Hospice programs provide healthcare for terminally ill individuals with a life expectancy of six months or less. In Nevada, most hospice patients utilize federal Medicare or state-administered Medicaid benefits to access these services. 

Now, state leaders say that system is rife with fraudulent actors gaming the system for financial gain—billing those federal programs for patients who don’t qualify for hospice or shutting down a hospice under investigation only to reopen under a new name to continue collecting payments. To root it out, the Nevada Health Authority on June 11 enacted a temporary pause of new state licenses for hospice and home-health providers, plus a moratorium on new Nevada Medicaid enrollments, with some exceptions.

Over the next six months, with the potential for an extension, state investigators will seek to “validate and confirm the legitimacy of current providers” and “identify any instances of potential Medicaid billing and payment fraud,” according to the Nevada Health Authority. One month earlier, the federal Centers for Medicare and Medicaid Services (CMS) implemented a similar six-month, industry-wide pause on new Medicare enrollments. The moves are part of President Donald Trump’s wider efforts to root out what he has called fraud in the health care sector.

Gov. Joe Lombardo’s communications director Drew Galang tells the Weekly that the state’s Medicaid inspector general had flagged “suspicious billing patterns” and a rapid increase in new hospice licenses before acting—in tandem with federal regulators flagging Nevada for “elevated fraud risk.” He declined to comment on the status of the investigation.

Founded in 1978, Nathan Adelson Hospice serves around 3,500 patients each year from their homes or its two inpatient units. Now led by President and CEO Karen Rubel, the nonprofit has been urging state authorities to reform the system for years.

What factors led to the state moratorium?

It started in 2022, when California put a moratorium on hospice business licenses. They were uncovering some shady dealings and wanted to slow down the growth so they could investigate. Some people took advantage of not being able to open another hospice there and came to Nevada, Arizona or Texas. We went from probably 30 competitors to almost 225 in the last few years, and we can make that connection for some of them back to California. As the oldest hospice in town, we felt like it was our obligation to bring attention to the matter.

What are you hearing from patients?

Patients from other hospice companies started calling us and saying, “We want to transfer to your hospice because we believe we’re receiving poor care. We’ve never seen a nurse, we aren’t getting our medications timely and when we call for a crisis, they direct us to the emergency rooms.” It’s very rare for a patient to transfer hospices, so that really got our attention. We also had patients who had been signed on to other hospices even though they had no ability to make healthcare decisions for themselves, and we were contacted after their healthcare power of attorney realized what happened.

Nathan Adelson Hospice officials penned a 2024 paper explicitly calling for a two-year moratorium to weed out illegitimate providers—one year after Nevada was also flagged by federal regulators for its fraud risk. Why now?

It’s really hard to prove that something fraudulent is happening. It’s all anecdotal, basically. So, I think the state and the Medicare office were trying to identify if there really is a problem. Is this just a growth issue, or is something else going on here? I think that’s part of what took so long.

What are your thoughts on that six-month pause? Should it be extended?

It’s a really good start. It depends on how quickly they move and act to identify some of these nefarious players. If they have the resources to do that in six months, great. But if it goes beyond six months, that’s an indication that there probably really is a problem, and that it might be bigger than anybody thought.

What else did you do to push for change at the federal level?

Through our membership in a national nonprofit hospice membership group, we were able to attract the attention of Dr. [Mehmet] Oz, the leader of CMS. He came here last fall for a community roundtable, where we invited some physicians and community members to talk about what they were seeing. All of our experiences were very similar—patients were receiving poor care or didn’t even know they were in hospice. He also went to California and talked about the same things with hospice operators there, which led CMS to put a six-month moratorium on new Medicare numbers.

The moratorium also has an exception for rural providers. What do you know about that and why that might be in place? 

I think that it was very wise of the state to exclude rural areas, where access to health care is already limited. We have an office in Nye County, which is considered rural, and we don’t have the type of competition from hospices out there that we do in Clark County. So, I think it was a good move. You don’t want to cut people off from hospice if they have an opportunity to access it.

What would real, lasting oversight look like to you?

I would like to see all hospices having mandated reporting to the state and to CMS. Without exception, I think everybody should have to show us their quality scores and how they’re doing when it comes to managing their patients’ care. I don’t know how you manage that and how they can get enough people to review the data all the time, but I think that there needs to be some more resources around making sure that people are getting quality hospice care.

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