Hospices slammed again in the press

Fees for hospice referrals called'unseemly'

In June, another front-page story in a major U.S. newspaper1 tarred the hospice industry with allegations of fraud and patient exploitation. Following a similar piece in the New York Times (see Hospice Management Advisor, July 1998, p. 88), the Washington Post rehashed familiar issues such as the industry's rapid growth, Operation Restore Trust scrutiny, abuses in Puerto Rican hospices, fraud charges against the former owner of an Illinois hospice, and the second life of Vitas Healthcare Corporation CEO Hugh Westbrook as a prominent Democratic campaign contributor.

But mostly Post investigative reporter Charles Babcock found a "kind of innocence lost" in a movement that has turned into a "competitive industry," with "dog-eat-dog, dirty, competitive fighting" that threatens the survival of small hospice operators. He featured a Hospice of Michi gan patient who, a company spokesperson acknow l edges, was denied covered services that should have been made available. Perhaps the biggest club used by the reporter for bashing the hospice industry is the practice by some proprietary hospices of paying sales commissions or finders' fees to sales agents for "recruiting the doomed."

Vitas' former practice of paying commissions based on how long patients remained in hospice, criticized by the Office of Inspector General, has been abandoned, Babcock reports. However, the Miami-based proprietary hospice chain, the country's largest hospice provider with operations in nine states, still pays commissions, although it refuses to reveal how they are calculated.

Barry Smith, CEO of Phoenix-based VistaCare, states in the article, "On the one hand, you want to be zealous about getting the message out. On the other hand, you don't want to be a salesman. It's unseemly to sell death." VistaCare also pays commissions for hospice admissions. The Post article also quoted Philadelphia internist Raymond Urbanski, MD, who said he was not aware that his hospice referrals to Vitas generated commissions for the company's sales rep. "But as long as family members call back saying they received good care, I'll keep using them," he said.

"What was published in the Washington Post wasn't new, but there was innuendo in it that didn't need to be there," says Vitas chief patient care officer J.R. Williams, MD. "But he's an investigative reporter. He frequently does pretty tough stories. As things go, it's not really a bad story. We're not pleased with it," but it's the price of being the industry's largest provider," Williams says.

He says all Vitas admission decisions are made by salaried clinicians with no finan cial incentive to pump up admissions. More than 7,000 of the 34,000 patients referred to Vitas in 1997 were turned away, some because the clinical assessment concluded they were not terminally ill. "Hospice sales reps, who generate the referrals, are paid incentives," Williams says. "I know there's sensitivity about that in the industry. We believe we're doing the right thing, and it's legal. If you're going to attract qualified, highly skilled individuals to this position, you have to pay a competitive package."


1. Babcock CR. Hospice big business, thanks to Medicare. Washington Post, June 14, 1998, p. A1. n