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Half of all Americans now die in hospice care. Easy money and a lack of regulation transformed a crusade to provide death with dignity into an industry rife with fraud and exploitation.
Over the years, Marsha Farmer had learned what to look for. As she drove the back roads of rural Alabama, she kept an eye out for dilapidated homes and trailers with wheelchair ramps. Some days, she’d ride the one-car ferry across the river to Lower Peach Tree and other secluded hamlets where a few houses lacked running water and bare soil was visible beneath the floorboards. Other times, she’d scan church prayer lists for the names of families with ailing members.
Farmer was selling hospice, which, strictly speaking, is for the dying. To qualify, patients must agree to forgo curative care and be certified by doctors as having less than six months to live. But at AseraCare, a national chain where Farmer worked, she solicited recruits regardless of whether they were near death. She canvassed birthday parties at housing projects and went door to door promoting the program to loggers and textile workers. She sent colleagues to cadge rides on the Meals on Wheels van or to chat up veterans at the American Legion bar. “We’d find run-down places where people were more on the poverty line,” she told me. “You’re looking for uneducated people, if you will, because you’re able to provide something to them and meet a need.”
Farmer, who has doe eyes and a nonchalant smile, often wore scrubs on her sales routes, despite not having a medical background. That way, she said, “I would automatically be seen as a help.” She tried not to mention death in her opening pitch, or even hospice if she could avoid it. Instead, she described an amazing government benefit that offered medications, nursing visits, nutritional supplements and light housekeeping — all for free. “Why not try us just for a few days?” she’d ask families, glancing down at her watch as she’d been trained to do, to pressure them into a quick decision.
Once a prospective patient expressed interest, a nurse would assess whether any of the person’s conditions fit — or could be made to fit — a fatal prognosis. The Black Belt, a swath of the Deep South that includes parts of Alabama, has some of the highest rates of heart disease, diabetes and emphysema in the country. On paper, Farmer knew, it was possible to finesse chronic symptoms, like shortness of breath, into proof of terminal decline.
When Farmer started out in the hospice business, in 2002, it felt less like a sales gig than like a calling. At 30, she’d become a “community educator,” or marketer, at Hospice South, a regional chain that had an office in her hometown, Monroeville, Alabama. Monroeville was the kind of place where, if someone went into hospice, word got around and people sent baked goods. She often asked patients to write cards or make tape recordings for milestones — birthdays, anniversaries, weddings — that they might not live to see. She became an employee of the month and, within a year, was promoted to executive director of the branch, training a staff of her own to evangelize for end-of-life care.
Things began to change in 2004, when Hospice South was bought by Beverly Enterprises, the second-largest nursing-home chain in the country, and got folded into one of its subsidiaries, AseraCare. Not long before the sale, Beverly had agreed to pay a $5 million criminal fine and a $175 million civil settlement after being accused of Medicare fraud. Its stock value had slumped, and Beverly’s CEO had decided that expanding its empire of hospices would help the company attract steadier revenue in “high-growth, high-margin areas of health care services.” Less than two years later, as part of a wave of consolidations in the long-term-care industry, Beverly was sold to a private-equity firm, which rebranded it as Golden Living.
It might be counterintuitive to run an enterprise that is wholly dependent on clients who aren’t long for this world, but companies in the hospice business can expect some of the biggest returns for the least amount of effort of any sector in American health care. Medicare pays providers a set rate per patient per day, regardless of how much help they deliver. Since most hospice care takes place at home and nurses aren’t required to visit more than twice a month, it’s not difficult to keep overhead low and to outsource the bulk of the labor to unpaid family members — assuming that willing family members are at hand.
Up to a point, the way Medicare has designed the hospice benefit rewards providers for recruiting patients who aren’t imminently dying. Long hospice stays translate into larger margins, and stable patients require fewer expensive medications and supplies than those in the final throes of illness. Although two doctors must initially certify that a patient is terminally ill, she can be recertified as such again and again.
Almost immediately after the AseraCare takeover, Farmer’s supervisors set steep targets for the number of patients marketers had to sign up and presented those who met admissions quotas with cash bonuses and perks, including popcorn machines and massage chairs. Employees who couldn’t hit their numbers were fired. Farmer prided herself on being competitive and liked to say, “I can sell ice to an Eskimo.” But as her remit expanded to include the management of AseraCare outposts in Foley and Mobile, she began to resent the demand to bring in more bodies. Before one meeting with her supervisor, Jeff Boling, she stayed up late crunching data on car wrecks, cancer and heart disease to figure out how many people in her territories might be expected to die that year. When she showed Boling that the numbers didn’t match what she called his “ungodly quotas,” he was unmoved. “If you can’t do it,” she recalled him telling her, “we’ll find someone who can.”
Farmer’s bigger problem was that her patients weren’t dying fast enough. Some fished, drove tractors and babysat grandchildren. Their longevity prompted concern around the office because of a complicated formula that governs the Medicare benefit. The federal government, recognizing that an individual patient might not die within the predicted six months, effectively demands repayment from hospices when the average length of stay of all patients exceeds six months.
But Farmer’s company, like many of its competitors, had found ways to game the system and keep its money. One tactic was to “dump,” or discharge, patients with overly long stays. The industry euphemism is “graduated” from hospice, though the patient experience is often more akin to getting expelled: losing diapers, pain medications, wheelchairs, nursing care and a hospital-grade bed that a person might not otherwise be able to afford. In 2007, according to Farmer’s calculations around the time, 70% of the patients served by her Mobile office left hospice alive.
Another way to hold on to Medicare money was to consistently pad the roster with new patients. One day in 2008, facing the possibility of a repayment, AseraCare asked some of its executive directors to “get double digit admits” and to “have the kind of day that will go down in the record books.” A follow-up email, just an hour later, urged staff to “go around the barriers and make this happen now, your families need you.”
That summer, Boling pushed Farmer to lobby oncologists to turn over their “last breath” patients: those with only weeks or days to live. At the time, Farmer’s 59-year-old mother was dying of metastatic colon cancer. Although Farmer knew that the service might do those last-breath people good, it enraged her that her hospice was chasing them cynically, to balance its books. The pressure was so relentless that sometimes she felt like choking someone, but she had two small children and couldn’t quit. Her husband, who had been a co-worker at AseraCare, had already done so. Earlier that year, after fights with Boling and other supervisors about quotas, he had left for a lower-paying job at Verizon.
Farmer’s confidante at work, Dawn Richardson, shared her frustration. A gifted nurse who was, as Farmer put it, “as country as a turnip,” Richardson hated admitting people who weren’t appropriate or dumping patients who were. She was a single mom, though, and needed a paycheck. One evening in early 2009, the two happened upon another way out.
The local news was reporting that two nurses at SouthernCare, a prominent Alabama-based competitor, had accused the company of stealing taxpayer dollars by enrolling ineligible patients in hospice. SouthernCare, which admitted no wrongdoing, settled with the Justice Department for nearly $25 million, and the nurses, as whistle-blowers, had received a share of the sum — $4.9 million, to be exact. Farmer and Richardson had long felt uneasy about what AseraCare asked them to do. Now, they realized, what they were doing might be illegal. They decided to call James Barger, a lawyer who had represented one of the SouthernCare nurses. That March, he helped Farmer and Richardson file a whistleblower complaint against AseraCare and Golden Living in the Northern District of Alabama, accusing the company of Medicare fraud. The case would go on to become the most consequential lawsuit the hospice industry had ever faced.
