Waste of the Day: Hospice Without a Hospital

Topline: Medicare paid an estimated $255.1 million in claims for hospice patients who either did not have a documented terminal illness or never signed a statement electing to receive hospice care, according to a recent audit by the Department of Health and Human Services’ inspector general.

Hospice patients who never went to a hospital

Key facts: The report focused on patients who were supposedly admitted to hospice in 2021 even though they had not visited a hospital in the preceding 18 months. Such an occurrence is unusual, but the payments had not been flagged by Medicare contractors for signs of potential fraud until now.

Auditors found issues with 45 of 100 claims selected at random. Twenty-one patients had no record of being diagnosed with a terminal illness. Twenty-four patients never signed a required statement acknowledging their decision to be admitted to hospice, or never had a representative sign it for them.

Medicare covers hospice stays for patients with a life expectancy of six months or less. Each of the 45 patients were still alive six months after being admitted.

The 45 patients cost Medicare $545,499, a figure auditors used to estimate that $255.1 million of errors were made among the 125,329 hospice claims paid in 2021.

None of the payments were confirmed as fraud. Many of the patients may have had legitimate terminal illnesses that were not documented due to paperwork errors. But under federal regulation, the payments should not have been made without further investigation.

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Improper payments nothing new

Background: Medicare and Medicaid have long been the government’s largest source of “improper payments” — those made to the wrong person, for the wrong reason, or in the wrong amount.

The two programs alone were responsible for $96.1 billion of the government’s $186 billion of improper payments in fiscal year 2025.

California Attorney General Rob Bonta announced charges this April against 21 people suspected of stealing $267 million through hospice fraud. The number of hospice agencies in Los Angeles County has increased by 1,500% in the last decade, and evidence suggests many doctors have had their identities stolen, according to CalMatters.

Summary: Medicare has been a known hotbed of fraud for years, but recent federal audits suggest the issue may be even more widespread than previously believed.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.