Medicare Fraud Risk in Hospice Wound Care: Safeguarding Dignity and Resources

By Julie Roskamp, BS, RN, CWOCN, Head of Care Delivery

In light of recent arrests by the Department of Justice in Arizona, the spotlight is on the compliance risks and implications for hospice agencies in safeguarding vulnerable patients. On June 27, 2024, owners of two mobile wound care services were apprehended at the airport, accused of defrauding Medicare of $900 million. Their scheme targeted hospice patients, pushing nurse practitioners to apply costly skin
substitutes shortly before patients passed away, exploiting a loophole in Medicare billing.

Skin substitutes, normally used in outpatient wound clinics for non-healing wounds, were misapplied in hospice settings where palliative care should prevail. These products mimic natural skin, but their use on terminally ill patients contradicts the comfort-focused goals of hospice care. Despite this, these treatments are billed to Medicare with substantial markups, exacerbating costs outside the intended hospice benefit.

The question arises: who protects these vulnerable patients enrolled in hospice programs, and how do such fraudulent practices persist? Hospice patients often reside in long-term care or assisted living facilities, which partner with mobile wound clinics for convenience. This partnership, however, often lacks adequate oversight, allowing unregulated companies to perform unnecessary procedures like wound debridement, which can be physically and financially taxing for patients.

In my experience as a certified wound care nurse, I've encountered cases where advanced wound care products were overutilized, with multiple expensive dressings and daily changes billed unnecessarily. Primary care providers, unfamiliar with palliative wound care standards, may unknowingly endorse aggressive treatments, further complicating the patient's end-of-life journey.

A poignant example is the story of a friend whose elderly father developed gangrene while in hospice. Despite her expertise as a nurse practitioner, she struggled to manage his pain and discomfort effectively under hospice care. Eventually, she opted for surgical intervention, but the outcome was heartbreaking—her father, devastated by the loss of his leg, passed away shortly after.

Hospices must take accountability for their patients; wounds, integrating robust palliative wound care programs into their practices. This involves setting clear guidelines and procedures led by experienced wound care clinicians. Coordination with long-term care facilities and clear communication of care goals are crucial to ensure continuity and quality in wound management.

Education is also pivotal. Patients and families need to understand the palliative approach to wound care from the outset of hospice enrollment. This proactive approach not only manages expectations but also empowers families to make informed decisions aligned with their loved one's comfort and dignity.

Regulatory intervention is imperative. The Centers for Medicare and Medicaid Services (CMS) must tighten regulations around mobile wound care providers, akin to home health agencies. Collaboration between these providers and hospice interdisciplinary teams should be mandatory to streamline care and mitigate unnecessary costs billed to Medicare Part B.

Addressing these issues is essential not only to protect vulnerable patients but also to ensure the fiscal sustainability of Medicare and Medicaid. By focusing on palliative wound care and regulatory alignment, hospice agencies can fulfill their duty to provide compassionate end-of-life care while safeguarding precious healthcare resources for future generations.