Hospice Unbundling Fraud: Billing Medicare Again for Related Care

Hospice unbundling fraud occurs when providers knowingly bill Medicare separately for related care already covered by the hospice’s daily payment. The hospice keeps its payment while a pharmacy, equipment supplier or another healthcare provider sends Medicare a second bill. The cost lands on taxpayers, and sometimes on the patient’s family. For an insider, the revealing instruction may be to bill another program for something the hospice was supposed to cover. The question runs through the patient’s care plan, the hospice’s coverage decision and the bill that followed.

This form of hospice fraud turns on who accepted responsibility for the care and who ultimately paid.

The Daily Payment Includes the Cost of Related Care

Medicare pays hospices by the day and level of care during a patient’s election. That payment covers the hospice’s responsibility for managing the terminal illness and related conditions, including nursing, pain and symptom medications, equipment and supplies. A hospice can arrange for another provider to furnish covered services while retaining responsibility for them.

The Centers for Medicare & Medicaid Services hospice benefit manual connects those services to an individualized plan of care. The plan begins with the patient’s assessment and develops as the hospice learns more about the patient’s needs. It gives a biller or clinician something concrete to compare with an instruction that the hospice will not pay for a drug or service.

Payment continues on enrolled days when no visit occurs. The business therefore earns revenue by the day while its costs depend on the care the patient needs. Hospice costs are highest at admission and near death, and lower in between. Moving a covered expense out of the hospice’s accounts lets it keep more of that daily payment while someone else pays for the care.

The hospice billing question here concerns the contents of the payment. The hospice’s claim and the outside provider’s claim have to be read against the same care obligation.

What Is Not Covered Under Hospice?

Care for a condition completely unrelated to the terminal illness falls outside the hospice payment and remains available through Medicare when the patient meets its coverage requirements. The hospice election directs payment for terminal-illness care and related conditions through the hospice, with defined exceptions for attending-physician services.

Relatedness reaches beyond the principal diagnosis. In its 2026 final rule, the Centers for Medicare & Medicaid Services says coverage decisions must consider the patient’s condition at admission, other conditions, current clinical information and the patient’s goals. A different diagnosis on an outside claim still needs a clinical explanation for why that care falls outside the hospice’s responsibility.

For hospice related care billed outside the per diem, the decisive connection is between the patient’s needs and the particular item or service. What condition did the drug treat? What symptom did the equipment relieve? What did the hospice’s care team say about that need before the outside bill appeared? These are questions we work through with the clinicians and billing staff who know the patient and the payment decisions.

When Do I Need a Hospice Election Statement Addendum?

For hospice elections beginning on or after October 1, 2026, the hospice must put its exclusions in a written election statement addendum within the first five days of the election’s effective date. That gives an insider the hospice’s stated reasons to compare with the patient’s care plan.

The addendum identifies conditions, items, services and drugs the hospice considers unrelated, with a clinical explanation the patient or representative can understand. The patient’s signature acknowledges receipt, not agreement that the excluded care was unrelated. We compare that explanation with what the care team actually assessed, prescribed and arranged.

Who Bills Medicare When Another Provider Supplies the Care?

Hospice receives its payment under Part A. Outside medical claims can reach Parts A and B, and prescription claims can reach Part D. The payment route depends on the service, its relationship to the terminal illness and the provider’s role.

Physician Services and the Attending-Physician Exception

An independent attending physician can bill separately for covered services when the physician is neither employed by the hospice nor paid by it for those services. A hospice-employed or contracted attending physician’s covered services can instead appear as a separate line on the hospice’s Part A claim.

Nursing work by a nurse practitioner who is not the patient’s attending physician belongs in the daily payment, including pain assessment and medication administration. The required face-to-face certification visit itself is administrative and not billable. Reasonable and necessary patient care during that visit can be billable when provided by a hospice physician or a hospice nurse practitioner who is also the patient’s attending physician.

Pharmacy Claims and the Patient’s Bill

Related drugs used for pain relief and symptom control belong within hospice coverage. The manual includes prescription and over-the-counter drugs, equipment for use at home, and medical supplies in the written care plan. The question for a pharmacy or supplier is who accepted responsibility for the particular item supplied to that patient.

A Part D prescription claim and the hospice’s drug decision can describe the same treatment from opposite sides. The dispensing record shows what the pharmacy supplied. The hospice record explains the condition it was treating and why the hospice accepted or refused the expense. The same comparison applies to durable medical equipment and supplies billed outside the hospice arrangement.

The purpose of a drug can change as care changes. The Centers for Medicare & Medicaid Services explains that medications previously used to treat or cure a condition may continue during hospice because they now provide symptom relief. A prescription carried forward from before hospice enrollment still needs to be understood in the patient’s current care plan. The drug’s use for comfort can bring it within the hospice’s responsibility.

An outside invoice also can reach the patient. In a complaint against Agape Senior Community, whistleblowers alleged that patients or families received and paid medical and pharmacy invoices from the defendants while federal hospice payments continued for the same period. The allegation puts the cost on the family as well as the government. It also identifies the documents that connect the charges: the invoice, the services supplied and the dates hospice was being paid.

