Nevada lawmakers have introduced a bill to curb hospice fraud in that state.

Nevada is among the four hotbed states seeing escalating program integrity issues in recent years, joined by Arizona, California and Texas. Sponsored by Assemblymember Rebecca Edgeworth (R-Las Vegas, District 35), the newly proposed bill introduced a number of measures that could widen the scope of state enforcement activity.

Among the significant changes that the legislation proposed was having newly licensed hospice programs in Nevada undergo enhanced regulatory oversight for the first two years of operations. Goals of the legislation include an aim to decrease fraud and improve hospice care statewide, according to Edgeworth. But the path toward progress comes with several considerations, she indicated.

“[The bill] increases monitoring of new hospices shortly after starting to do business to make sure they are operating legitimately,” Edgeworth told Hospice News in an email. “We expect several amendments, since there are a lot of stakeholders who want to get it right.”

Laying the groundwork for change

If enacted, the legislation would require hospice programs to be licensed by the U.S. Department of Health & Human Services’ (HHS) Division of Public and Behavioral Health. The bill also proposes to impose certain requirements governing the operation of a hospice program. Some of the requirements stipulated that operators must be accredited and be Medicare certified.

The new bill also includes new requirements for staff training and meeting nationally observed hospice care standards.

The legislation also proposes to require hospices in Nevada to provide written disclosures to patients and families once they start billing for their care. Providing a “Hospice Bill of Rights” disclosure could help prevent ineligible patients from unknowingly being signed up for hospice care, Edgeworth indicated. The disclosures would also help provide education around the types of end-of-life care hospice patients are eligible to receive, she added.

A large portion of the fraudulent activity involves violations of the False Claims Act (FCA), or cases that often hinge on questions around patient eligibility for hospice care based on a six-month terminal prognosis. In some instances, patients who are not eligible for hospice are being enrolled without their knowledge or consent, while other cases have occurred in which hospice patients did not receive care for billed services.

“[It’s] so people can’t be signed up for hospice when they didn’t know they were signed up,” Edgeworth said. “[The] written disclosures, ‘Hospice Bill of Rights,’ advise [patients] and families of nationally recognized standards of care with hospice, so they have reasonable expectations about what they can anticipate.”

Other proposed requirements would prohibit a hospice program from accepting new patients or transferring their billing Medicare billing privileges in certain circumstances. These include if owners of the hospice program have been found to have committed a violation of federal, state or local law related to payment for health care, among other circumstances. Additional provisions in the legislation would prohibit the transfer of Medicare billing privileges within the first 60 months of licensure or with a 50% change in ownership.

The fraudulent practice of “license flipping” has escalated in recent years. This involves a hospice operator selling their license soon after obtaining it, before regulators can detect or act on alleged malfeasant activity. The practice appears to stem from a rash of newly licensed hospices that have emerged in Nevada, Arizona, California and Texas. Many of these sales involve certain brokers who move the licenses between owners.

“In the last few years, there has been this horrendous influx of charlatans and flimflam artists,” Edgeworth told local news. “What I’m trying to do is hold people to a higher standard.”

Implementing a moratorium in Nevada could potentially pose harmful impacts for legitimate new operators seeking to expand hospice access, particularly in rural regions with limited resources, according to Edgeworth.

California became the first of the four fraud hotbed states to take regulatory action in 2021. Two major reform laws passed, one of which mandated a statewide moratorium on hospice licensing, as well as an extensive audit of its licensing and oversight processes.

To date, similar legislation has not been introduced in Texas or Arizona.