Red flags in hospice care: Protecting patients — and medical practices — from fraud

Hospice is one of Medicare’s most meaningful benefits. When delivered with integrity, it relieves suffering, supports families and allows patients to spend their final days with dignity.

But recent federal investigations have revealed cases that should concern every primary care physician. In one U.S. Department of Health and Human Services Office of Inspector General (OIG) review, a 101-year-old man with dementia spent 16 days in general inpatient hospice care with uncontrolled pain before his medication was adjusted. In another case, a hospice billed Medicare for 17 days of care for a patient it never actually visited.

These examples are not the norm, but they are real. And they raise an uncomfortable question: How can physicians be confident that the hospice providers they refer to consistently deliver ethical, high-quality care?

Why has hospice fraud become such a visible issue now — and why should primary care physicians be paying attention?

Several structural factors are converging.

First, hospice is a growing market. The number of Medicare decedents using hospice has increased in recent years, and overall spending on the benefit continues to rise. As hospice becomes a larger segment of Medicare, it inevitably attracts new entrants, including some motivated purely by financial opportunity rather than virtuous mission.

Second, the core hospice payment structure and oversight framework have remained largely unchanged for decades. Hospice is paid on a per diem basis, and regulatory oversight is periodic rather than continuous. That combination — predictable daily payments and episodic review — creates vulnerabilities that sophisticated bad actors can exploit.

Third, some fraudulent operators are well capitalized. They may have access to deeper financial backing than smaller, mission-driven community hospices. In certain markets, that imbalance can crowd out high-quality providers who lack the resources to compete aggressively for admissions.

None of this means that hospice as a benefit is flawed. When delivered properly, hospice is one of the most compassionate and cost-effective services in Medicare. But growth, static oversight structures and uneven market incentives have created conditions where fraud can flourish if it is not addressed.

Primary care physicians should pay attention because referrals are the entry point. Understanding these dynamics helps physicians ask better questions and protect patients in a changing market.

Has hospice care changed structurally in recent years?

Yes — both supply and utilization have grown.

The number of Medicare-certified hospice providers increased nearly 40% between 2019 and 2024. During that same period, hospice use among Medicare decedents also rose. In 2018, approximately 1.16 million Medicare decedents used hospice, representing 50.7% of Medicare beneficiaries who died that year. By 2024, that figure increased to 1.3 million decedents, or 53.1%.

Growth in hospice access can reflect positive trends — earlier conversations about goals of care and broader awareness of hospice benefits. At the same time, rapid provider expansion in certain markets warrants careful attention, particularly when growth in the number of providers outpaces the growth in eligible patients.

Historically, hospice was largely hyperlocal, with referrals flowing through established physician and hospital relationships. In some markets today, the significant increase in providers, including newer entrants, has altered referral dynamics. Fraudulent or low-performing hospices often seek admissions proactively through facilities such as skilled nursing facilities or long-term care centers rather than through long-standing physician referral channels.

How does hospice fraud intersect with primary care practice?

Primary care physicians are central to conversations about serious illness. Patients and families assume a hospice referral carries implicit trust.

When a hospice enrolls ineligible patients, fails to deliver appropriate levels of care or prioritizes billing over interdisciplinary services, families often do not distinguish between the hospice and the referring clinician. The resulting distress may rebound toward the physician who recommended the service.

Fraud in hospice is not merely a regulatory issue. It is a continuity-of-care issue.

What red flags should physicians watch for?

Fraud is not always obvious, but several warning signs have appeared repeatedly in enforcement cases:

• Pressure to enroll patients who may not meet eligibility criteria
• Limited transparency around care plans and interdisciplinary services
• Excessively long lengths of stay without clinical rationale
• Billing patterns dominated by routine home care with little use of general inpatient or continuous care, even for complex patients
• Poor communication or resistance to collaboration with existing clinicians

The OIG report cited earlier found that hundreds of hospices billed only for routine home care, raising concerns about whether higher levels of care were appropriately delivered when needed.

Did the COVID-19 pandemic lead to major hospice policy changes?

The pandemic did introduce important operational flexibility. CMS permitted hospice physicians and nurse practitioners to conduct required face-to-face recertification encounters via two-way audio-video telehealth technology rather than exclusively in person.

This flexibility expanded access and reduced infection risk. However, it did not change hospice eligibility standards or interdisciplinary care requirements. Hospice remains a hands-on benefit.

COVID-19 did not create hospice fraud, but rapid operational shifts across health care may have exposed vulnerabilities that bad actors exploited.

Why haven’t existing oversight mechanisms been sufficient?

Licensure and survey processes are episodic. Claims reviews are retrospective. Directories identify who exists, not how they perform.

Hospice quality is dynamic, so oversight occurring every few years may not detect developing performance issues in real time. Meanwhile, high-quality hospices struggle to differentiate themselves from poor performers.

Enhanced regulatory scrutiny is important. Sustainable improvement, however, likely requires greater transparency and more continuous visibility into performance.

What risks do physicians face if they unknowingly refer into problematic hospice arrangements?

Most physicians making isolated, good-faith referrals are not personally exposed to enforcement risk. However, repeated referral patterns — particularly after concerns surface — can create compliance questions.

Reputational harm may be more immediate. Families who experience poor hospice care rarely separate that experience from the physician who recommended it.

In short: Protecting patients protects physicians and their practices.

What practical steps can primary care physicians take now?

Physicians do not need to conduct investigations. But they can do the following:

• Ask hospice partners about eligibility verification processes
• Understand how symptom crises are managed and when general inpatient care is used
• Request clarity on visit frequency and interdisciplinary involvement
• Encourage transparency in reporting and communication

Patient choice remains fundamental, and informed choice requires visibility into quality.

Hospice, when delivered with integrity, is one of the most compassionate services in American health care. Fraud not only drains public dollars — it undermines trust in a benefit that works when done well.

Primary care physicians are uniquely positioned to safeguard that trust by asking questions, seeking transparency and ensuring that referrals reflect the same standards they uphold in their own practices.

Robin Heffernan, Ph.D., is co-founder and CEO of Empassion Health, a national organization focused on improving quality, transparency and accountability in serious illness and hospice care.