Auditor blasts California oversight of hospice industry

California's “weak” oversight of the hospice care industry has “enabled” rampant fraud and abuse that has cost the state and the federal Medicare program millions of dollars while endangering extremely vulnerable patients, according to a scathing report last week from Acting State Auditor Michael Tilden.

The audit found that over the past 11 years, California saw a staggering 400% increase in hospice providers — which generally serve very sick patients with a life expectancy of six months or less — even though the need for such care only increased 40%. Los Angeles County notched a 1,600% boom in hospice care providers, with more than 150 licensed businesses registered in a single Van Nuys building — a number beyond its physical capacity. Other key takeaways:

• 94% of California's 2,836 hospice care providers are for-profit — the highest percentage in the country and a stark change from 2007, when nonprofits ran the vast majority of the state's hospice care.

• Hospice patients have been discharged at “abnormally high rates,” meaning providers may be enrolling ineligible patients to make money. Los Angeles County providers in 2019 likely overbilled Medicare by an estimated $105 million and Medi-cal — the state's health care program for the poor — by at least $3.1 million.

• The state Department of Public Health's “perfunctory” licensing process “does little to verify that personnel are qualified or prevent fraud.” Indeed, investigators found evidence that some providers appeared to use “stolen identities” of medical personnel to obtain licenses. (The Department of Public Health has also been blasted for lackluster oversight of nursing home licensing, as Calmatters' Jocelyn Wiener has reported.)

• State Sen. Ben Allen, a Santa Monica Democrat who called for the audit, told Ana that lawmakers should extend a moratorium, set to expire in a year, on licenses for new hospice care businesses unless they can demonstrate a significant need for such services in their area.

• The public health department told Ana that it “has already begun to operationalize several of the recommendations made in the audit,” though it said many other reforms will require legislative action.

The audit found that over the past 11 years, California saw a staggering 400% increase in hospice providers — which generally serve very sick patients with a life expectancy of six months or less — even though the need for such care only increased 40%.