Legitimate Hospices 'Presumed Guilty' as AI-Driven Fraud Enforcement Expands

Federal and regulatory agencies are deploying artificial intelligence, machine learning, and advanced data analytics to combat hospice fraud, but legal experts warn that legitimate providers may not survive the unintended consequences of data-driven oversight, according to Hospice News.

Program integrity issues escalated as droves of new providers entered certain states, with some facilitating "license flipping" — selling Medicare licenses soon after obtaining them. Initial fraud hotspots included Arizona, California, Nevada, and Texas, later joined by Georgia and Ohio.

Regulators are using the CMS Fraud Prevention System, FBI and HHS Office of Inspector General algorithms, and data that examines patterns of hospice ownership, managing employees, and clinical staffing. Medical directors have come under scrutiny, and one affiliated with a suspected malfeasant company can be deemed a fraud risk and trigger license revocation.

Howard Young, partner at Morgan, Lewis & Bockius, said data-driven efforts have had a "cascading effect" on high-quality providers, with some hospices going out of business following license revocations that often carry a 10-year ban on re-enrollment. Edo Banach of Foley Hoag said smaller hospices are at a significant disadvantage and argued the effort has uniquely targeted less sophisticated providers.

Esperance Becton of Sheppard Mullin said compliance is now about understanding what the data may be telling regulators and being prepared to explain it, calling for stronger program integrity to be balanced with continued access to hospice care for patients with greater needs.