The philosophy of hospice was imported to the United States in the 1960s by Dame Cicely Saunders, an English doctor and social worker who’d grown appalled by the “wretched habits of big, busy hospitals where everyone tiptoes past the bed and the dying soon learn to pretend to be asleep.” Her counterpractice, which she refined at a Catholic clinic for the poor in East London, was to treat a dying patient’s “total pain” — his physical suffering, spiritual needs and existential disquiet. In a pilot program, Saunders prescribed terminally ill patients cocktails of morphine, cocaine and alcohol — whiskey, gin or brandy, depending on which they preferred. Early results were striking. Before-and-after photos of cancer patients showed formerly anguished figures knitting scarves and raising toasts.
Saunders’ vision went mainstream in 1969, when the Swiss-born psychiatrist Elisabeth Kübler-Ross published her groundbreaking study, “On Death and Dying.” The subjects in her account were living their final days in a Chicago hospital, and some of them described how lonely and harsh it felt to be in an intensive-care unit, separated from family. Many Americans came away from the book convinced that end-of-life care in hospitals was inhumane. Kübler-Ross and Saunders, like their contemporaries in the women’s-health and deinstitutionalization movements, pushed for greater patient autonomy — in this case, for people to have more control over how they would exit the world. The first American hospice opened in Connecticut in 1974. By 1981, hundreds more hospices had started, and, soon after, President Ronald Reagan recognized the potential federal savings — many people undergo unnecessary, expensive hospitalizations just before they die — and authorized Medicare to cover the cost.
Forty years on, half of all Americans die in hospice care. Most of these deaths take place at home. When done right, the program allows people to experience as little pain as possible and to spend meaningful time with their loved ones. Nurses stop by to manage symptoms. Aides assist with bathing, medications and housekeeping. Social workers help families over bureaucratic hurdles. Clergy offer what comfort they can, and bereavement counselors provide support in the aftermath. This year, I spoke about hospice with more than 150 patients, families, hospice employees, regulators, attorneys, fraud investigators and end-of-life researchers, and all of them praised its vital mission. But many were concerned about how easy money and a lack of regulation had given rise to an industry rife with exploitation. In the decades since Saunders and her followers spread her radical concept across the country, hospice has evolved from a constellation of charities, mostly reliant on volunteers, into a $22 billion juggernaut funded almost entirely by taxpayers.
For-profit providers made up 30% of the field at the start of this century. Today, they represent more than 70%, and between 2011 and 2019, research shows, the number of hospices owned by private-equity firms tripled.The aggregate Medicare margins of for-profit providers are three times that of their nonprofit counterparts. Under the daily-payment structure, a small hospice that bills for just 20 patients at the basic rate can take in more than a million dollars a year. A large hospice billing for thousands of patients can take in hundreds of millions. Those federal payments are distributed in what is essentially an honor system. Although the government occasionally requests more information from billers, it generally trusts that providers will submit accurate claims for payment — a model that critics deride as “pay and chase.”
Jean Stone, who worked for years as a program-integrity senior specialist at the Centers for Medicare and Medicaid Services, said that hospice was a particularly thorny sector to police for three reasons: “No one wants to be seen as limiting an important service”; it’s difficult to retrospectively judge a patient’s eligibility; and “no one wants to talk about the end of life.” Although a quarter of all people in hospice enter it only in their final five days, most of the Medicare spending on hospice is for patients whose stays exceed six months. In 2018, the Office of Inspector General at the Department of Health and Human Services estimated that inappropriate billing by hospice providers had cost taxpayers “hundreds of millions of dollars.” Stone and others I spoke to believe the figure to be far higher.
Some hospice firms bribe physicians to bring them new patients by offering all-expenses-paid trips to Las Vegas nightclubs, complete with bottle service and private security details. (The former mayor of Rio Bravo, Texas, who was also a doctor, received outright kickbacks.) Other audacious for-profit players enlist family and friends to act as make-believe clients, lure addicts with the promise of free painkillers, dupe people into the program by claiming that it’s free home health care or steal personal information to enroll “phantom patients.” A 29-year-old pregnant woman learned that she’d been enrolled in Revelation Hospice, in the Mississippi Delta (which at one time discharged 93% of its patients alive), only when she visited her doctor for a blood test. In Frisco, Texas, according to the FBI, a hospice owner tried to evade the Medicare-repayment problem by instructing staff to overdose patients who were staying on the service too long. He texted a nurse about one patient: “He better not make it tomorrow. Or I will blame u.” The owner was sentenced to more than 13 years in prison for fraud, in a plea deal that made no allegations about patient deaths.
A medical background is not required to enter the business. I’ve come across hospices owned by accountants; vacation-rental superhosts; a criminal-defense attorney who represented a hospice employee convicted of fraud and was later investigated for hospice fraud himself; and a man convicted of drug distribution who went on to fraudulently bill Medicare more than $5 million for an end-of-life-care business that involved handling large quantities of narcotics.
Once a hospice is up and running, oversight is scarce. Regulations require surveyors to inspect hospice operations once every three years, even though complaints about quality of care are widespread. A government review of inspection reports from 2012 to 2016 found that the majority of all hospices had serious deficiencies, such as failures to train staff, manage pain and treat bedsores. Still, regulators rarely punish bad actors. Between 2014 and 2017, according to the Government Accountability Office, only 19 of the more than 4,000 U.S. hospices were cut off from Medicare funding.
Because patients who enroll in the service forgo curative care, hospice may harm patients who aren’t actually dying. Sandy Morales, who until recently was a case manager at the California Senior Medicare Patrol hotline, told me about a cancer patient who’d lost access to his chemotherapy treatment after being put in hospice without his knowledge. Other unwitting recruits were denied kidney dialysis, mammograms, coverage for lifesaving medications or a place on the waiting list for a liver transplant. In response to concerns from families, Morales and her community partners recently posted warnings in Spanish and English in senior apartment buildings, libraries and doughnut shops across the state. “Have you suddenly lost access to your doctor?” the notices read. “Can’t get your medications at the pharmacy? Beware! You may have been tricked into signing up for a program that is medically unnecessary for you.”
Some providers capitalize on the fact that most hospice care takes place behind closed doors, and that those who might protest poor treatment are often too sick or stressed to do so. One way of increasing company returns is to ghost the dying. A 2016 study in JAMA Internal Medicine of more than 600,000 patients found that 12% received no visits from hospice workers in the last two days of life. (Patients who died on a Sunday had some of the worst luck.) For-profit hospices have been found to have higher rates of no-shows and substantiatedcomplaints than their nonprofit counterparts, and to disproportionately discharge patients alive when they approach Medicare’s reimbursement limit.
“There are so many ways to do fraud, so why pick this one?” Stone said. This was more or less what Marsha Farmer and Dawn Richardson had been wondering when they filed their complaint against AseraCare in 2009. Now, working undercover, they imagined themselves as part of the solution.
In the absence of guardrails, whistleblowers like Farmer and Richardson have become the government’s primary defense against hospice wrongdoing — an arrangement that James Barger, their lawyer, describes as placing “a ludicrous amount of optimism in a system with a capitalist payee and a socialist payer.” Seven out of 10 of the largest hospices in the U.S. have been sued at least once by former employees under the federal False Claims Act. The law includes a “qui tam” provision — the term derives from a Latin phrase that translates as “he who sues on behalf of the King as well as himself ” — that deputizes private citizens to bring lawsuits that accuse government contractors of fraud and lets them share in any money recovered. Qui-tam complaints, like Farmer and Richardson’s, are initially filed secretly, under seal, to give the Justice Department a chance to investigate a target without exposing the tipster. If the government decides to proceed, it takes over the litigation. In 2021 alone, the government recovered more than $1.6 billion from qui-tam lawsuits, and the total amount awarded to whistleblowers was $237 million.
