Stayin' Alive: Hospice flourishes, serving the profiteers by "caring for" those who die at a leisurely pace

Please, for god's sake, don't die! Hospice needs all the clients it can get!
The stockholders set some almost impossible 'benchmarks' at the last meeting! "


    The young lady in the Hospice for Utah shirt was giddy and shameless. She and her fellow employees were in the process of buying the "death with dignity" hospice business from the charismatic and energetic founder, Cathryn "Kit" Jackson, for $10 million. Pretty soon this lucrative operation would be all theirs, and the sky would be the limit, she told me two months ago.
    I was having breakfast with a friend at an Assisted Living facility. The hospice aide was there to bathe and dress a client and escort her to the dining room. This in itself was absurd, since the client was already paying to be bathed and dressed by facility employees. But when hospice moves into your end-of-life drama, they take center stage,  and Medicare pays for it.
     "Where are you getting the funds to buy the company?" I asked the pleasant-faced Hospice girl.
    "That's what's so great," she said. "Every quarter, we get to split up the left-over money. You know: the allotment that Medicare sent us to take care of the clients. We get that, plus our salaries! If we didn't keep the leftovers for ourselves, we'd have to send it all back to the government.  Kit's already rich, and now we've got a shot too." Kit, who is an admirable, enlightened person in many ways, is now content to bake cookies with her grandkids or ski the Alps, her website says.
    Even though I knew from my previous investigations that the vast majority of hospice firms are for-profit, it had never occurred to me that the profit they make consists of money disbursed  for patient care that is not spent for patient care. That should have been obvious, but I still find it shocking. The incentive to spend as little as possible on patient care is built into the system. More stupidity! Can't the government get anything right? 
    This is the story of how a compassionate, progressive concept morphed into one of the most fraudulent  (and painfully disappointing) (and profitable) enterprises in our economy.


Kit Jackson with her daughter Maurika, who runs Kit's other hospice in Missoula, Montana.
Hospice of Missoula purportedly lives by the mantra: “Doing the right thing is our bottom line.”

     Doing the right thing? I guess you can serve more than one master at a time, but over ad over again I have seen money-lust warp people's values and judgement. That dynamic is certainly evident in the history of hospice in America, as I will document below.
    These kids at Hospice for Utah are positively ecstatic about what the future holds for them, once they really become expansionists with the 25-yer-old company. It's a jungle out there, as the wealth potential of the hospice industry becomes manifest to more opportunists. Hospices are popping up everywhere. Then they get bought up by chains, and then the hedge-fund guys move it, with their eyes squarely on the bottom line. Profit, not compassionate care, become the driving force.

(or reversing it) / art by devianteles

     The largest for-profit hospices are doing particularly well: A 2005 study in the Journal of Palliative Medicine found that large hospices owned by publicly traded companies generate profit margins nine times higher than those of large nonprofits and three times higher than privately owned for-profit hospices of similar size. This discrepancy has gotten even greater in the ensuing years, according to the Washington Post.
    I think the staffers at Hospice for Utah, and at many other hospice operations, are probably very nice people, most of whom are committed to being of service, and of treating their patients well. Those who choose such professions as social work, nursing, and patient aide are a special breed, and I'm sure that's immanent in how they do their jobs. I doubt that they think they're screwing anyone, even though it's obvious to them that their company cuts corners and exploits the rules. They're just "gaming the system," like everyone else.
     ''Once you 've done your time in the trenches, you can just sit back and let the checks roll in," one of them told me in 2009.
    Hospice for Utah dazzled my family when my father was in decline in 2009. An attractive, articulate sales team met with us (after giving each of us a festive, sparkly purple gift packet containing items with their logo on it) described all the services they would be providing "for free," which included companionship tailored to a dementia patient ("reading, listening, reminiscing"), regular nurse visits, medications, specialized activities, restorative therapies, and spiritual/emotional succor. Physical and occupational therapy would enable him to regain the strength to stand, walk, and bathe independently.  He would be enfolded in a world of expert, compassionate care. All equipment -- oxygen, a walker, shower chair, heightened toilet seat, incontinence products, etc -- would be provided FREE. That was the big word that had them beaming and us feeling uneasy. We know that whether we pay or not, it's not "free."
    Still, we signed up and waited for the blissful, Florence Nightingale-ish magic of hospice care to unfold. Weeks passed, and no one showed up, except that an aide arrived each morning to rouse my father at the assisted living facility, shower him, and escort him to breakfast.

