Ripping Off Medicare

November 23, 2011
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If this were a novel, it would require too much suspension of disbelief. From Kaiser Health News:

If this were a novel, it would require too much suspension of disbelief. From Kaiser Health News:

Here’s how the complaint alleges the arrangement worked: Since Medicare Advantage pays HMOs monthly per-patient fees, the HMOs had a financial incentive to avoid chronically ill patients, who need lots of treatments. So the HMOs referred many of their chronically ill patients for hospice care at Vitas [a hospice], which accepted them even though their conditions weren’t considered terminal.

Although expensive for the HMOs, these patients made money for Vitas, the complaint alleges. That’s because Medicare reimburses a hospice with a flat fee for each day a patient is enrolled. Long-stay hospice patients tend to be more profitable since the big costs in hospice care come when patients first enter the program and need to be evaluated and at the end, when they are dying and require more care, according to the Medicare Payment Advisory Commission, a congressional agency that has faulted Medicare’s payment formula.

On top of that, the lawsuit claims that when the health of Vitas patients required expensive hospital services, the company kicked them out of the hospice program “in order to shift the high costs of hospital procedures and prescription medications” away from the hospice and onto Medicare’s traditional fee-for-service program.