By Jordan Rau
Kaiser Health News Staff Writer
Originally published 11/16/11
A lawsuit filed in Dallas against one of the nation's largest hospice companies identifies how Medicare's payment methods can offer unintended financial incentives to inappropriately move patients from HMOs into hospice programs and then into hospitals.In a complaint unsealed last week in a federal court, a former general manager of Vitas HealthCare Corp.'s San Antonio office alleged the company defrauded Medicare through a "conspiracy" with two HMO companies. Vitas and the companies have denied the allegations. The Department of Justice and the state of Texas have declined to join with the plaintiffs in the suit "at this time."
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, which accepted them even though their conditions weren't considered terminal.
The entire story can be read here.
