Hospice industry gets reprieve as Trump admin pauses oversight program
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A federal effort to increase oversight of hospice care has been put on hold by the Trump administration, resetting efforts to root out fraud and abuse in an industry that receives more than $25 billion from Medicare annually.
Why it matters: Federal officials in recent years have ramped up efforts to identify instances in which hospice operators fraudulently bill the government or enroll patients who aren't terminally ill. But the new administration last month halted a Biden-era plan for noncompliant hospices to take corrective action or risk being kicked out of Medicare.
The big picture: Medicare is required by law to implement some version of the targeted oversight program. But it's not clear how that will evolve in President Trump's second term. The Centers for Medicare and Medicaid Services did not respond to a request for comment.
- The pause amounts to a win for the hospice industry, which said the original Biden CMS plan would penalize well-meaning operators without identifying underperforming ones.
- "What's hoped and expected at this point is the ability to refine the model," said Bill Dombi, who retired as president of the National Association for Home Care & Hospice last year.
- "My own forecast for the future says hospice is absolutely at a high category of interest for purposes of oversight," he said.
Flashback: Congress in 2020 passed a law requiring CMS to create a program to boost oversight of underperforming hospices, including more reporting and monetary penalties for wrongdoing. It came in response to a pair of federal reports that found systemic issues were allowing poor-quality Medicare hospices to slip through the cracks.
- CMS finalized a methodology for identifying underperforming hospices in 2023 and released the first list of hospices it would target for corrective action late last year.
- Industry leaders supported the idea but took issue with the algorithm CMS planned to use to identify which hospices should get increased oversight. Lawmakers introduced a bipartisan bill in November to delay implementation of the program to give time for revisions.
- "What was actually proposed by CMS … is a program that looked like it was penalizing rather than rehabilitating these providers," said Scott Levy, chief government affairs officer of the National Alliance for Care at Home, a trade group representing hospice organizations.
- "There were certain providers that we know that should be the target of a lot of activity at CMS that were falling completely [outside] of the special focus program," he added.
The industry is hoping regulators will now give more weight to their concerns and suggestions for how the targeted oversight program should work.
- A coalition of organizations that represent hospice providers has created a list of 34 program integrity recommendations, including requiring background checks for hospice administrators and more frequent surveys for new hospices.
- More surveys are needed in general, Dombi said.
- "There are still many hospices that have not been fully surveyed in quite some time, so that needs to be done [to] bring them into the database," he told Axios.
Reality check: Patient advocates worry that workforce reductions at CMS since the Trump administration took office will make it harder to improve hospice oversight.
- "Our deepest concern right now is that personnel and financial cuts at CMS will complicate the agency's efforts to implement the hospice special focus program and also to adequately carry out its important oversight role," Wey-Wey Kwok, senior attorney at the Center for Medicare Advocacy, told Axios.
What we're watching: Hospice trade associations from Texas, Indiana, North Carolina and South Carolina, along with a Houston hospice chosen for the oversight program, sued the federal government in January over its implementation of the oversight regime.
- That lawsuit is still ongoing. The final rule that lays out the methodology for the oversight program hasn't been rescinded.
- "To be sure, there is a real problem with a subset of hospice programs that provide poor care or operate unethically," the complaint reads.
- But the finalized methodology for identifying hospices for the program "skews the results towards larger, established providers and away from smaller or new providers."
Zoom out: The special focus program is just one policy officials have set into motion in the past couple of years to tackle different types of fraud in hospice. Medicare in 2023 boosted scrutiny of new providers opening their doors in Arizona, California, Nevada and Texas.
- Regulators were prompted in part by an investigation by ProPublica and the New Yorker that found these states were overrun by for-profit hospices, some of which were billing for nonexistent patients or had obtained licenses just to sell them to other entrepreneurs.
