Bloomberg News

Death’s Door Opens Slowly as Hospice Bill Hits $ Gary Putka

July 22, 2011

July 22 (Bloomberg) -- With his mother wheezing and losing consciousness in a California nursing home, Robert Rogers wanted her moved to a hospital. Vitas Healthcare, her hospice provider, said that wasn’t in the plan.

“Our job is not to prepare them to live,” a Vitas nurse told Rogers on the phone, according to a deposition he gave in April. “Our job is to prepare them to die.”

Rogers called 911. At the hospital, an emergency-room doctor removed 11 maggots from an open wound on his mother’s big toe. Five days later, in September 2008, 91-year-old Thelma Covington died of a sepsis infection brought on by gangrene in her toe and poor circulation, her death certificate said.

Rogers is suing Vitas, a unit of Cincinnati-based Chemed Corp., in a California court for alleged elder abuse and wrongful death. Vitas, the biggest company in hospice care, has denied negligence and said that Covington and Rogers knew the risk involved in entering hospice. Ninety-five percent of Vitas care gets positive family ratings in surveys, said Kal Mistry, a company spokeswoman.

As hospice care has evolved from its charitable roots into a $14 billion business run mostly for profit, patients like Covington and their families have paid a steep price, according to lawsuits and federal investigations. Providers have been accused of boosting their revenues with patients who aren’t near death and not eligible for hospice -- people healthy enough to live a long time with traditional medical care. In hospices, patients give up their rights to “curative” measures because they are presumed to be futile.

Widespread Neglect

“By admitting these folks to hospice, they are denied access to routine medical and rehabilitative care that they need to extend and improve their lives,” said Cristen Krebs, executive director of Catholic Hospice of Pittsburgh, a non- profit. “A vulnerable and voiceless population is preyed upon for money.”

At the same time, patients are being neglected, according to the claims in the lawsuits, government court filings and interviews with more than 30 people who have worked in the industry or had relatives in hospice. In 2009, a Medicare oversight report found nearly a third of hospice patients were not getting services in care plans that describe the treatment and visits providers promise to give them.

More than four in 10 Americans now meet their end in hospice care, drawn by its promise of palliation and pain alleviation instead of extreme measures in their waning days. Medicare’s hospice rolls doubled to 1.1 million patients from 2000 to 2009, the last year of available data.

‘So Caring’

The expansion “has been excellent for patients,” improving care for a large underserved population, said J. Donald Schumacher, president of the National Hospice & Palliative Care Organization, an Alexandria, Virginia-based trade group. Studies by Brown University researchers and others have found families whose relatives died in hospice are more satisfied with care than those whose loved ones passed away under conventional care.

William Susdorf of Rancho Mirage, California, suffered from inoperable intestinal cancer and received home hospice care from Vitas for six months before he died in May, said his wife Dorothy. Susdorf, 85, a retired auto-leasing executive, developed a strong bond with his nurses and his Vitas chaplain, whom he asked to deliver his funeral eulogy, his widow said. Vitas “couldn’t have been nicer to us; they were just so caring,” she said.

Whistleblower Suits

The government is investigating whether Vitas “engaged in an extensive scheme” to “defraud the Medicare and Medicaid programs of potentially hundreds of millions of dollars” by falsifying records and hospice certifications, and billing for services it didn’t deliver, the U.S. Attorney in Dallas said in a federal court filing that drew little attention last November. The company, which expects $1 billion in revenue this year, is following Medicare and Medicaid rules, according to its regulatory filings.

New federal hospice investigations rose 50 percent between 2008 and 2010, according to Gerald Roy, deputy inspector general at the U.S. Department of Health and Human Services, which oversees Medicare spending. More than 30 cases were opened last year on the heels of whistleblower suits by former hospice workers and others alleging Medicare fraud, according to federal officials who asked not to be named because many of the cases are sealed.

Facing Investigations

An executive of a hospice owned by Harden Healthcare LLC emailed managers in 2008 urging them to “stop all these live discharges” of patients to keep enrollments high, according to a civil fraud complaint by the Justice Department in federal court in Kansas City, Kansas. Company spokeswoman Meg Meo said the alleged events occurred before Austin, Texas-based Harden owned the hospice.

A whistleblower lawsuit brought by a former social worker for hospices run by Atlanta-based Gentiva Health Services Inc. said her job was to talk people who weren’t dying into believing that they were. The allegations predated Gentiva’s ownership of the chain, spokesman Scott Cianciulli said.