What Is Medicare Fraud for Hospice Supplies?

Medicare fraud for hospice supplies occurs when a provider knowingly bills separately for equipment or supplies already covered by the hospice payment. The hospice’s responsibility includes supplies in the written plan of care used to manage the terminal illness or related conditions. The supplier’s itemized bill identifies what was provided, while the care plan explains the need it served.

The GW modifier on a non-institutional Medicare claim marks services as unrelated to the terminal illness and related conditions. In the final rule, CMS reported commenters’ concerns that GW bypass mechanisms let claims proceed without examining that meaning. The modifier makes the claim’s assertion explicit: the care sits outside the hospice’s responsibility.

Wound care makes that connection particularly important. The final rule describes skin breakdown in terminally ill patients whose weakened condition limits their mobility. It questions why hospices would send needed pressure-ulcer care outside their coverage, including a skin substitute where appropriate. The patient’s wound, mobility and comfort needs belong beside the product and its bill when we examine why the hospice treated the expense as unrelated. That clinical explanation connects the product claim to the hospice’s care obligation.

Hospital and Outpatient Care

The hospice can arrange short-term inpatient care for pain control and symptom management that cannot feasibly be provided elsewhere. That arrangement carries a different payment responsibility from an outside hospital claim for unrelated treatment. The hospital record, hospice care plan and provider agreement connect the reason for the stay to the bill.

The Centers for Medicare & Medicaid Services describes the operational problem directly in its final rule. Outside providers reported that hospices told them to bill Medicare Parts A and B, failed to pay for services within the hospice’s responsibility, or did not respond to payment requests. The agency also heard from hospices that did not know patients had received outside care.

The instruction to send the bill elsewhere matters. So does the clinical information available to the person who gave it. That connection is where an ordinary-looking claim can reveal a decision to shift a covered cost.

Nursing Facilities and Assisted Living

A nursing facility’s written agreement with the hospice leaves the hospice responsible for managing hospice care and the facility responsible for room and board. That division matters when both providers bill for the same care.

In its 2015 study, the Department of Health and Human Services Office of Inspector General found longer hospice stays and higher payments for assisted-living residents than for beneficiaries in other settings. Those residents often had diagnoses requiring less complex care. The payment incentive was plain:

The complaint involving LifePath Hospice and Good Shepherd Hospice described an alleged overlap in who billed for residents’ care:

That allegation connects the hospice payment to identifiable services supplied and billed by the facility. The financial arrangement is also important when a provider pays for services to win hospice referrals. Who received the benefit, who sent patients and who billed for their care are connected questions with different answers in the records.

Cost Shifting Can Start With a Discharge Decision

Hospice cost shifting can move an expense outside the benefit by changing the patient’s enrollment before expensive care begins.

In a complaint involving Curo Health Services, whistleblowers alleged that employees caused patients to take purportedly voluntary discharges before expensive hospital visits to move those costs away from the hospice company. The alleged mechanism changed which benefit would pay for the upcoming care.

In Hospice Medicare Margins, a 2019 report commissioned by the National Partnership for Hospice Innovation, Milliman found higher Medicare Part A costs after live discharge from for-profit hospices. Its comparison of spending after discharge in 2017 found average daily costs more than 40% higher than after discharge from nonprofit hospices during both the first seven days and the first fourteen days.

The study follows the expense beyond the hospice claim. The complaint identifies a decision an insider may have witnessed before the hospital claim existed. We examine that sequence with the people who know why the discharge occurred: the anticipated treatment, the recorded reason for leaving hospice and the instructions that preceded it.

What Does OIG’s $6.6 Billion in Hospice Nonhospice Spending Mean?

Medicare paid outside providers for items and services furnished to hospice beneficiaries over ten years while also paying for their hospice care. The Inspector General’s report called for increased oversight of those nonhospice payments. When an outside bill covers care already included in the hospice payment, Medicare pays twice.

The Centers for Medicare & Medicaid Services found over $2.8 billion in outside spending under Parts A, B and D during hospice elections in fiscal year 2024. It also identified $510 million in beneficiary cost sharing for Parts A and B. Moving care outside hospice can change the patient’s bill as well as Medicare’s spending.

The Records That Connect a Second Bill to a Decision

Evidence of hospice unbundling connects the election, the related-care decision and the outside payment. An insider may see only part of that chain at work. A nurse knows why the medication was ordered. A pharmacy sees who was billed. A hospice finance employee may know why an invoice was refused.

We bring those pieces together with you and connect them to the decisions inside the business. An instruction to route covered care to another payer, an unanswered request for payment or a discharge timed around costly treatment can explain how the expense moved. Changes to the care plan and coverage explanation matter because they show what the hospice understood when it made that decision.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In a qui tam case, the whistleblower brings the claim on the government’s behalf.

When You Know Why the Bill Went Elsewhere

If you have seen a hospice send covered expenses to another payer or to a patient’s family, speak with our whistleblower experts about the billing decisions you know. We build the case with you around the care obligation, the money and the people who directed the charges, and bring in hospice fraud whistleblower lawyers who understand Medicare payment disputes. From the first call, we stay beside you to build your strongest hospice whistleblower case.