The number of hospice providers enrolled in the Medicare program in four states has rapidly increased in recent years. The alarming surge has prompted increased surveillance efforts, some of which may not be having the desired effect.
A similar trend may be occurring in home health care in one major county, according to data from the U.S. Centers for Medicare and Medicaid Services (CMS).
For hospices, the surge in new providers and potential fraud is concentrated in Arizona, California, Nevada, and Texas. Los Angeles County for home health care.
Recognizing the data regarding new hospice openings and following a series of scathing media reports, CMS will implement the Special Focus Program (SFP) starting January 1st and require majority ownership changes for 36 months thereafter. We have finalized a new rule banning this. Initial Medicare enrollment, including acquisitions, stock transactions, and mergers.
In August, the agency announced it was considering administrative action against an additional 400 hospices.
“Unfortunately, in too many cases, hospices profit from fraud at the expense of their beneficiaries,” CMS said at the time.
Meanwhile, some of the aforementioned states are also pushing for stronger rules and regulations. California, for example, passed two reform laws in 2021 that include suspending the licensing of new hospice providers until the state health department weeds out the bad actors.
A California Department of Justice (CDOJ) report detailing the state’s history of lax oversight helped spur the effort.
“Weak state controls create opportunities for large-scale fraud and abuse,” the CDOJ said in its report.
back in the spotlight
Hospice fraud and related surveillance activities were brought back to the spotlight last week when ProPublica reported that a new hospice in California remains Medicare certified and that clear fraud is occurring in other states. collected.
In one example last year, 15 new hospices became Medicare certified, all operating out of the same two-story building in Los Angeles, according to ProPublica.
In another article, three new hospice licenses were approved for a Phoenix location, all in the same location as dozens of other new providers in the past two years.
California had 102 new hospices enrolled in 2023, according to a review of Medicare claims data shared by Home Health Care News and Hospice News. Arizona increased the number of new hospices by 25 during the same period, and Texas and Nevada added 72 hospices. 25 new providers each.
Overall, no other state experienced an influx of more than 15 new hospices, and most reported single-digit enrollment.
In total, approximately 69% of newly licensed hospices in 2023 were located in Arizona, California, Nevada, and Texas.
This review was conducted by industry experts familiar with Medicare claims data. The source also told HHCN and Hospice News that multiple new hospices had been registered in California since the time ProPublica compiled the story.
Industry organizations such as the National Hospice and Palliative Care Organization (NHPCO) are paying attention.
“While CMS has implemented many of its program integrity recommendations to root out bad actors, the data shows that more needs to be done and that the Hospice Special Focus Program is improving fraud prevention. It became clear that it was not the right tool,” said Ben Marcantonio of NHPCO. The COO and interim CEO told Hospice News in an email last week.
Home medical care connections
The numbers suggest something similar may be happening in the home health care industry, primarily in Los Angeles County.
And if that is indeed the case, it calls into question how CMS and the Medicare Payment Advisory Commission (MedPAC) evaluate the overall home health care market in terms of size and beneficiary access to care. .
From the beginning of 2019 to June 2023, the number of home health agencies providing services decreased from 8,838 to 8,280, shrinking the market by approximately 6%. However, during this same period, the number of home health agencies serving Los Angeles County increased from 896 to 1,309, an increase of approximately 46%.
Excluding growth in Los Angeles County, the number of home health agencies serving the United States has declined by 12% over that nearly five-year period.
Los Angeles County also has a confusing situation when it comes to access to home health care. In Los Angeles County, home health care utilization has decreased by 16% since 2019, according to data sources that spoke to HHCN and Hospice News.
It is important to note that this number of 8,838 is for the home health agencies that are actually filing the claims. There are more than 11,500 actively registered home health agencies, but some offer no services at all.
timely discussion
L.A. County’s home health statistics could mean fraud, waste, and abuse are occurring in that market, similar to what is happening in hospices across Arizona, California, Nevada, and Texas. There is sex.
But more directly, the data tells a less rosy story than the one from Medicare officials, and the timing surrounding these two views could not be more significant.
As the health care situation stabilizes from the COVID-19 pandemic, CMS has sought to recalibrate the patient-driven group model (PDGM), the payment mechanism for home health agencies. The PDGM, which took effect at the beginning of 2020, is supposed to be budget neutral, meaning it cannot allocate more or less funding to home care than the previous payment model.
Broadly speaking, CMS believes that PDGM is overpaying home health agencies, which led the agency to make adjustments and cuts in 2023 and 2024. The home health industry disagrees with that view, but also argues that further cuts would threaten Medicare recipients’ ability to receive care. .
Home health agency denial rates reached an all-time high of 76% on average in December 2022, according to industry data. This is an increase from a rejection rate of approximately 54% in 2019.
CMS pushed back on the idea that access to health care was at risk.
“CMS has closely examined our data to ensure that payment rates adequately cover reported costs. [home health agencies]“Ensure that all beneficiaries maintain access to quality services without creating unnecessary hardship for providers,” CMS wrote in the 2024 final rule. “Maintaining access is one of CMS’ policy priorities.”
According to HHCN sources, payments to home health agencies in Los Angeles County in 2021 amounted to $1.2 billion, representing 7% of the nation’s fee-for-service spending, while traditional Medicare enrollees living in Los Angeles County This is despite being only 2% of the total population. .
Furthermore, when looking at L.A. County, the spending per traditional Medicare enrollee in L.A. County was $1,577, compared to $449 nationally. Los Angeles County will increase spending per beneficiary for traditional Medicare enrollees by 5%.
If Los Angeles County distorts how the collective home health market is valued, it could have significant repercussions for years to come.