Gentiva’s Odyssey hospice unit faces investigations by HHS’s Office of Inspector General and the state of Georgia, according to regulatory filings. The company, which is the second-largest hospice provider, is cooperating with investigators, Cianciulli said.

Unconditional Resistance

Hospice got its start in the 1960s as a social movement. Volunteers, often meeting in schools and church basements, organized care so patients could die at home with loved ones, instead of at the hospital laced with tubes. Dame Cicely Saunders, the pioneering English physician who opened St. Christopher’s Hospice in London in 1967, fought traditional methods of unconditional resistance to death, and brought the concept to U.S. shores.

The government’s suspicions about providers have been fueled by rising costs and lengthier patient stays. During the 2000-2009 period when Medicare patients doubled, the government’s bill quadrupled to $12 billion.

The average for-profit patient costs the government $12,609, 29 percent more than a non-profit patient, because the for-profits find people who live longer, frequently at nursing homes, the OIG reported on Tuesday. Of the hospices with two- thirds or more of their patients in nursing homes, 72 percent are for-profits. A majority of patients receive their hospice care at home.

Longer Stays

Two-thirds of patients in hospices run for profit have general diagnoses like “failure to thrive” and “debility” compared to half in non-profits, which cater more to faster- killing conditions like cancer, a Harvard University study found earlier this year. Patients stay an average of 98 days in for- profit hospices versus 68 days at non-profits, which have a 0.2 percent profit margin, according to Medicare. The margin at for- profits is 50 times higher at 10 percent.

“Long stays on hospice subvert the intent of the program and suggest a pattern of behavior that needs to be investigated,” said Robert Berenson, a fellow at the Urban Institute in Washington and vice chairman of the Medicare Payment Advisory Commission, or Medpac, which advises Congress on health care policy.

Robert Stone, assistant medical director at Indiana University’s Bloomington Hospital Hospice, sees an “inherent conflict” between the profit motive and providing the best hospice services.

“Hospice is undergoing a radical change in its soul to a for-profit business,” he said.

Bonuses, Kickbacks

To be eligible for Medicare hospice coverage, a person must have a prognosis of six months or less to live, certified by two doctors. Yet 20 percent of hospice patients live beyond that term, with their providers receiving government checks via recertifications that can go on indefinitely.

Enrolling patients, retaining them as long as possible, and controlling costs are the top priorities at for-profit hospices, according to former and current employees interviewed by Bloomberg News. To increase revenues, hospices tie employee bonuses to enrollment, pay kickbacks to patients and referral sources, and use false diagnoses to admit ineligible patients, according to whistleblower, or qui tam, suits against three chains filed under the False Claims Act, which allows plaintiffs to share in any financial recovery for the government.

One of the suits was filed by Misty Wall, a former social worker at Gentiva’s VistaCare hospice unit who said she was fired in 2005. Wall was assigned to convince people who weren’t dying that they were, she said in an interview.

‘Selling Feature’

Wall, now an assistant professor of social work at Boise State University in Idaho, said one woman broke down in tears when Wall suggested her father was dying from renal failure. The man’s own doctor had declined to recommend hospice, prescribing dialysis instead. Wall said VistaCare sent her to the daughter to change the family’s mind.

“I gave her this huge emotional blow, then sat there and soothed her,” Wall said. “Of course she signed.”

Wall’s lawyer, Loren Jacobson, said, “It wasn’t her idea. She did it because that was what was expected of her as part of her job, and when she refused to do it anymore and complained, she was fired.” Jacobsen called her client “an extremely good soul stuck in a bad situation.”

Wall’s lawsuit, filed in federal court in Dallas, accuses VistaCare of paying illegal kickbacks to patients and nursing- home employees who referred residents to hospice. It also accuses VistaCare of doctor shopping to get patients certified.

As part of its sales pitch, the hospice told prospects, “The VistaCare Foundation is here to make all your dreams come true,” Wall said. “We used it as a selling feature.”

‘Lay Opinion’

VistaCare gave hospice patients cash and gift cards for groceries, household bills and a wheelchair ramp, the suit alleges. Wall said she sent patients on gambling and beach holidays with VistaCare funds, and paid for a furloughed prison inmate to visit his mother in hospice care.

Weight gain by patients with diagnoses like “debility” and “failure to thrive” is a red flag to Medicare auditors checking eligibility for hospice, she said, so VistaCare would reduce visits to these patients by staffers who fed them “to see if the weight would come back off to keep them on hospice.”

Federal law leaves hospice certification “solely to the discretion” of doctors, so Wall’s “lay opinion” that admitted patients were ineligible is irrelevant, VistaCare said in a motion to dismiss her claims in March. The motion said there was nothing wrong with giving hospice patients money or goods.