    I expressed frustration that my father was basically lying there, rotting away, when hospice's m ission statement had painted such a glowing tabl eau of expert care. All contact with hospice had ceased, once we signed on the dotted line.    
    We saw no "focus on hope," no creativity, no "Personalized plan of care", no consultation with the primary physician, no "calming, soothing, joyful" Snoezelen, with its "rejuvenation, relaxation and reconnection," no companionship from volunteers or anyone else. (The hospice nurse wrote that my father was "isolated in his room" and sleeping 80-90 percent of the time. That's what he was doing before we signed up with this company -- a situation we wanted to rectify.

    Hospice's much-vaunted Snoezelen therapy was supposed to help him "reconnect with the world ( he) left behind.'"

       As they were giving us their very well scripted sales pitch, they declared: "Hospice care focuses on hope - hope to l ive every moment of our lives in comfort and dignity . . .We pride ourselves on being creative with our care and tailoring our services to fit your needs.    

     They stressed -- as many hospices have illegally done -- that you "don't really need to be expected to die within six months. That's just a technicality. If he's still alive after six months, we just sign him back up! Some people are on hospice for years!"
    Although Medicare has tried to clamp down on this approach, it has continued, and in some respects gotten worse. Investigations have found that for-profit hospices "cherry pick" patients who are healthiest, ensuring that the revenue stream will be flowing as long as possible. 

    To make matters worse, my dad apparently suffered not just from a lack of care from Hospice; the care he did receive was highly questionable. He was medicated in an uncoordinated, slipshod way that didn't refl ect our verbal agreement
during the intake process; he was medicated without adequate diagnosis, without consulting our family or his primary care doctor, without reviewing his medical history and without adequate oversight and follow-through. An account of this aspect would require a whole article in itself.

     It was when we got Daddy's Medicare statement that this travesty became unacceptable to us.

    Hospice was collecting far more every day for rousing and bathing my dad than we were payi ng the assisted living facility, on a per diem basi s, for a lovely apartment in a beauti ful building, staffed by del ightful people, plus three meals a day and several support services.

    The CEO of Hospice was furious when I criticized her operation. She said no one had ever complained before. My response was that people aren't likely to complain when they're getting "free stuff," even if it isn't as much free stuff as they'd expected.

    "Dying has become a multibillion-dollar industry," a Huffington Post series on hospice declares. Sounds delicious, doesn't it? Do some hand-holding, murmur words of faith and gratitude into the ear of a dear, pale lady, and before long, poof: You've got a great revenue stream. 

Taxpayers say goodbye, revenue waves hello, to the hospice hucksters.

     A 2011 ad for a seminar in Portland provides insights into the Hospice for Utah founder's mindset, and into the mindsets of the thousands of those who chose this "business model":

Turning Your Passion Into Financial Freedom:

    Do you want to know what it takes to turn your small business, or your dream for a business, into a lucrative and prosperous enterprise? We are all eager for the freedom that financial success affords, but many entrepreneurs need guidance getting there. Join us as Kit Jackson, founder of Hospice For Utah and Hospice of Missoula, shares what she has learned about building a thriving business and turning a dream into financial freedom.
    In Utah, where her first hospice is, there was originally ONE company doing what she was doing - her company.  Now there are over 150 hospices in the area because they all want what she has.  Competition is fierce and she has to be vigilant to stay on top of current trends and invent her own.