In the two years after Farmer and Richardson filed their complaint, both slept poorly. But their covert undertaking also felt cathartic — mental indemnification against a job that troubled their consciences. Farmer continued to bring in patients at AseraCare while passing company documents to Barger, including spreadsheets analyzing admissions quotas and a training PowerPoint used by the company’s national medical adviser, Dr. James Avery. A pulmonologist who was fond of citing Seneca, Tolstoy and Primo Levi in his slides, Avery urged nurses to “be a detective” and to “look for clues” if a patient didn’t initially appear to fit a common hospice diagnosis. (Avery said that he never encouraged employees to admit ineligible patients.) He sometimes concluded his lectures with a spin on an idea from Goethe’s “Faust”: “Perpetual striving that has no goal but only progress or increase is a horror.”
Barger was impressed by the records that Farmer collected and even more so by her candor about her involvement in AseraCare’s schemes. She and Richardson reminded him of friends he’d had growing up: smart, always finishing each other’s sentences and not, he said, “trying to be heroes.” Nor, as it turned out, were they the only AseraCare employees raising questions about company ethics. The year before, three nurses in the Milwaukee office had filed a qui-tam complaint outlining similar corporate practices. The False Claims Act has a “first to file” rule, so the Wisconsin nurses could have tried to block Farmer and Richardson from proceeding with their case. Instead, the nurses decided to team up with their Alabama colleagues, even if it meant that they’d each receive a smaller share of the potential recovery. Also joining the crew was Dr. Joseph Micca, a former medical director at an AseraCare hospice in Atlanta. Every hospice is required to hire or contract with a doctor to sign forms certifying a patient’s eligibility for the program, and Micca accused the company of both ineligible enrollments and lapses in patient care. In his deposition, he described one patient who was given morphine against his orders and was kept in hospice care for months after she’d recovered from a heart attack. The woman, who was eventually discharged, lived several more years.
Among the most critical pieces of evidence to emerge in the discovery process was an audit that echoed many of the allegations made by the whistleblowers. In 2007 and 2008, AseraCare had hired the Corridor Group, a consulting firm, to visit nine of its agencies across the country, including the Monroeville office that Farmer oversaw. The Corridor auditors observed a “lack of focus” on patient care and “little discussion of eligibility” at regular patient-certification meetings. Clinical staff were undertrained, with a “high potential for care delivery failures,” and appeared reluctant to discharge inappropriate patients out of fear of being fired. Emails showed that the problems raised by the audit were much discussed among AseraCare’s top leadership, including its vice president of clinical operations, Angie Hollis-Sells.
One morning in the spring of 2011, Hollis-Sells strode into the old bank building that housed the Monroeville office, her expression uncommonly stern. Farmer knew at once that her role in the case had been exposed. She was sent home on paid leave, and that evening half a dozen colleagues showed up at her clapboard house in the center of town. Some felt betrayed. Their manager had kept from them a secret that might upend their livelihoods; worse, her accusations seemed to condemn them for work she’d asked them to do. But shortly afterward, when Farmer took a job as the executive director of a new hospice company in Monroeville, Richardson and several other former co-workers joined her.
Less than a year later, the Justice Department, after conducting its own investigation, intervened in the whistleblowers’ complaint, eventually seeking from AseraCare a record $200 million in fines and damages. As Barger informed his clients, the company was likely to settle. Most False Claims Act cases never reach a jury, in part because trials can cost more than fines and carry with them the threat of exclusion from the Medicare program — an outcome tantamount to bankruptcy for many medical providers. In 2014, Farmer traveled to Birmingham for her deposition, imagining that the case would soon end. But, in the first of a series of unexpected events, AseraCare decided to fight.
United States v. AseraCare, which began on Aug. 10, 2015, in a federal courthouse in Birmingham, was one of the most bizarre trials in the history of the False Claims Act. To build its case against AseraCare, the government had identified some 2,100 of the company’s patients who had been in hospice for at least a year between 2007 and 2011. From that pool, a palliative care expert, Dr. Solomon Liao, of the University of California, Irvine, reviewed the records of a random sample of 233 patients. He found that around half of the patients in the sample were ineligible for some or all of the hospice care they’d received. He also concluded that ineligible AseraCare patients who had treatable or reversible issues at the root of their decline were unable to get the care they needed, and that being in hospice “worsened or impeded the opportunity to improve their quality of life.”
Before the trial started, the judge in the case, Karon O. Bowdre, disclosed that she’d had good experiences with hospice. Her mother, who had an ALS diagnosis, had spent a year and a half on the service, and her father-in-law had died in hospice shortly before the trial. Principals in the case disagree about whether she disclosed that the firm handling AseraCare’s defense, Bradley Arant, had just hired her son as a summer associate.
The defense team had petitioned Bowdre to separate the proceedings into two parts: the first phase limited to evidence about the “falsity” of the 123 claims in question, and the second part examining, among other things, the company’s “knowledge of falsity.” The Justice Department objected to this “arbitrary hurdle,” arguing that the purpose of the False Claims Act was to combat intentional fraud, not accidental mistakes. “The fact that AseraCare knowingly carried out a scheme to submit false claims is highly relevant evidence that the claims were, in fact, false,” the government wrote. Nonetheless, in an unprecedented legal move, Bowdre granted AseraCare’s request.
Trial lawyers are expected to squabble over the relevance of the opposing party’s evidence — and, in the private sector, they are compensated handsomely for doing so. But the government lawyers seemed genuinely confused about what the judge would and wouldn’t allow into the courtroom during the trial’s “falsity” phase. In long sidebar discussions, during which jurors languished and white noise was piped in through the speakers, Bowdre berated the prosecution for its efforts to “poison the well” with “all this extraneous stuff that the government wants to stir up to play on the emotions of the jury.” Much of her vexation was directed at Jeffrey Wertkin, one of the Justice Department’s top picks for difficult fraud assignments. A prosecutor in his late 30s, he had a harried, caffeinated air about him and had helped bring about settlements in more than a dozen cases. This was only his second trial, however, and Bowdre was reprimanding him like a schoolboy. “It made me sick to watch her treatment of him,” Henry Frohsin, one of Barger’s partners, recalled. “At some point, I couldn’t watch it, so I just got up and left.”
The judge’s prohibition on “knowledge” during the trial’s first phase constrained testimony in sometimes puzzling ways. Richardson, for instance, could talk about admitting patients, but she couldn’t allude to the pressure she was under to do so. The audit by the Corridor Group that corroborated whistleblower claims was forbidden because it wasn’t directly tied to the specific patients in the government’s sample. Micca, the former medical director from Atlanta, was not allowed to testify for the same reason. Nonetheless, over several days, the government’s witnesses managed to paint a picture of AseraCare’s cavalier attitude toward patient eligibility. Its medical directors were part time, as is common in the industry, and workers testified that they’d presented these doctors with misleading patient records to secure admissions. One said that a director had pre-signed blank admissions forms. “Ask yourself: How could a doctor be exercising their clinical judgment,” Wertkin told the jury at one point, “if he’s signing a blank form?”