Roto-Rooter

The judge allowed Wall’s kickback claim to go forward, dismissed 11 other claims and allowed three of them, including the ineligibility and undelivered care accusations, to be resubmitted in an amended complaint, which the company is also seeking to dismiss.

VistaCare is a unit of Odyssey Healthcare, which runs hospices in 30 states and was bought by Gentiva last year for $1.09 billion. Gentiva, the second-largest hospice provider, had net income of $52.7 million on revenue of $1.45 billion in 2010. Vitas’s average patient stay is 79 days; Gentiva’s is 92 days.

Kevin J. McNamara, the CEO of Chemed, told analysts in January the key to making money in hospice is minimizing labor costs and increasing back-office efficiency. Vitas expects to boost profitability without affecting “the care we provide at the bedside,” he said.

Vitas’s arc to the top of the industry began when its purchase by Chemed was completed in 2004. The prospects in hospice quickly overshadowed the company’s other operating unit -- the Roto-Rooter drain-cleaning and plumbing chain. With Chemed in command, Vitas acquired hospices in Atlanta, Pittsburgh, the Philadelphia area and Birmingham, and opened new branches in 11 states.

No Overtime

Chemed earned $81.8 million last year on $1.28 billion in revenue, with Vitas and its 58,000 patients responsible for 98 percent of profits. The company’s 5.5 weekly visits to patients tops the industry average by 20 percent, according to Mistry.

Vitas’s efforts to save money on labor has hurt patients, former employees and patients’ relatives said. In 2006, the company paid $19 million to settle a class-action suit filed by nurses, home-health aides and social workers in Southern California. They claimed Vitas refused to pay overtime for the hours needed to visit scheduled patients and didn’t allow lunch or rest breaks. After the settlement, in which the company admitted no wrongdoing, Vitas started new policies for employees to document hours worked, according to Mistry.

‘Terminal Agitation’

Employees still can’t meet care obligations because of overtime restrictions, said Mark Wasley, a former Vitas nurse in Palm Springs, California. Wasley, in an interview, gave an account of events on a late shift in 2010 when Vitas dispatched him to a patient in “terminal agitation,” a state of restlessness that grips some people just before death.

After driving 75 minutes across the desert, he found the woman ripping off her nightclothes and her husband and son arguing about what to do. He settled her with morphine. At 3:30 a.m., his shift nearly over, Wasley said he asked for permission to stay until the woman died.

Vitas ordered him home and turned down his request for a chaplain or social worker to replace him at the bedside, Wasley said, because the company didn’t want to pay him the overtime rate of $76 an hour. Wasley said Vitas also nixed his offer to stay for free. He said he learned the patient died an hour or two later.

“They talk about one-on-one care, but they don’t really want it,” according to Wasley, who said he quit last year, upset with the company’s practices.

Left Alone

Vitas immediately addresses “unsafe, unfair or unprofessional” situations identified by employees internally, said Mistry, the Vitas spokeswoman. She declined to address the specifics of Wasley’s account.

The night before his father died last year in hospice care, Barry Burdick said a nurse told him his dad, who had prostate cancer, was comfortable, so Burdick went home. The next morning he learned his father had died while his mother, who has Parkinson’s disease, was lying beside him calling her husband’s name, Burdick said.

Vitas, which was providing hospice care for the couple, had left her alone with the body, Burdick said he was told by nursing home employees.

Sharon Hill, a former Vitas team manager, said she remembers the angry call from the nursing home asking why no one from Vitas had attended the death, listed among the standards of care of the industry trade group. At the time, one Vitas nurse was on vacation and another was out sick while a substitute had eight patients to see, Hill said.

Seeking Help

“It was a horrific situation because hospice promises it will be there at a time of death,” said Hill, now working for another hospice in Palm Springs.

Mistry said Burdick’s account was inaccurate and declined to elaborate.

Burdick, a fifth-grade teacher in Delhi, California, said he revoked Vitas’s care for his mother and moved her to another facility without hospice, where she has gained 12 pounds in the past 14 months and is thriving.

In 2009, Vitas settled a lawsuit brought by survivors of Frank Todd, a retired banker who stayed at the Sunrise at Canyon Crest assisted-living home in Riverside, California. Vitas admitted him without consent and caused his death by giving him an inappropriate drug, according to the plaintiffs, including Todd’s stepdaughter Susan Freeman.