    Yes indeed, they all want what she has: Millions of dollars, courtesy of U.S. taxpayers.
     This is dismaying. So many sensitive, noble, socially progressive institutions and movements in our country have lost sight of their core mission, when the prospect of making millions of dollars has presented itself. Most nonprofits -- including the most respected in the country -- aren't really nonprofit: They just take what a corporation might call profits and pay their executives huge salaries, ensconce them in fabulous office suites, and provide extravagant travel, entertainment and retirement benefits.

Compassionate care, combined with compulsive overeating of Medicare funds.

     Hospice for Utah billed itself as a nonprofit, until I publicly pointed out in 2009 that its website offered "profit-sharing" to vested employees. Kit Jackson lashed out at me, but quickly ceased claiming to be nonprofit. One of her employees, a young woman, told me she was going to be able to quit soon, and live off of the "dividends" her stock in the company would continue to pay her.
    Until 1986, hospice in America was a grassroots, genuinely charitable endeavor, which sought to aid dying patients while enabling them to spend their final days at home, surrounded by loved ones, rather than to be in a cold, sterile, unfamiliar environment, hooked up to all sorts of tubes and machines. 

This isn't the dream, but for the vast majority of  Americans it's the reality. Sorry, Daddy.

    At that time, hospice was generally regarded as one of the finest examples anywhere of "people helping people." It was often referred to as "a godsend," as gentle people of good will poured their hearts into bringing some light and peace into the dark process of dying. 
    Hospices exist, purportedly,  to provide comfort to people who doctors determine are at the end of their lives, with six months or less to live. The paramount objective, according to the National Hospice and Palliative Care Organization, a trade association, is to make patients comfortable, with a focus “on enhancing the quality of remaining life.”
    Hospice was intended to provide palliative (comfort) care to terminal patients, emotional support for them and their families, and even help with meals and housekeeping. This volunteer work seemed to have a spiritual aspect to it, even when it wasn't associated with a church.
     And then it rapidly all went to hell.  


    The "Medicare Hospice Benefit," passed by Congress in 1986,  immediately transformed the purity of hospice into a lucrative entrepreneurial venture. At that time, the fee schedule was designed to incentivize hospices to pile on the services and bill accordingly. So there were girls popping into people's rooms, spritzing some lavender in the air and billing Medicare for "aromatherapy." There were back rubs by unlicensed "masseuses" and "reminiscence chats" with lovely young ladies, and 10-minute "spiritual uplifts" by area pastors, and "bucket list" dialogues with social workers, although it seemed odd to develop a bucket list if you were on the threshold of death. Oh well, at least the girls got paid. All sorts of people got paid, especially those who owned the hospice businesses.

Isn't it fun to make a bucket list when you're in bed, dying? Climb Everest!

     Less than 10 years after hospice was given Medicare-benefit status, hospice providers were specifically targeted in a wider probe of Medicare fraud by the Office of Inspector General (OIG).  They have been charged with fraud over and over again ever since. The majority of them have been found to submit deceptive billing to Medicare, according to published reports.

    When I complained about Hospice for Utah's failings, the owner told me that only one other person had ever expressed dissatisfaction. "People love us," she said. That doesn't surprise me, since everything hospice does is "free" to you. 

Who doesn't?

    (International law firm Morgan, Lewis & Bockius has published a 37-page guide for hospices to avoid regulatory scrutiny, and a 47-page guide to "achieving a favorable outcome" if you are investigated for Medicare fraud. They are very savvy.) 
    The sweeping Inspector General probe took place in the good old days, when the hospice industry had not yet become a multibillion-dollar interest group. Hospice fraud is so rampant today, that it isn't hyperbolic to call it "business as usual."
    Eventually, the fee arrangement was changed, so that hospice was paid by the day, rather than for each "service" or "comfort amenity" provided. Per-diem fees range from about $160 to $900 a day, depending upon whether it's occasional or full-time home care, or inpatient care. 