When Farmer took the stand, Wertkin asked if she was nervous. “A lot nervous today,” she replied. She thought the jurors might judge her for trolling for wheelchair ramps or other recruitment tactics. She needn’t have worried. Bowdre’s restrictions prevented Farmer from testifying about much of anything. “I felt like the judge did not want to know the truth,” she said. “The whole time that I was on the stand, I kept thinking, Why would you not listen to the story?”
The bulk of phase one was dominated by doctors: Liao, the government’s expert, read selections from thousands of pages of medical files to explain why he’d concluded that patients were ineligible, and AseraCare’s medical experts took the stand and disagreed with most of his conclusions. However, the crux of AseraCare’s defense was that the entire debate about eligibility was essentially moot because, although death is certain, its timing is not. A medical director who signed a hospice certification form would have had no way of anticipating whether a patient’s illness would deviate from the expected trajectory of decline. Even Medicare, the defense team emphasized, has noted that predicting life expectancy is “not an exact science.”
After nearly two months of testimony, the jurors deliberated for nine days on phase one. On Oct. 15, 2015, they found 86% of the patient sample ineligible for some period of hospice care. Elated, Barger rushed out of the courtroom to call Farmer and tell her that the jury had come back overwhelmingly in the government’s favor. The next part of the trial will be icing on the cake, she remembers thinking.
The next part never happened. A few days later, Bowdre made a startling announcement: She had messed up. The instructions that she’d given the jury had been incomplete, she said, and because of this “major reversible error” she was overturning the jury’s findings and granting a request by AseraCare for a new trial. She invited the government to submit evidence other than Liao’s opinion to prove that the claims were false; the government replied that the record presented ample evidence of falsity. Five months later, in March 2016, Bowdre granted summary judgment to AseraCare.
It’s unusual for a judge to overturn a jury’s findings, order a new trial and then declare summary judgment on her own accord, Zack Buck, a legal scholar at the University of Tennessee who studies health care fraud, told me. The case, he said, “just kept getting weirder.” Wertkin, who had expected to return to Washington, D.C., with that rare article — a jury verdict in a False Claims Act case — later said he felt as though the “rug had been ripped out from under me.”
In a widely circulated opinion, Bowdre wrote that clinical disagreement among doctors was not enough on its own to render a claim false. Otherwise, hospice providers would be subject to liability “any time the Government could find a medical expert who disagreed” with their physician, and “the court refuses to go down that road.” The Justice Department appealed Bowdre’s ruling, but many in the hospice industry celebrated the opinion. “There are huge implications,” Buck said. “So much of our system is based on a doctor’s discretion, and if you can’t say the doctor is wrong you’ve really hamstrung the government’s ability to bring these kinds of cases.” In op-eds and on the lecture circuit, defense lawyers for health care companies hailed the beginning of a post-AseraCare era.
That year, Dr. Scott Nelson, a family practitioner in Cleveland, Mississippi, was wrapping up a lucrative tour of duty in the hospice trade. Since 2005, Nelson had referred approximately 763 patients to 25 hospices, 14 of which employed him as the medical director, according to a special agent in the Department of Health and Human Services’ Office of Inspector General. Some of Nelson’s patients, however, didn’t know that they were dying and a decade or more later remained stubbornly alive.
In the course of roughly six years, by the doctor’s own account, he received around $400,000 for moonlighting as the medical director at eight of the companies. Meanwhile, those hospice owners, some of whom were related to one another, received a total of more than $15 million from Medicare for the patients he’d certified. In a scheme that the special agent, Mike Loggins, later testified was spreading across the Mississippi Delta “like cancer,” hospices bused in vans of people to Nelson’s clinic. The owner of Word of Deliverance Hospice — one small-town provider that briefly put Nelson on its payroll — bought a $300,000 Rolls-Royce that was later confiscated by the government. Nelson, who was convicted earlier this year of seven counts of health care fraud, told me that he’d fallen victim to greedy hospice entrepreneurs who had done hundreds of “third-grader-level forgeries” of his signature when racking up illegal enrollments, and that he’d assumed other forms he’d signed were truthful. Nelson awaits sentencing and has filed a motion challenging the verdict.
The Mississippi Delta has an acute shortage of primary-care providers — a problem that contributes to the region’s poor health outcomes. When I visited some of the fraud victims in the case, all of whom were Black, they told me that the experience of being duped had deepened their mistrust of a health care system that already seemed out of reach. Some of the patients Nelson had approved for hospice were in their 40s and 50s. One had cognitive disabilities, and another couldn’t read. Marjorie and Jimmie Brown, former high school sweethearts in their 70s, found out that they had been enrolled in Lion Hospice only in 2017, when Loggins knocked on the front door of their yellow brick bungalow. A worker for Lion had tricked the Browns into trading away their right to curative care, and Nelson — whom they’d never heard of, let alone seen — was one of two doctors whose names were on the paperwork.
Losing access to care is hardly the only thing that can go wrong for patients inappropriately assigned to hospice. In May 2016, Lyman Marble found his wife, Patricia, unresponsive and lying face down in their bed. At a hospital near their home in Whitman, Massachusetts, doctors were shocked by the high doses of opiates she’d been prescribed. An addiction specialist later observed that she was ingesting the equivalent of dozens of Percocet pills a day. Only after Lyman told the doctors to “flush her out like Elvis” did her family come to suspect that her health crisis was caused by hospice care itself.
The Marbles, who had been married for more than 50 years, worked together in a variety of jobs, among them operating an outer-space-themed carnival ride. Five years earlier, Patricia had been admitted to a hospice owned by Amedisys, the third-largest provider in the country. The diagnosis was end-stage chronic obstructive pulmonary disease.
She was 70 years old and had health troubles: She used a wheelchair and supplemental oxygen, and had diabetes, hypertension and a benign tumor that caused her pain. That pain had been treated by a fentanyl patch, but once she was in hospice the medical director, Dr. Peter Roos, prescribed morphine, Vicodin, Ativan and gabapentin, too. Over the next five years, he kept prescribing narcotics, recertifying her for hospice 30 times. (Roos, who said in a deposition that he prescribed morphine to ease Marble’s respiratory distress, did not respond to requests for comment.) Court documents later revealed that cash bonuses were a reward for good enrollment numbers at that branch of Amedisys, and that nurses had resigned after being pressured to admit and recertify patients who they didn’t think were dying.
While under the care of Amedisys, Patricia sometimes couldn’t remember who or where she was. “I felt like I was dead,” she later said. “It just made me feel like ‘That’s right, I’m in the right place because I’m going to die.’” But after Lyman learned that he could “fire hospice,” as he put it, and Patricia was slowly weaned from narcotics, her memory began to return and her breathing improved. Lyman, who had thought that he might lose his wife at any moment (at one point, Amedisys had asked if he was making funeral arrangements), was stunned by her transformation. Today, more than a decade after first enrolling in hospice, Patricia remains opioid-free and has described her lost years as like being on “the moon or someplace.” For that misadventure, the company billed Medicare almost half a million dollars. Last year, Amedisys settled a suit brought by the Marbles for $7.75 million. The company declined to comment, stating that the settlement was confidential.
Because pinpointing what constitutes a “good death” is nearly as difficult as determining what makes a good life, families may not always realize when hospice is failing them — even when they work in the industry. In November 2014, Carl Evans, a 77-year-old former janitor from Orange County, took a fall and, when hospitalized, was tentatively diagnosed as having end-stage thymus cancer. Soon after, he was discharged to a nursing home and enrolled in a hospice run by Vitas, one of the largest providers of end-of-life care in the United States. Andrea Crawford, one of his daughters, was a hospice nurse and had worked for the company early in her career. When she visited her father in his private room, which had a sofa and a flat-screen TV, he told her that he was being treated “like a king.”