Vitas saleswoman Lori Scott said she heard about Todd from a Sunrise official who told her Freeman, Todd’s designee for making his medical decisions, was seeking more help for her dad. Scott said in a deposition she visited Todd’s doctor and obtained a prescription for a hospice evaluation.

Scopolamine Patch

Within 48 hours, he was enrolled in hospice care with a diagnosis of terminal “cerebral degeneration,” the plaintiffs said. Freeman said she never gave her consent, and Scott’s deposition acknowledged she didn’t notify Freeman of the admission. Vitas’s legal responses said a nurse obtained oral consent from Freeman.

On Todd’s first day in hospice, a Vitas nurse gave him a Scopolamine patch to treat his drooling. Three days later, he was hospitalized after several falls “with an altered level of consciousness,” Vitas court filings said. The label for Scopolamine, used often to control nausea, warns that elderly patients may suffer neurological side effects that can cause psychosis, confusion, agitation and delusions.

Crossword Puzzles

Freeman withdrew her stepfather from Vitas’s care and said the company had behaved like a “used car salesman,” according to an internal Vitas memo submitted to the court. Todd’s health spiraled downward and he died three weeks later.

Vitas’s court filings denied Scopolamine caused his demise and said the drug is commonly given to hospice patients to keep them from choking on their saliva.

Vitas admitted Thelma Covington to hospice in November 2007, taking over her medical care at Willow Pass Healthcare Center in Concord, California. Her son, Robert Rogers, who had Covington’s power of attorney, said a Vitas salesperson called him and offered help so he wouldn’t have to be there so much.

Rogers said he didn’t know he was giving up rights to curative care when he signed his mother up for hospice, and wouldn’t have done so if he did. He said he “didn’t read the fine print” and gave his consent because he was told there would be more people looking after her, taking a load off him.

He described her as alert on his visits, doing crossword puzzles, discussing movies and enjoying the Kentucky Fried Chicken he brought her.

Ointment Treatment

The Vitas admission assessment for Covington said she was terminally ill with “debility, unspecified” and had various other conditions, including dementia, congestive heart failure and diabetes. Two doctors certified that she had less than six months to live.

“She didn’t have no dementia,” Rogers said.

No one said anything about his mother’s life expectancy, according to Rogers, 75, a retired longshoreman and Covington’s only child. For 10 months, Medicare paid Vitas $199 a day to provide palliative care for her at Willow Pass, bills show.

On July 9, 2008, two months before her death, a Vitas doctor ordered a two-week cleansing and ointment treatment for an open wound on Covington’s toe, medical records show. The treatment was never carried out because the plan wasn’t placed in the “treatment administrative record” that the nursing home used to implement orders, according to a deposition by Jennifer Bernal, one of Covington’s Willow Pass nurses. She called it “a serious nursing error.”

In Agony

Nevertheless, Vitas “discontinued” the toe treatment on July 28, according to notes written by one of its nurses, who added “course complete.”

Two days later, Covington was in agony from the wound; a Vitas nurse assessed her pain at level 10 on a 10-point severity index, records show. She was given morphine and a sedative.

On Aug. 25, a nursing home employee noted in a “skin condition report” that the toe was scabrous, swollen, contained pus and had developed black “eschar” -- dead tissue that’s a sign of gangrene. “Hospice notified,” the report said.

Vitas’s notes on the toe for Aug. 25 and Aug. 27 again said “interventions effective, continue plan.” On Sept. 5, a Vitas nurse described “soft black eschar” on the toe. By then, Covington was in such pain from the wound that she lay moaning, “Lo[r]d have mercy,” a Vitas nurse noted.

On the morning of Sept. 7, a Vitas nurse discovered the gangrene and maggots, conferred with a Vitas doctor, washed the toe and wrapped it in plastic, according to nursing notes.

‘Comfort Care’

Rogers said in his deposition that he learned of the maggots later that day from the emergency-room doctor.

When Covington regained consciousness, “I told her, ‘When you get better, I’m taking you home with me,” Rogers testified. She died two days later.

In its court filings, Vitas has yet to address all of Rogers’s neglect allegations.

“The purpose of hospice care is not curative care. It is comfort care,” it argued in an unsuccessful effort to dismiss some of his claims in March. “Accordingly, the fact that [Covington] had conditions which were not ‘cured’ or in fact worsened and she died is not unexpected or unanticipated in a hospice situation. It is not reckless elder abuse.”

--Editors: Gary Putka, Anne Reifenberg

To contact the reporter responsible for this story: Peter Waldman in San Francisco at pwaldman@bloomberg.net

To contact the editor responsible for this story: Gary Putka at gputka@bloomberg.net


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