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CMS Proposes ‘36-Month Rule’ to Curb Hospice License ‘Flipping’

Jim Parker, for Hospice News:

Some hospice owners have been selling their businesses soon after securing a license. This has prompted federal agencies to pursue new regulations to address the problem.

The practice appears to stem from a rash of newly licensed hospices that have emerged in California, Nevada, Texas and Arizona.

Some of these providers have secured licenses, as well as Medicare certification and, sometimes, accreditation. They then proceed to enroll a small number of patients for whom they never bill Medicare …

By not billing, they are better able to avoid regulators’ attention.

Hospice is perceived as a predictable revenue stream by private equity (PE). Too often, PE does not understand the hospice business model nor does it have the commitment to prioritize standard of care over maximizing profits. Flipping licenses has undoubtedly increased because of an influx of PE funds.