Evans had been living independently, with his longtime girlfriend, before his fall. And, unlike many hospice patients, he remained mobile and gregarious, with a big appetite much noted in his charts. Early in the morning of Nov. 22, in search of a non-institutional meal, he climbed out a window and got on a bus to his girlfriend’s house. (His preferred ride, a lovingly maintained burgundy Trans Am, was unavailable.) A family friend eventually located him, 30 miles away.
On Evans’ return, Dr. Thomas Bui, a medical director at Vitas, placed an urgent order for him to receive phenobarbital, a barbiturate that is sometimes prescribed for agitation and can cause extreme drowsiness. A few days later, Vitas records show, Bui added Keppra, an anti-seizure medication that also has sedative properties, to the mix. Evans had no known history of seizures, and Crawford later suspected that the two drugs had been prescribed to subdue him for the convenience of the staff. After the addition of Keppra, his chart shows, Evans became wobbly on his feet and then so lethargic that he couldn’t get out of bed — though he remained alert enough to be terrified at his sudden decline. Crawford, concerned, attributed the change to the drugs he was taking, as did a Vitas employee, according to medical records. On Dec. 6, Evans died.
The official cause of death was cancer (hospice patients are not typically given autopsies), but Evans’ family filed a suit against Vitas and Bui. The lawsuit was settled, and Vitas denies allegations of wrongdoing. Bui, who said in a deposition that he medicated Evans to soothe his agitation, didn’t respond to requests for comment. The California medical board disciplined him for his handling of the case. He was placed on a three-year probation, during which he was prohibited from practicing alone, and was ordered to take a course on safe prescribing.
Malpractice cases against hospices are rare. As Reza Sobati, an elder-abuse lawyer who represented Evans’ family, told me: “The defense we often get in a nursing home case is that they were going to die anyway from their issues. That’s even harder to overcome with hospice, since a doctor has literally certified it will happen.”
Afterward, as Crawford reviewed medical charts and tried to understand what had happened to her father, she came across some notes that surprised her. When Evans entered hospice, Vitas had certified him for a heightened level of care intended for patients with uncontrolled pain or severe and demanding symptoms, which Evans didn’t have. As a hospice nurse, Crawford knew that such coding allowed Vitas to bill Medicare more — roughly four times more — per day than the rate for a routine patient. (Vitas denies inappropriate billing.)
In 2016, not long after Judge Bowdre dismissed the AseraCare case, someone began to anonymously contact companies that were the subjects of sealed qui-tam complaints. Those sealed complaints named the whistleblowers and the details of their accusations — information that the accused companies could use to get ahead of government investigators and their subpoenas or possibly to intimidate informers into silence. When a general counsel at a tech firm returned the mysterious voicemail, the insider, who called himself Dan, offered to share a complaint that named the company in exchange for a “consulting fee” of $300,000, preferably paid in bitcoin.
The lawyer alerted the FBI and began recording his conversations with Dan, including one arranging the handoff of the documents in Silicon Valley. On the morning of Jan. 31, 2017, Dan texted an FBI agent posing as one of the tech company’s employees the address of a hotel in Cupertino and instructed him to sit in the lobby on “a chair with a newspaper on it” just past “the water station.” Moments after the undercover agent sat down, Dan approached him with a copy of the complaint and was arrested. It turned out that Dan, who the FBI said was disguised in a wig, was the former government prosecutor Jeffrey Wertkin.
By then, Wertkin had left the Department of Justice to become a partner at the elite law firm Akin Gump, a job that paid $450,000 a year. His bio on the company’s website noted that, after leading more than 20 fraud cases, he had “first-hand knowledge of the legal and practical considerations that shape government investigations.” As part of a plot that his former Justice Department colleagues termed “the most serious and egregious example of public corruption by a DOJ attorney in recent memory,” Wertkin had, on his way out the door, taken at least 40 sealed qui-tam complaints belonging to the Civil Fraud Section.
He later ascribed his short-lived criminal spree, which his defense team compared to “a scene out of a B-grade action movie,” to what had occurred in Judge Bowdre’s courtroom. Wertkin’s wife said in a letter to the court that he had returned home from the AseraCare trial a “shell of a man” who drank heavily and spent several days watching movies on his phone in bed. Wertkin, who pleaded guilty in 2017 and was sentenced to two and a half years in prison, wrote in a statement that the government’s reversal of fortune in the case had led him “to question things I never doubted before. Does the system even work?” At his sentencing hearing, a prosecutor argued that the False Claims Act itself was one of Wertkin’s victims. “The False Claims Act is incapable of deterring fraud if the Department of Justice can’t be trusted by whistleblowers,” she said. “We have no way of measuring what chilling impact there might be on whistleblowers based on what the defendant did in compromising their secrecy.”
On Sept. 9, 2019, the False Claims Act took a second hit when the U.S. Court of Appeals for the Eleventh Circuit published a long-anticipated ruling on the AseraCare case. The judges concurred with Bowdre that the government needed more than the testimony of an outside expert to prove a claim was false. However, they vacated Bowdre’s summary judgment, saying that the prosecution should have been able to present all its evidence, including AseraCare’s alleged “knowledge of falsity,” and sent the case back to her courtroom for a retrial. “When the goalpost gets moved in the final seconds of a game,” the judges wrote, “the team with the ball should, at the least, have one more opportunity to punch it into the endzone.”
The government did not appear enthusiastic about trying the AseraCare case for a second time before Bowdre, though. Wertkin had been disbarred and was serving his sentence, and some of his former colleagues had left for the private sector. In February, 2020, 11 years after Farmer and Richardson filed their complaint, the government reached a settlement with AseraCare for a million dollars. As in most such settlements, AseraCare paid the sum, admitted no wrongdoing and was allowed to keep billing Medicare. Jack Selden, a partner at Bradley Arant who worked on the defense team, told the trade journal Law360, “When a case settles for $1 million where the claims have been for over $200 million, I think that speaks for itself.”
From a certain point of view, Wertkin’s attempts to shake down government contractors made manifest the transactional logic that governs the False Claims Act. Even to some of their biggest beneficiaries, these qui-tam settlements have come to resemble a mutual-protection racket: Executives keep their jobs and their companies keep billing Medicare; whistleblowers and their lawyers get a cut; and Justice Department attorneys can cash in on their tough-on-fraud reputations by heading to white-shoe law firms to defend the companies they once prosecuted.
In 2020, not long after AseraCare settled with the government, the company was bought for $235 million by Amedisys, which was facing qui-tam troubles of its own. A nurse from an Amedisys office in South Carolina had filed a lawsuit accusing the corporation of admitting ineligible patients, falsifying paperwork and handing out bonuses to staff to entice new recruits. (Amedisys denies the allegations.) This time, the government has declined to join the nurse’s case.
Earlier this year, when I visited Farmer at her home in Alabama, boxes were piled in the living room. She was preparing for an upcoming move to Missouri, where her husband had taken a job with a nonprofit hospice and home health company. Farmer had remained close with Richardson, who told me: “I have a whole different view of justice in America now. It’s definitely powered by the dollar bill.” But the women no longer talked about the trial. “Nobody really cared,” Farmer said. “The government didn’t care, the judge didn’t care, and all of these people’s money was wasted.” Sitting in a plush reclining chair, Farmer let out a short, sharp cough as she spoke. In December, she had been diagnosed as having an aggressive form of breast cancer, and the chemotherapy had left her vulnerable to lingering infections.