A hospice worker warmly reminisces with a terminally ill patient at his home.

    Hospice gets these fees whether it provides any services on any given day (or week) or not. A federal advisory panel on Medicare spending has cautioned for years that these financial incentives are likely to push companies to enroll patients who aren’t appropriate for hospice. When my father was enrolled, we -- like so many families at that time -- were told, "It doesn't matter if he has 'less than six months to live.' If he stays alive, we can just draft an ongoing agreement." 
    We thought they were being awfully nice. Little did we know that they regarded us one more "accounts receivable" to plump up their profits. I must admit that the young nurse, social worker and the aides seemed to be competent and kind. The poorly paid aides were particularly lovable and cheerful, as poorly paid aides tend to be. I will elaborate later in this post on why we removed my father from hospice.

The aides, most of whom were minorities or immigrants, did wonderful work for terrible pay. It's exploitation.

    Many families speak in reverential terms "about the kindness a beloved hospice nurse showed a father, uncle or sibling," according to a Huffington Post series. "But in interviews, many nurses said business managers imposed unrealistic quotas that forced them to rush visits. Hospice doctors, they said, visited at-home patients only on rare occasions. Patients have suffered as a result, they said."
    (Just one of thousands of examples of outright fraud: A Lamar County, Georgia, woman claimed in July of this year that a for-profit hospice company took advantage of her dying husband, pocketing thousands of Medicare dollars without ever showing up to help, and without her ever even signing any papers, according to Fox News Atlanta. "Having no professional help for her husband, the woman took early retirement from her job as a school bus driver, costing her thousands of dollars in future pension money. Then, last fall, she had to go back to work part-time to pay for his meds, not realizing that Medicare was already paying a hospice company for services her husband never got. A fraud investigation indicated that the firm "Kathy Cares" had billed Medicare for five months of home hospice -- collecting $23,749," the Fox investigation stated.)

Phantom patients make profiteers feel positively operatic.

    But this is small potatoes, as they say in Georgia, compared to what the big-time hospice firms do, raking in tens of millions of dollars for phantom patients and phantom care. I have appended a few more illustrative examples at the end of this post.

    A primary concern of MedPAC is that the per-diem payment method encourages hospices to seek out patients likely to live longer than the six-month criterion. Commercial hospices in particular tend to have longer-staying patients, studies have shown. The average hospice stay has increased dramatically since 2000, regardless of diagnosis, a HuffPost analysis of Medicare data found. This has led to a surge in expenditures: $15 billion in federal dollars in 2013. 
     “The financial incentives do in fact dictate behavior,” Eugene Goldenberg, a research analyst for BB&T Capital Markets, told HuffPost. “It’s a lucrative business." 

Financial incentives can turn people into pigs.

    The profit motive must certainly account for the increasing number of  patients in nursing homes and assisted living who are served by for-profit hospices (this is ironic, since hospice was expressly created to allow people to die at home.) Employees in these institutions already provide considerable routine care — bathing, providing meals, changing linens -- but hospice gets paid just as much as if it were performing these tasks. And hospice staffers don’t have to travel as much as when they visit people in far-flung houses, the New York Times wrote earlier this year. Paradoxically, higher fees are paid for patients in institutions, with the exception of 24-hour at-home care, which is the most expensive.

    So whereas Hospice was formerly motivated to provide every little service it could dream up (manicures! foot massages!), it's now motivated to devote as few staff resources as possible and reap the payments as profit. 

Ah, Medicare -- how I love thee!

    The U.S. hospice industry has quadrupled in size since 2000. Nearly half of all Medicare patients who die now do so as a hospice patient -- twice as many as in 2000, government data indicate.
Since 2006, the U.S. government has accused nearly every major for-profit hospice company of billing fraud, according to the Huffington Post.
    In 1990, only 5 percent of hospices were for-profit operations. By 2013, they dominated the industry, representing 63 percent of hospices. Some 98 percent of hospices launched in the past 15 years have been for-profit.

