California reforms hospice laws in light of abuse, fraud investigations

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California Gov. Gavin Newsom signed two bills into law Oct. 4 mandating a licensing moratorium and cracking down on kickbacks and patient recruiting schemes in the state's hospice care, according to the Los Angeles Times.

The laws were prompted by a Dec. 9, 2020, investigation by the Times that exposed "explosive growth" in hospice as a multibillion-dollar business dominated by profits, resulting in widespread fraud, negligence and mistreatment. 

An extensive examination from the state's auditor is also underway to identify problems and improve licensing and oversight.

The licensing moratorium is set to remain in effect for 365 days following the publication of the state's audit, which is tentatively scheduled for March. The goals of the audit include: 

  • Evaluating the growth, as well as factors that led to it, of hospice providers in California over the last decade, and determining whether other states have experienced similar expansion and taken steps to address it.
  • Assessing the scope of hospice fraud and abuse in California and impact on the Medicare and Medi-Cal programs.
  • Identifying most prevalent types of hospice fraud and whether state regulators could do more to protect those affected.
  • Evaluating the effectiveness of California’s systems to identify, address, prosecute and deter hospice fraud and whether more resources are needed.
  • Assessing the effectiveness and comprehensiveness of state systems to screen and license new hospice providers.

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