The hospice benefit imposes a dichotomy between caring for the living and caring for the dying, when, in truth, the categories are often indistinguishable. Most older people will face a chronic disability or a disease in the last years of their life and will need extra care to remain safely at home. That help is rarely available, and Americans often end up in a social-welfare purgatory, forced to spend down their savings to become eligible for a government-funded aide or a nursing home bed. “We all think it’s not going to affect us, but if you have a stroke and go bankrupt you’re not just going to go out and shoot yourself in the desert,” Dr. Joanne Lynn, an elder-care advocate and a former medical officer at the Centers for Medicare and Medicaid Services, told me. Once you cross over into the kingdom of the sick, she said, it’s easier to see that some problems classified as hospice fraud are really problems of the inadequate long-term-care system in this country.
In the 1970s, Lynn worked at one of the first hospices in the United States. At the time, most of the patients had cancer and died within weeks; the six-month guidance was originally designed around their needs. Today, the majority of hospice patients have chronic illnesses, including heart disease and dementia. And some of them — regardless of whether they have six months or six years to live — depend on hospice for in-home support and holistic services that would otherwise be unavailable. Yet under the current system, as the number of patients with ambiguous prognoses rises, providers (including ethical ones) are under financial pressure to abandon those who don’t die quickly enough. It’s a typically American failure of imagination that people with dire but unpredictable declines are all but left for dead.
Elisabeth Kübler-Ross thought she understood why societies isolate the old and the dying: They remind the rest of us of our own mortality. This aversion might partly explain why decades of warnings about hospice care — including a full quarter century of pointedalerts from the inspector general’s office at the Department of Health and Human Services — have gone largely unheeded. Recently, though, some of the reports were so disturbing (maggots circling feeding tubes, crater-like bedsores) that members of Congress have called for reforms, and the Centers for Medicare and Medicaid Services is enacting a few. The agency has just begun making available to the public a greater range of data on hospice providers, including the average number of visits that nurses and social workers make in the last days of a person’s life. More significantly, the agency now has the power to impose fines on problem providers, should it choose to use it. (Previously, the agency’s only consequential penalty for bad hospices was to boot them from the Medicare program, an option it seldom exercised.)
Some state lawmakers, too, are asking deeper questions about end-of-life care. This year, in the wake of a Los Angeles Times investigation, California placed a moratorium on new hospices, and state auditors raised alarms about a raft of tiny new hospices, some with fictional patients and medical staff, that were engaged in “a large-scale, targeted effort to defraud Medicare.” In Los Angeles County alone, there are more than a thousand hospices, 99% of them for-profit. By comparison, Florida, which, unlike California, requires new providers to prove a need for their services, has 51 hospices.
But when regulators close a door they sometimes open a window. Licensing data I’ve reviewed suggests that, as scrutiny of end-of-life-care providers intensified in California, the hospice boom traveled eastward. In Clark County, which contains Las Vegas, the number of new hospices has more than doubled in the past two years, and in Harris County, which encompasses Houston, the number has grown almost as quickly. Sheila Clark, the president of the California Hospice and Palliative Care Association, attributed some of the surge in new licenses to a scheme called “churn and burn.”
“Providers open up a hospice and bill, bill, bill,” she said. Once that hospice is audited or reaches the Medicare-reimbursement limit, it shuts down, keeps the money, buys a pristine license that comes with a new Medicare billing number, transfers its patients over and rakes in the dollars again. The directors of two nonprofit hospices in the Southwest told me that they had been accepting patients who were fleeing such new providers. Some patients switched because while they were with the startup hospices they hadn’t seen a nurse in two weeks, and no one was answering the phone.
On a rainy morning in November, I found myself in a vast, sand-colored commercial plaza on the outskirts of Phoenix. The complex was designed in the style of a Spanish hacienda, with a central courtyard, a stone fountain and a stately bell tower. Maricopa County was another place where the number of hospices had doubled in two years; 33 new ones, licensing data indicated, had appeared at this single address. There was no building directory, but eventually I realized that most of the hospices were clustered together on the basement level. All the hospices listed the same phone number for inspectors to call, and some had taped the same apology to their door: “Sorry we missed you! We’ll be back in 45 mins, if you need immediate assistance pls call us.” Each time I called the listed number, I got an answering machine whose mailbox was full.
When I buzzed the Ring video doorbell of B-116, which housed at least nine hospices, I was told by the man who answered that the manager was currently on the other side of the building. When I walked to the other side and rang B-117, the same man picked up. Sensing my confusion, he said, “I’m just the voice at the door.” His name was Ted Garcia, and he had been hired to monitor the hospices from his laptop at home. I told him that I was searching for a registered nurse named Svetik Harutyunyan, who was listed as the CEO of multiple hospices in the neighborhood, among them Ruby, Sapphire and Garnet, which were within the complex, as well as Platinum, Bright Star and First Light, down the road. I told Garcia that I particularly wanted to ask Harutyunyan about Ruby Hospice, which I’d seen listed for sale in an online ad for a quarter of a million dollars.
The day before, I’d searched for her at a squat building in Los Angeles that had drawn auditors’ attention. That address holds, according to state records, 129 hospices — a tenth of the city’s supply. When I knocked on the door of a hospice that the licensing data had linked to Harutyunyan, a worker told me that no one by that name was involved. Later, when Harutyunyan and I spoke by phone, she acknowledged owning hospices in California and Arizona and said that the arrangement was legal. She had wanted every member of her family to have one, she said.
Garcia told me through the doorbell that, as far as he understood, the hospices he monitored weren’t seeing actual patients; instead, the offices were a kind of “holding pen” to keep the licenses viable with requisite physical addresses until demand could be drummed up. The remote work was dull, he allowed. Apart from inspectors occasionally stopping by and transient people defecating outside the doors at night, my visit was the most action he’d seen in months. As the rain let up and I sat in the deserted courtyard trying to decide which of Harutyunyan’s holdings to visit next, it occurred to me that this world of paper hospices — empty of patients, valued at six figures, watched over by virtual guards — might be the clearest expression of the industry’s untamed frontier that I was going to encounter.
Later that afternoon, Garcia told me that he’d begun to research whether he could open a hospice himself. The market was bigger and more lucrative than he’d realized. People in Montana and Texas and Tennessee, he said, were posting ads online for “turnkey-ready hospices” for as much as half a million dollars. He called an ex-cop he knew to see if he wanted in. “We can turn a profit and split it,” he said.
It’s open enrollment season again. From now through Dec. 7, about 65 million Americans are facing the annual question of which Medicare options will give them the best health coverage. An onslaught of television and radio ads, emailed promotions, texts and mailers serve as reminders, though not necessarily clarifying ones.
“It’s a very consequential decision, and the most important thing is to be informed,” said Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation and a co-author of a recent literature review comparing Medicare Advantage and traditional Medicare.
If you are navigating this decision for yourself or for a loved one, here are some of the important factors to consider.
Medicare — the federally funded health care program — has been in place since 1965. Since then, an expanding array of Medicare Advantage plans have become available. For 2023, the typical beneficiary can choose from 43 Advantage plans, the Kaiser Family Foundation has reported.
