By Marlissa Collier
Hospice care is a specialized care program intended for terminally ill patients with a life expectancy of six months or less. Medicare reimburses hospice providers at higher rates compared to traditional home health or nursing home care. The DOJ alleges that Elara Caring exploited this difference in reimbursement rates by improperly placing ineligible patients in hospice care to maximize profits.
According to the DOJ, some of the Elara Caring patients in question lacked a terminal illness, a key requirement for hospice care eligibility under Medicare. Additionally, the government alleges Elara Caring failed to properly document the eligibility of some patients for hospice care. An internal audit conducted by Elara Caring in 2019 reportedly identified over a dozen instances of improper hospice care, but the company allegedly did not report these findings to Medicare. The settlement comes on the heels of a whistleblower complaint filed by a former nurse. The whistleblower alleged that the company pressured staff to place patients in hospice care regardless of their eligibility.
Healthcare fraud is a persistent threat in U.S. healthcare, draining billions from the system. It’s estimated that between phantom billing (billing for services that are never performed), upcoding (assigning a higher-level code to a service than what was actually performed), unbundling (breaking down down a single service into multiple charges) and medical identity theft (stealing a patient’s identity to bill for fake services), the U.S. healthcare system loses about 3-5 percent of total spend. This ongoing loss from fraud is then rolled into what is already a higher-than-average cost of care in the U.S.
In 2022, the United States spent an estimated $4.5 trillion on healthcare alone. This translates to roughly $13,493 per person; more than double the average spending in comparable countries, which sits around $6,651. While billing fraud, an unethical practice that not only harms patients but also drives up healthcare costs for everyone, is part of the issue, U.S. healthcare is higher than other developed countries for several additional reasons. First, a private and profit-driven economic culture means that the U.S. pays more for many aspects of healthcare, including prescription drugs, physician and nurse compensation, hospital administration costs, and medical equipment. Next, the administrative complexity further complicates things. The system involves a complex web of insurers, providers, and government programs that can lead to administrative waste as resources are spent on billing, coding, and managing different insurance plans. It’s estimated that in 2022, 25% of all government healthcare spending was considered wasteful. Lastly, the American lifestyle tends to produce chronic conditions like obesity and diabetes that are far more prevalent in the US than in many other countries. These conditions require ongoing medical care, which contributes to higher healthcare spending.