trends in hospice that accelerated in preceding years, and brought a ripple effect on valuations alongside a shrinking pool of available assets.
Some hospice providers have held off on deal-making due to the high pricetags of assets, with the market seeing a cooling period that began in 2022.