Medicare Advantage plans, like traditional Medicare, are funded by the federal government, but they are offered though private insurance companies, which receive a set payment for each enrollee. The idea is to help control costs by allowing these insurers, who must cover the same services as traditional Medicare, to keep some of the federal payment as profit if they can provide care less expensively.
The biggest providers of Advantage plans are Humana and United Healthcare, and they and others market aggressively to persuade seniors to sign up or switch plans. A new U.S. Senate report found that some of these Advantage plan practices are deceptive; for example, some marketing firms sent Medicare beneficiaries mailers made to look like government websites or letters. This has confused many seniors, and Medicare officials have promised to increased policing.
But the marketing has paid off for insurers. The proportion of eligible Medicare beneficiaries enrolled in Medicare Advantage plans has hit 48 percent. By next year, most beneficiaries will likely be Advantage enrollees.
Advantage plans offer simplicity. “It’s one-stop shopping,” she added. “You get your drug plan included, and you don’t need a separate supplemental policy,” the kind that traditional Medicare beneficiaries often buy, frequently called Medigap policies.
Medicare Advantage may appear cheaper, because many plans charge low or no monthly premiums. Unlike traditional Medicare, Advantage plans also cap out-of-pocket expenses. Next year, you’ll pay no more than $8,300 in in-network expenses, excluding drugs — or $12,450 with the kind of plan that permits you to also use out-of-network providers at higher costs.
Only about one-third of Advantage plans (called P.P.O.s, or preferred provider organizations) allow that choice, however. “Most plans operate like an H.M.O. — you can only go to contracted providers,” said David Lipschutz, the associate director of the Center for Medicare Advocacy.
Advantage enrollees may also be drawn to the plan by benefits that traditional Medicare can’t offer. “Vision, dental and hearing are the most popular,” Mr. Lipschutz said, but plans may also include gym memberships or transportation.
“We caution people to look at what the scope of the benefits actually are,” he added. “They can be limited, or not available, to everyone in the plan. Dental care might cover one cleaning and that’s it, or it may be broader.” Most Advantage enrollees who use these benefits still wind up paying most dental, vision or hearing costs out of pocket.
One big downside is that these insurers require “prior authorization,” or approval in advance, for many procedures, drugs or facilities.
“Your doctor or the facility says that you need more care” — in a hospital or nursing home, say — “but the plan says, ‘No, five days, or a week, two weeks, is fine,’” said David Lipschutz, the associate director of the Center for Medicare Advocacy. Then you must either forgo care or pay out of pocket.
Another report this spring by the inspector general’s office determined that 13 percent of services denied by Advantage plans met Medicare coverage rules and would have been approved under traditional Medicare.
Advantage plans can also be problematic if you are traveling or spending part of each year away from home. If you live in Philadelphia but get sick on vacation in Florida, all local providers may be out of network. Check to see how the plan you’re using or considering treats such situations.
“The big pro is that there are no networks,” Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation, said of traditional Medicare. “You can see any doctor that accepts Medicare,” as most do, and use any hospital or clinic. Traditional Medicare beneficiaries also largely avoid the delays and frustrations of prior authorization.
But traditional Medicare sets no cap on out-of-pocket expenses, and its 20 percent co-pay can add up quickly for hospitalizations or expensive tests and procedures. So most beneficiaries rely on supplemental insurance to cover those costs; either they buy a Medigap policy or they have supplementary coverage through an employer or Medicaid. Medigap policies are not inexpensive; a Kaiser Family Foundation survey found that they average $150 to $200 a month.
The Kaiser literature review found that traditional Medicare beneficiaries experienced fewer cost problems than Advantage beneficiaries if they had supplementary Medigap policies — but if they didn’t, they were more likely to report problems like delaying care for cost reasons or having trouble paying medical bills.
Traditional Medicare also provides somewhat better access to high-quality hospitals and nursing homes. David Meyers, a health services researcher at Brown University, and his colleagues have been tracking differences between original Medicare and Medicare Advantage for years, using data from millions of people.
In general, patients with high needs — people who were frail, limited in activities of daily living or had chronic conditions — were more apt to switch to traditional Medicare than those who were not high-need.
“When you’re healthier, you may run into fewer of the limitations of networks and prior authorization,” Dr. Meyers said. “When you have more complex needs, you come up against those more frequently.”
Another downside to traditional Medicare, though, is that it does not include drug coverage. For that, you need to buy a separate Part D plan.
Unlike most Medicare Advantage plans, traditional Medicare does not include drug coverage. For that, you must buy a separate Part D plan.
For 2023, beneficiaries can typically choose between 24 stand-alone Part D plans, at premiums that range from $6 to $111 a month and average $43 for policies available nationwide, said Juliette Cubanski, the deputy director of the program on Medicare policy at the Kaiser Family Foundation.
“If you’re the person who doesn’t take many medications or only uses generics, the best strategy might be to sign up for the plan with the lowest premium,” Dr. Cubanski said. “But if you take a lot of medications, the most important thing is whether the drugs you take, especially the most expensive ones, are covered by the plan.”
Different plans cover different drugs (which can change from year to year) and place them in different pricing tiers, so how much you pay for them varies. And, to make comparisons more dizzying, certain pharmacy chains are “preferred” by certain plans, so you could pay more at CVS than at Walmart for the same drug, or vice versa.
How does Part D work? First, most stand-alone plans have a deductible: $505 in 2023. You pay that amount out of pocket before coverage kicks in.
Then, a Part D plan, either stand-alone or as part of a Medicare Advantage plan, usually establishes five tiers for drugs. The cheapest two tiers, for generic drugs, could be free or run up to about $20 per prescription. Next comes a tier for preferred brand-name drugs, probably $30 to $45 per prescription in 2023.
Drugs on the next highest tier, for nonpreferred brand-name drugs, usually involve coinsurance — paying a percentage of the drug’s list price — rather than a flat co-pay. For national stand-alone plans, that ranges from 34 to 50 percent, Dr. Cubanski said.
Drugs that cost more than $830 a month are considered specialty drugs, the highest-priced tier. You only pay 25 percent of the price, but because these are so expensive, your costs rise.
Once your total drug costs reach $4,660 (for 2023), including out of pocket costs and what your plan paid, you have entered the so-called coverage gap phase and will pay 25 percent of the cost, regardless of tier.
Finally, when your costs reach $7,400 — including what you’ve paid, plus the value of manufacturer discounts — you have hit the threshold for catastrophic coverage. After that, you pay just 5 percent.
Switching between Medicare Advantage plans is fairly easy. But switching from traditional Medicare to an Advantage plan can cause a major problem: You relinquish your Medigap policy, if you had one. Then, if you later grow dissatisfied and want to switch back from Advantage to traditional Medicare, you may not be able to replace that policy. Medigap insurers can deny your application or charge high prices based on factors like pre-existing conditions.
(There are some exceptions. For instance, people who drop a Medigap policy to enroll in an Advantage plan for the first time can repurchase it, or buy another Medigap policy, if they switch back to traditional Medicare within a year.)
“Many people think they can try out Medicare Advantage for a while, but it’s not a two-way street,” said David Lipschutz, the associate director of the Center for Medicare Advocacy. Except in four states that guarantee Medigap coverage at set prices — New York, Massachusetts, Connecticut and Maine — “it’s one type of insurance that can discriminate against you based on your health,” he said.
In 2020, only 3 in 10 Medicare beneficiaries compared their current plans with others, a recent Kaiser Family Foundation survey reported. Even fewer beneficiaries changed plans, which might reflect consumer satisfaction — or the daunting task of trying to evaluate the pluses and minuses.
