Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio

08/13/18 at 07:00 AM by Cordt Kassner

Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity: An OIG Portfolio



OIG is committed to ensuring that beneficiaries receive quality care and to safeguarding the hospice benefit. OIG has produced numerous evaluations and audits of the hospice program, including in-depth looks at specific levels of care and settings. OIG has also conducted criminal and civil investigations of hospice providers, leading to the conviction of individuals, monetary penalties, and civil False Claims Act settlements. Through this extensive work, OIG has identified vulnerabilities in the program. This portfolio highlights key vulnerabilities and presents recommendations for protecting beneficiaries and improving the program.


The portfolio synthesizes OIG's body of work on the Medicare hospice benefit. It covers hospice care since 2005 and describes the growth in hospice utilization and reimbursement. The portfolio also summarizes key vulnerabilities that OIG has identified and continues to monitor.


Hospice care can provide great comfort to beneficiaries and their families and caregivers at the end of a beneficiary's life. Hospice use has grown steadily over the past decade, with Medicare paying $16.7 billion for this care in 2016. It is an increasingly important benefit for the Medicare population; 1.4 million beneficiaries received hospice care in 2016.

However, OIG has identified vulnerabilities in the program. OIG found that hospices do not always provide needed services to beneficiaries and sometimes provide poor quality care. In some cases, hospices were not able to effectively manage symptoms or medications, leaving beneficiaries in unnecessary pain for many days.

OIG also found that beneficiaries and their families and caregivers do not receive crucial information to make informed decisions about their care. Further, hospices' inappropriate billing costs Medicare hundreds of millions of dollars. This includes billing for an expensive level of care when the beneficiary does not need it. Also, a number of fraud schemes in hospice care negatively affect beneficiaries and the program. Some fraud schemes involve enrolling beneficiaries who are not eligible for hospice care, while other schemes involve billing for services never provided.

Lastly, the current payment system creates incentives for hospices to minimize their services and seek beneficiaries who have uncomplicated needs. A hospice is paid for every day a beneficiary is in its care, regardless of the quantity or quality of services provided on that day. While CMS made some changes to payments, the underlying structure of the payment system remains unchanged.


We recommend that CMS implement 15 specific actions that relate to 7 areas for improvement. CMS should strengthen the survey process-its primary tool to promote compliance-to better ensure that hospices provide beneficiaries with needed services and quality care. CMS should also seek statutory authority to establish additional remedies for hospices with poor performance. Also, CMS should develop and disseminate additional information on hospices, including complaint investigations, to help beneficiaries and their families and caregivers make informed choices about hospice care. CMS should educate beneficiaries and their families and caregivers about the hospice benefit, working with its partners to make available consumer-friendly information. CMS should promote physician involvement and accountability to ensure that beneficiaries get appropriate care.

To reduce inappropriate billing, CMS should strengthen oversight of hospices. This includes analyzing claims data to identify hospices that engage in practices that raise concerns. Lastly, CMS should take steps to tie payment to beneficiary care needs and quality of care to ensure that services rendered adequately serve beneficiaries' needs, seeking statutory authority if necessary.

In our draft report to CMS, we recommended 16 specific actions. CMS concurred with six recommendations, did not concur with nine, and neither concurred nor nonconcurred with one. We considered CMS's comments carefully, and we clarified and combined two of our recommendations. We remain committed to our recommendations and will continue to work with CMS to promote their implementation.

Copies can also be obtained by contacting the Office of Public Affairs at

Download the complete report.

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