    Hospice has been exhaustively investigated by several superb reporters over the years. I would not presume to improve upon their work, and there's no point in duplicating it. I particularly recommend two series:
    The Washington Post provided new insights in its August, 2014, article
    The Post provided greater depth in its December 2013 article, "Hospice Firms Draining Billions from Medicare":  (  

Billons of taxpayer dollars down the drain. So what else is new?

     Huffington Post reporter Ben Hallman’s  indispensable six-month investigation into the hospice industry has resulted in a disturbing exposé of fraud and abuses. Hallman’s  piece, How Dying Became A Multibillion-Dollar Industry, details these findings, the publication says (

  • Hospice companies with illegally-obtained hospital records, insufficient documentation and inadequate training for caretakers
  • More than 1,000 hospices haven't been inspected for more than seven years
  • Since 2006, the U.S. government accusing nearly every major, for-profit hospice company of billing fraud
  • Hospice employees being pressured into wrongfully enrolling patients and adjusting health records in order to obtain more government funding. Every day, hospice marketers descend on doctor’s offices, rehab centers and hospitals. These workers have been known to rifle through patient logs at nursing stations, scramble to sign up what some in the industry call “last gasp” patients — people with just hours left to live — and even scuffle with each other in hospital corridors over the right to sign up dying people, according to current and former hospice employees and allegations made in federal lawsuits.

    Hallman describes a former hospice sales manager in Atlanta, who confessed that he "cruised" nursing home lobbies and tried to pressure medical directors to refer directly to him. “It’s not even about patient care anymore; they’ve gone to the dark side,” he told Hallman. “It’s all about money.” 

"The Dark Side" by Leadensleeve

  According to Hallman, "The most-watched federal lawsuit, filed last May, accuses Vitas (the largest hospice provider in the country, with more than 80,000 patients a year) in unusually strong language of harming patients in the pursuit of profits through what the government characterized as "an extensive scheme." The suit, based on allegations brought by former Vitas employees in Texas, California and Illinois, contends the company “focused on maximizing Medicare reimbursement for as many patients as possible while disregarding patients’ medical needs.”

    In 2013, according to ABC News, Vitas Hospice Services and its parent company, Chemed Corp. of Cincinnati, were first accused of having "misspent tens of millions of taxpayer dollars from the Medicare program." according to a statement released by the Justice Department on May 2.

    In a complaint filed the same day in the District Court for the western district of Missouri, the government contends that since 2001 Vitas has defrauded Medicare two ways: It has accepted for hospice care patients not eligible to receive it, billing Medicare for their treatment; and it has charged Medicare for "crisis care" given to patients who didn't need it and/or never got it.

     Healthier patients require fewer visits and stay longer on care, meaning hospices can reap bigger financial rewards. An analysis by the Washington Post of California hospice data found that the proportion of patients who were discharged alive from the health service rose by about 50 percent between 2002 and 2012. Profit per patient quintupled to $1,975 in California, the newspaper reported.

Good for you -- now we can keep on billing.

     Of course, we all know that Medicare fraud and abuse are rampant. More and more, everything from physicians' practices to hospital operations to nursing homes, rehab centers, and drug and device-making firms are painstakingly set up to bleed Medicare for all it's worth. Entire companies and even industries are being developed expressly to profiteer from Medicare regulations and fee schedules.
    So in that context, it was slightly (but very slightly) refreshing for me to learn that some "little people" at Hospice for Utah were getting in on this boondoggle, instead of having all those precious tax dollars going to the Fat Cats, which founder Kit Jackson had become, and the One Percent. (Hospice for Utah is already characterized as "employee-owned" on its web site, but the staff still has "quite a way to go" before they will have full ownership.)
    "It won't be a $10 million dollar business for long," the Hospice for Utah aide told me. "We've got a battle plan that will put us all on easy street. 

They steer away from that hard road and turn a corner onto Easy Street.

