healthy4u: Harden Healthcare

In the US, we have been engaged in an experiment involving handing over an ever increasing proportion of direct patient care to for-profit corporations, and non-profit organizations that act increasingly like for-profit corporations (as opposed to mission oriented non-profit organizations or individual health care professionals).  The results have been particularly striking for the care of one of the most vulnerable patient groups, the chronically ill.  Over the last months, a number of stories about the hospices enrolling patients who are not terminally ill have accumulated.  Keep in mind that hospices are supposed to provide compassionate palliative care to the terminally ill.  While they are supposed to make such patients as comfortable and free of pain as is possible, they are not supposed to otherwise aggressively treat other medical problems (based on the assumption that such treatment would benefit dying patients.)  However, such treatments could benefit, or even save the life of patients who are not dying.  (See posts <a href="http://hcrenewal.blogspot.com/2012/03/gentivas-odyssey-healthcare-settles.html">here</a> and <a href="http://hcrenewal.blogspot.com/2011/07/prepare-them-to-die-for-profit-hospices.html">here</a>.) Hospice of the Bluegrass Back in March, there was very brief <a href="http://www.kentucky.com/2012/03/27/2128086/hospice-of-the-bluegrass-agrees.html">report</a> on Kentucky.com that the non-profit Hospice of the Bluegrass "agreed to pay the federal government $685,000 for submitting claims to Medicare to receive reimbursements for services it provided patients who did not qualify for Medicare services,..."  Note that the main requirement for Medicare payments for hospice services is that the patients receiving these services have no more than six months of survival expected. However, then in June a detailed <a href="http://www.kentucky.com/2012/06/23/2235773/hospice-of-the-bluegrass-does.html">investigative report </a>also on Kentucky.com recounted numerous conflicts of interest affecting that hospice's board, <blockquote>The non-profit Hospice of the Bluegrass has spent more than $1.82 million since 2005 on business deals with several of its board members and the spouses of its executives.</blockquote> In particular, <blockquote>On its tax returns from 2005 to 2010, Hospice reported paying at least: ■ $540,178 for political lobbying and legal representation to the law firm of McBrayer, McGinnis, Leslie & Kirkland. One of the firm's partners and co-owners, Lisa English Hinkle, was a Hospice board member and a former board chairwoman. Hinkle rotated off the board at the end of 2011. She was preceded on the board by another partner in the firm, James Frazier. ■ $837,999 for insurance to the firm of Powell-Walton-Milward, whose managing director, John Milward, is a Hospice board member. His brother Greg Milward, who also works at the insurance firm, previously was on the Hospice board and was board chairman in 2007. ■ $392,042 for printing to Pat Byrne Printing, owned by the husband of Deede Byrne, Hospice's chief clinical officer. ■ $22,506 for heating and air conditioning to Gary Merckle, husband of Carol Ruggles, Hospice's chief financial officer. ■ $28,577 for advertising to the Lexington Herald-Leader while then-editor Marilyn Thompson sat on the board.</blockquote> The article also noted that the hospice CEO seems very well-paid given the context, <blockquote>CEO Gretchen Marcum Brown, whose 2010 compensation was $238,650 in base pay, $10,570 in bonus pay and $84,978 in other reportable compensation. The other compensation included Hospice's payment into Brown's deferred-compensation account, from which she can draw in the future. Hospice also paid for a membership in Brown's name at The Club at Spindletop Hall, which offers swimming, tennis and dining.</blockquote>Such a pay package may provide incentives to maximize revenue by maximizing enrollment, regardless of whether enrolled patients really should be in hospice. Hospice Family Care As<a href="http://www.bizjournals.com/phoenix/news/2012/05/31/hospice-family-care-sold-after-37m.html"> reported</a> by the Phoenix Business Journal in May, <blockquote>Hospice Family Care Inc. has agreed to pay the federal government $3.7 million to settle civil allegations that the Mesa-based company violated the False Claims Act by submitting false bills to Medicare.</blockquote> Also, <blockquote>The U.S. Attorney’s Office had alleged that Hospice Family Care submitted claims for payment to Medicare for patients who were either completely or partially ineligible for hospice,...