End-of-Life for a Major Hospice?

San Diego Hospice may not make it.

That’s the news out here for an organization that is described as “iconic in the hospice world.”  Last November, a Medicare audit concluded that the government had been overcharged—a lot—by San Diego Hospice.  Apparently the problem was filing claims for people who weren’t quite sick enough—expected to die within 6 months—to require hospice care by the Medicare reimbursement rules.  And, sometimes, people get a bit better, so they outlive expectations and aren’t supposed to qualify for continued Medicare reimbursement, but the hospice continued to file claims.

The immediate repercussions have been catastrophic—a Chapter 11 bankruptcy filing, a 30% shortfall of operating expenses, layoffs of about a third of employees, with more likely on the way, and a reduction in inpatient hospice census from 1000 to 450, so the local paper reports.  The CEO says they may not “have a viable organization moving forward.”  How much does Medicare think it should be refunded?  Try a number north of a million dollars—perhaps well north of that.  At least, that is the worry.  Just how much money we are talking about may not be clear to S.D. Hospice—and if so, that may be part of the problem.

The publicly-available information is still incomplete.  I have not seen allegations or speculations about poor management or fraud, and I certainly am in no position to speculate on the details of the case.  My first reaction was to think that an organization pressured by tight reimbursement rules got out “over its skis,” as it were, trying to get paid as much as legitimately possible, and in the process made some mistakes.  I don’t know.

There will still be hospice service available in San Diego County.  Competitors are emerging.  But I hope this will not mean that medically-appropriate palliative care will get too squeezed by payment rules—indeed, at a time when the merits of good routine palliative care is being more prominently discussed, at least in the oncology publications I try to keep up with.  And I guess it means that even for non-profits, money matters, and “good business management” is not a dirty word.

A story to be followed…

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Robin

The sad thing about this is that patients that actually need longer term hospice care are going to suffer the consequences of the cut backs that will result in the backlash from this.