     In one study after another, those who are enrolled in for-profit hospices are shown to receive a full range of services about half as often as those in nonprofits. "For profit hospices obviously skimp on services," one published paper noted.
        Now, the fat-cat hedge fund companies have moved in, turning "comfort care" into a commodity that can be downgraded and slashed, just as they do with bottles of shampoo, cans of coffee, and bags of chips.

If you're a fat cat, your fatness is a badge of honor. Eat it up!

     In 2010, Gentiva Home Health paid $1 billion to purchase Odyssey Healthcare. It was the largest hospice acquisition in U.S. history, according to the company.
    Josh Perry, a professor of business law and ethics at Indiana University who focuses on health care observes:  “These companies have large fiduciary responsibilities to investors and shareholders. All of that is potentially in conflict with the best interests of the patient, and the best interests of taxpayers.” 
    Despite this conflict, I believe the use of hospice services will continue to grow. They've become pretty routine already. Even if the care provided is not as promised, it's better than nothing. And, it's "free."
    Here are a few representative examples of major hospice fraud:

    According to a January 2014 Chicago Tribune article, the administrator and part owner of Passages Hospice LLC,  orchestrated an extensive scheme to fraudulently bill Medicare and Medicaid for millions of dollars by falsifying the level of hospice care provided for patients at nursing homes he controlled throughout the state. According to the charges, Gillman trained nurses to look for signs that allegedly would qualify a hospice patient for general inpatient care, resulting in payments per day more than four times higher than routine care rates. In many instances, patients were not terminally ill and wound up enrolled in hospice care far longer than the required life expectancy of six months or less.
The charges alleged Gillman kept his network of regional directors in line by paying them fat bonuses based on the amount of general inpatient care they oversaw. Gillman also paid himself bonuses of more than $830,000, prosecutors alleged. One nurse, who worked in a nursing home in downstate Belleville, told authorities her superiors explained to her that putting patients in unnecessary care was “how we get paid.” The nurse said she was told by one supervisor to “stop the Mary Poppins charting” and learn how to fake the paperwork. As a result, the nurse said she changed the charts for several patients, including falsely claiming that two patients had been injured as a result of falls, according to the charges. In one case, Passages falsely billed Medicare for more than four years of hospice care for a patient identified as “LJ” at a cost of $192,000, according to the criminal complaint. The patient’s son told investigators that his mother appeared in no danger of dying until the last month of her life, according to prosecutors.

Earlier this year, a Pennsylvania hospice provider was sentenced to 176 months in prison and ordered to pay $16.2 million in restitution and $16.2 million in a forfeiture money judgment for executing a Medicare fraud scheme, the U.S. Department of Justice announced. Matthew Kolodesh, owner of Home Care Hospice, Inc. (HCH), filed about $16.2 million in false claims for patients ineligible for hospice benefits and people who never received the level of care billed, the DOJ noted. Kolodesh used $7.77 million dollars in business funds for personal gain, setting up his spouse as a fake CEO who collected unearned salary and bonuses, the announcement stated.

AseraCare Hospice submitted “false and fraudulent” claims for payment to the U.S. and misspent millions of dollars in Medicare money meant for the care of terminally ill patients, Bloomberg News reported in 2012.  The Justice Department  joined a whistle- blower case against AseraCare in federal court in Birmingham, Alabama, accusing the closely held company of seeking to cheat Medicare for the hospice care of patients who weren’t terminally ill.  AseraCare, based in Fort Smith, Arkansas, runs 65 hospice centers in 19 states, according to the lawsuit. It is owned by Fort Smith-based Golden Living, one of the largest nursing home chains in the U.S. Golden Living used to be called Beverly Enterprises, before it was purchased in 2006 by the private equity firm Fillmore Capital Partners of San Francisco.




Vultures, great post

God, this BUSINESS of making profits off of sick and dying people is disgusting to me. Great post, seems to be everywhere and most people have no idea on what is going on or how to fight it, esp. around death, people are too grief stricken.

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