</blockquote> So this settlement is partly for charges that the hospice enrolled patients who were not terminally ill. Note that in this particular case, the government made an effort to punish the owners of the company, who found a way to evade such punishment: <blockquote>However, on the day the U.S. Attorney’s Office announced that settlement, Hospice Family Care’s owners closed on a deal to sell the company.</blockquote> So, <blockquote>Neither the company’s attorney, Frederick Petti, nor government officials would disclose the name of the buyer. “Unfortunately, I can’t provide that information because it’s not in the public domain,” said Assistant U.S. Attorney Bill Solomon. The company’s co-owners, Nancy Smith and Nancy Turner, deferred all comments to Petti. 'Believe me, if my clients weren’t in the process of selling this company, we would have fought this to the bitter end,' Petti said. 'We would have prevailed. This is a business decision.' He emphasized that the settlement agreement was not an admission of guilt. Smith and Turner agreed to be excluded from Medicare and Medicaid and all other federal health care programs for seven years, effective immediately. However, Petti said the company’s new owners will not be affected by that settlement agreement and will be free to accept reimbursement from government payers.</blockquote>Such maneuvers obviously reduce any deterrent effect of settlements like this on bad behavior, and particularly on the behavior of enrolling patients who are not terminally ill in hospice. Harden Healthcare Then in June the Wichita (Kansas) Eagle <a href="http://www.kansas.com/2012/06/21/2382557/whistleblower-suit-leads-to-61.html">reported</a>, <blockquote>A Kansas hospice care provider and its Texas-based parent company will pay $6.1 million to resolve allegations that they submitted false claims to the federal Medicare program. The case arose from a whistleblower lawsuit filed by a nurse more than six years ago, the U.S. Justice Department said Thursday. Justice officials said in a news release that they hope the settlement with Wichita-based Hospice Care of Kansas LLC and Fort Worth-based Voyager HospiceCare Inc. will serve as a warning to other hospice providers. Prosecutors alleged the companies submitted false claims to the federal health care program for the elderly and disabled between 2004 and 2008 for patients who weren’t expected to die in less than six months, a requirement for the benefits in question.</blockquote> Note that this report makes very explicit the allegation that the hospice was enrolling patients who were not terminally ill. Further note that while the beginning of the report makes it appear that the company that owns the hospice is regional, it actually is larger <blockquote>The agreement includes no admission or determination of wrongdoing, Harden Healthcare, the owner of Voyager HospiceCare and Hospice of Kansas, said in a statement.</blockquote> Harden Healthcare, <a href="http://www.bizjournals.com/austin/news/2012/05/25/harden-healthcare-tops-private-firms.html">according to </a>the Austin (Texas) Business Journal, is the largest private employer in that city, with over 3800 employees and revenues of over $810 million. Hospice of the Comforter The Orlando Sentinel reported in late August, <blockquote>The federal government is taking over a whistleblower lawsuit against the Altamonte Springs-based Hospice of the Comforter — a suit that alleges the nonprofit routinely over-billed Medicare for patients who didn't qualify as terminally ill, sometimes keeping them in hospice care for as long as five years.</blockquote> These are allegations of course, but it turns out that both sides of the action agree on certain facts of interest, <blockquote>Both sides agree that Hospice of the Comforter officials discharged a large number of Medicare patients after the federal government began scrutinizing the ballooning number of hospice patients nationwide. In fact, Stone said, the initial sampling by government auditors showed Hospice of the Comforter had an error rate of 18 percent, just slightly over the 15-percent rate the government allowed and therefore triggering a second, more intense review. That phase, in January 2010, revealed a troubling 77 percent denial rate, Stone said — meaning that Medicare officials believed the hospice was improperly billing the government in 77 percent of the cases it reviewed. According to the government, hospice care should be limited to patients certified by a hospice physician as having six months or less to live. Meanwhile, though, an internal hospice committee did its own review of patients, discharging more than 133 of them and noting they were, 'no longer terminally ill,' the lawsuit states. Some had been designated 'FOB' for 'Friends of Bob [Wilson, the CEO of the hopsice],' and Wilson later insisted some be readmitted and their care billed to Medicare, the lawsuit says.