The shift from nonprofit to for-profit hospice

Over the past two decades, many hospice facilities have turned into for-profit entities — part of a change that has seen nonprofits in the industry become the minority, The New York Times reported June 10.

In 2001, there were 1,185 nonprofit hospices and 800 for-profit companies. But in 2021, almost three-quarters of the nation's 5,000 hospices were for-profit, and many were affiliated with regional or national chains. Roughly half of Americans who die each year turn to hospice care, and the number of Medicare beneficiaries enrolled in hospitals rose from 580,000 in 2001 to 1.7 million in 2020.

The shift was probably inevitable, Ben Marcantonio, interim chief executive of the National Hospice and Palliative Care Organizations, told the Times. Researchers have found private equity firms have been acquiring nonprofit hospice organizations, reducing costs by cutting staff, and then reselling the businesses a few years later.

The change to majority for-profit hospices has led to disparities in cost and patient services. A 2020 report from independent agency MedPAC found that for-profits received 20.5 percent more from Medicare than they spend providing services, while nonprofits averaged 5.8 percent.

"There were really stark differences," Megan Stainer, 45, a licensed practical nurse, told the Times. Looking at their medical charts, "the nonprofit patients always had the most visits: nurses, chaplains, social workers."

Ms. Stainer described a practice called "live discharge" where patients were removed from hospice because they no longer met the criteria for declining health, and were then re-enrolled later. A 2015 report by researchers at Providence, R.I.-based Brown University found that 12 percent of patients at for-profits affiliated with national chains and 18 percent of patients at for-profits that were not chain-affiliated are live discharged, compared with only 1.4 percent of patients in nonprofit hospices.

An analysis of 653,208 family caregiver surveys from 2017 to 2019 found that 31 percent of for-profit hospices were ranked as "low performers," compared with 12.5 percent of nonprofits. More than one-third of nonprofits were ranked as "high performers," compared with only 22 percent of for-profits.

Fraud also appears to be increasing in the industry. An investigation by California state auditors found numerous new for-profit hospices getting certified and billing Medicare in the state. The number far outstripped the need and dozens of hospices shared common addresses. The "numerous indicators suggest large-scale hospice fraud and abuse," an auditor said, which led to the state imposing a moratorium on hospice licenses.

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