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The AseraCare Trial Gears Up and Creates Ripples for Larger Hospice Industry

Posted  August 6, 2015

By Mary Inman and Ari Yampolsky

The issue teed up in the Government’s trial against AseraCare cuts to the core of Medicare’s hospice benefit.  A Medicare beneficiary is eligible for hospice care only if two doctors certify that she is “terminally ill.”  This means that her illness will lead to her death within six months, if the illness runs its normal course.  Because Medicare beneficiaries who choose hospice care give up their entitlement to curative care, Congress designed a system that requires two medical doctors to determine that an individual is “terminally ill,” and thus an appropriate candidate for hospice care.  These two medical doctors are most commonly an individual’s family physician and the hospice’s medical director.  As a practical matter, the hospice’s medical director has primary responsibility for deciding whether hospice care is appropriate for an individual; while a family physician might make an initial referral for hospice care, the hospice’s medical director is most familiar with the clinical and regulatory requirements for eligibility.

In the AseraCare case, the Government alleges that AseraCare effectively shut out AseraCare’s medical directors from the eligibility-determination process, and instead put the process in the hands of AseraCare employees who were often financially incentivized to admit new patients.  In other words, rather than asking a medical director to evaluate a patient, AseraCare allegedly just told the doctor to “sign here.”  By admitting patients who do not qualify for hospice care, a hospice care provider like AseraCare can reap great financial rewards.  Its profits, though, come at the expense of patients, who may have been better served curing their illnesses.  And they come at the expense of the Government, which will have paid for hospice care that should not have been provided.

If the Government prevails in this case, hospice-care providers will have to take a hard look at their admissions practices and ensure that their medical directors are integrally involved in the eligibility-determination process.  Of course, the law already requires this.  But the AseraCare case signals that the Government will not allow hospice-care providers to skirt their obligations in the name of corporate profits.

Tagged in: Healthcare Fraud, Home Health and Hospice,