</blockquote> Let me just note that for someone truly terminally ill, the way to become no longer terminally ill is to die. A <a href="http://articles.orlandosentinel.com/2012-09-08/news/os-scott-maxwell-hospice-adventist-medicare-fraud--20120908_1_medicare-fraud-settlement-adventist-hospitals-health-care-fraud">column</a> in the Orlando Sentinel suggested that the hospice CEO had a strong personal incentive to enroll patients who were not terminally ill, <blockquote>there are facts not in dispute — such as Wilson's financial incentive to keep his patient counts high: bonuses of $50,000 every three months on top of his base salary of $120,000.</blockquote>Again, maintaining lucrative compensation could be an inducement for hospice executives to sanction enrollment of patients who were not really terminally ill. Summary Hospices arose to provide compassionate care for among the most vulnerable of patients, the terminally ill.  Hospices began as mission oriented non-profit organizations, often affiliated with hospitals or religious groups.  However, the generous payments for hospice care provided by Medicare and commercial insurance, and the increasingly laissez faire supposedly "market-based" health care context lead to the growth of for-profit hospices, and the emulation of their management by ostensibly non-profit organizations.  <a href="http://articles.orlandosentinel.com/2012-09-08/news/os-scott-maxwell-hospice-adventist-medicare-fraud--20120908_1_medicare-fraud-settlement-adventist-hospitals-health-care-fraud">In the Orlando Sentinel</a>, Scott Maxwell used the example of the Hospice of the Comforter to assert <blockquote>you've been duped when it comes to waste, fraud and abuse in America's health-care system. Politicians love to rant about it. They often do so when explaining why they're about to cut your benefits. They're right that fraud happens. But the individual scammers they portray as the problem are nothing compared to the systemic white-collar fraud perpetrated by corporations — and, yes, faith-based nonprofits. This is America's dirty little health-care secret. We all know health-care costs are soaring. But we have done little to address the organized fleecing — often because the fleecers are either campaign donors or nonprofits wrapped in a cloak of altruism. In this country, you can go to prison for stealing a TV. But if companies get caught stealing millions from taxpayers, the fines are simply viewed as the cost of doing business.</blockquote> We have made similar assertions about systemic misbehavior in the US health care system, and how failure of local through national government to impose any penalties on the individuals who authorize, direct or implement bad behavior just allow the problem to get worse. However, the consequences of increasing hospice enrollment (hence short-term revenue, and hence the compensation of top hospice executives) by enrolling patients who are not terminally ill go well beyond just increasing health care costs. As we have <a href="http://hcrenewal.blogspot.com/2012/03/gentivas-odyssey-healthcare-settles.html">said before</a>, enrolling patients into hospice who are not already really doomed to die soon denies them the possibility of treatment for new acute illnesses and worsening of chronic illnesses, which then could hasten their deaths. (Pretending those patients were terminally ill could have fooled their relatives into thinking those deaths were inevitable, instead of results of bad practice and potentially fraud.) So the pattern of fraud now increasingly documented to be taking place in for-profit and even non-profit hospices is particularly reprehensible. It preys on vulnerable patients, and may cost some patients their lives who otherwise might have lived for a long time. This is a prime example of what goes wrong when our main health care policy seems to be based on letting the good times roll. I hope that the realization that enrollment of patients who are not terminally ill into hospices can result in their untimely death may lead to some reconsideration of our experiment in lightly regulated, "market based" health care. Those who directly care for patients ought to be motivated by professional values, not short-term revenue.

More Hospices Pretending Patients are Terminally Ill

In the US, we have been engaged in an experiment involving handing over an ever increasing proportion of direct patient care to for-profit c...

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