Medicare spending on hospice services nearly doubled in 10 years due largely to a policy that paid providers per patient rather than according to the services rendered.
Medicare paid the same rate regardless of how often a patient received care or how extreme the patient’s condition was, which cost taxpayers an additional $7.6 billion between 2022 and 2024, according to a June report by the Government Accountability Office.
That was an overpayment rate of 83.5 percent for undelivered or insufficient routine home care, the report said.
The watchdog agency said on July 14 that the large financial incentive “may attract fraudsters” to enroll as hospices. “Said another way, if you’re getting paid the same no matter how often you show up, why show up often?”
Medicare is the federal health insurance program for those age 65 and older and people with disabilities.
Medicare hospice is end-of-life care for people with six months or less to live.
Routine home care is the most common level of care for hospice patients in stable condition. Nurses, aides, and social workers visit patients to address their pain and symptoms.
Medicare spending on hospices was nearly $28 billion in 2024, 1.75 times as much as in 2015, according to the Centers for Medicare and Medicaid Services (CMS).
The number of hospices increased by about 60 percent during that time, driven by a doubling of for-profit hospices, according to the Medicare Payment Advisory Commission.
Part of the spending increase can be explained by the growing number of patients receiving care.
In 2024, more than 1.8 million Americans relied on Medicare for end-of-life care, up from 1.4 million in 2015, according to the Commission.
CMS has taken measures to improve transparency in reporting hospice services to “shine a light on potentially concerning hospice billing and beneficiary care delivery,” according to the federal agency.
Roughly 20 percent of hospices were not in compliance with reporting requirements in 2025, CMS found.
CMS reported more than 200 hospice revocations across Arizona, California, Nevada, and Texas as of April and imposed a 6-month nationwide suspension on Medicare enrollment of hospices in May.
“Hospices exist to help Americans die peaceful, dignified deaths, not to line the pockets of fraudsters,” CMS administrator Dr. Mehmet Oz said in a statement.
Beginning in October, the federal agency plans to add an icon on the Care Compare website to indicate hospices that fail to submit complete quality data.
These transparency measures will make it easier to “identify hospice providers that misuse Medicare dollars, cut off their funding, and refer them to law enforcement for criminal prosecution,” Oz said.
In October 2025, seven Houston residents were charged with conspiring to fraudulently bill Medicare and Medicaid for more than $110 million for hospice services provided to patients who were not terminally ill, according to the U.S. Department of Justice.