You will find plenty of information on the Medicare.gov website, including the Part D plan finder, where you can input the drugs you take and see which plan gives you the best and most economical coverage. The toll-free 1-800-MEDICARE number can also assist you.
These programs “are unbiased and don’t have a pecuniary interest in your decision making,” said David Lipschutz, the associate director of the Center for Medicare Advocacy. But their appointments tend to fill up quickly at this time of year, and the annual open enrollment period ends on Dec. 7. Don’t delay.
Altarum’s monthly Health Sector Economic Indicators (HSEI) briefs analyze the most recent data available on health sector spending, prices, employment, and utilization. Support for this work is provided by a grant from the Robert Wood Johnson Foundation. Below are highlights from the November 2022 briefs.
Health spending growth continues to lag GDP growth
National health spending in September 2022 grew by 4.4%, year over year.
Health spending in September 2022 is estimated to account for 17.4% of GDP, essentially identical to the August 2022 value, which was the lowest share since June 2015.
Nominal GDP in September 2022 was 8.9% higher than in September 2021 as GDP growth continues to outpace health spending growth.
The health spending share of GDP has declined from a recent high of 18.5% of GDP in December 2021, largely because of high economy-wide inflation.
Health care price growth remains moderate amid slowing economywide inflation
The Health Care Price Index (HCPI) increased by 2.9% year over year in October, up slightly from 2.8% a month earlier.
Economywide price growth slowed this month, as overall CPI inflation fell to 7.7% and PPI price growth fell to 8.0%. Services CPI growth (excluding health care) held steady at 7.0% year over year, while commodities inflation fell for a fourth straight month to 8.6%.
Among the major health care categories, price growth for dental care (5.4%), nursing home care (4.2%), and hospital services (3.5%) were above average, while physician services (0.3%) and prescription drug (2.2%) price growth were the slowest growing categories.
Growth in our implicit measure of utilization for September was the slowest it has been in 2022, down to 1.8% year-over-year growth from 2.2% a month prior in August.
Health care job growth remains strong while health care wage growth moderates
Health care job growth remained strong in October, with 52,600 jobs added. Health care has averaged 47,000 new jobs per month in 2022.
Most of the growth in health care jobs was in ambulatory care, which added 30,700 jobs in October. Hospitals added 10,800 jobs and nursing and residential care added 11,100 jobs.
The economy added 261,000 jobs in October, similar to August and September gains. The unemployment rate rose slightly to 3.7%.
Health care wage growth appears to be moderating. After peaking at 7.4% growth year over year in July, health care wages grew by 5.6% in September, nearer to economy-wide wage growth of 5.0%.
Wage growth fell across all three major health care settings: residential care wages grew at 7.7% compared to a peak of 11% in March 2022, hospital wages grew by 5.8% compared to a peak of 8.5% in June, and ambulatory care wages grew by 4.6% compared to a peak of 5.8% in July.
A storm of these proportions should demand not only crisis clinical measures, but also community prevention efforts. Yet instead of deploying public health strategies to weather the storm, the U.S. is abandoning them.
Even before the arrival of the so-called tripledemic, U.S. health systems were on the brink. But as the fall surge of illness threatens to capsize teetering hospitals, the will to deploy public health measures has also collapsed. Pediatricians are declaring “This is our March 2020” and issuing pleas for help while public health efforts to flatten the curve and reduce transmission rates of Covid-19 — or any infectious disease — have effectively evaporated. Unmanageable patient volumes are seen as inevitable, or billed as the predictable outcome of an “immunity debt,” despite considerable uncertainty surrounding the scientific underpinnings and practical utility of this concept.
The Covid-19 pandemic should have left us better prepared for this moment. It helped the public to understand that respiratory viruses primarily spread through shared indoor air. Public health practices to stop the spread of Covid-19 — such as masking, moving activities outdoors, and limiting large gatherings during surges — were incorporated into the daily routines of many Americans. RSV and flu are also much less transmissible than Covid-19, making them easier to control with common-sense public health practices.
Instead of dialing up those first-line practices as pediatric ICUs overflow and classrooms close, though, the U.S. is relying on its precious and fragile last lines of defense to combat the tripledemic: health care professionals and medical facilities.
Warnings and advisories recently issued by U.S. public health leaders, clinical leaders, politicians, and the media have consistently neglected to mention masking as a powerful short-term public health strategy that can blunt the surge of viral illness. Instead, recent guidance has exclusively promoted handwashing and cough etiquette. These recommendations run counter to recent calls to build on improved understanding of the transmission of respiratory viruses.
In the U.S.’s efforts to “move on” from thinking about Covid, it has created a “new normal” that is deeply abnormal — one in which we normalize resorting to crisis measures, such as treating patients in tents, instead of using common-sense public health strategies. Treating Covid like the flu — or the flu like Covid — has effectively meant that we treat neither illness as if it were a serious threat to health systems and to public health. Mobilizing Department of Defense troops and Federal Emergency Management Agency personnel to cover health system shortfalls is apparently more palatable than asking people to wear masks.
The tripledemic has already claimed its first child deaths in the U.S., adding to a large ongoing death toll from Covid. Allowing health systems to reach the brink of collapse will lead to many more preventable deaths among pediatric and other vulnerable patients who can’t access the care they need.
By any accounting, these losses are shocking and tragic. But they should strike us as particularly abhorrent and shameful because the tripledemic is a crisis that leaders, health agencies, and institutions have, in a sense, chosen. Over the past year, the Biden administration and its allies have repeatedly encouraged the public to stand down on public health measures, with the President even stating in September that “the pandemic is over.” By moving real risks out of view and failing to push for more robust measures to mitigate Covid, these messages have put the country on a path to its present circumstances, in which pediatric RSV patients are transferred to hospitals hundreds of miles away because there is no capacity to treat them in their own communities.
Living with viruses should mean embracing simple public health measures rather than learning to live with staggering levels of illness and death. Leaders in public health and medicine should issue timely and appropriate guidance that reflects the latest science instead of second-guessing the prevailing winds in public opinion. Instead of self-censoring their recommendations out of fear of political consequences, they should continue to promote the full range of public health strategies, including masking in crowded indoor public places during surges.
The tripledemic should bring renewed urgency to policies that will reduce the toll of seasonal illness on health, education, and the economy. Improvements in indoor air quality in public spaces, including schools, child care centers, and workplaces, can limit the spread of diseases and have many demonstrated health and economic benefits, yet the U.S. continues to lack standards to guide infrastructure or workplace safety standards. Paid leave enabling workers to stay home when they are ill can reduce the transmission of disease as well as loss of income, yet the U.S. is one of the only high-income countries without universal paid sick leave or family medical leave.
Greater effort must also be made to increase vaccination coverage for flu and Covid and bring an RSV vaccine online as quickly as possible. Only about half of high-risk adults under 65 received a flu shot last year, a gap that can be closed with more energetic vaccination campaigns. Reducing annual flu deaths using a broader range of strategies enabled by the pandemic — rather than pegging Covid deaths to them — should be the goal.
Amid the many sobering stories of the tripledemic, there is some good news. As the experience of Covid-19 has shown, it is possible to limit the toll of respiratory viruses like flu and RSV. However, this work requires resources, appropriate policies, and political will. Americans don’t need to accept winter disease surges and overrun health systems as an inevitable new normal. Instead, the country should see the tripledemic as a call to reinvigorate public health strategies in response to these threats to the health of our communities.