Medicare's hospice boom wasn't about the dying

The hospice benefit is supposed to be a quiet corner of Medicare: six months or less to live, palliative care instead of a hospital bed, a program built around dying well.▸ In 2024 it paid out $28.3 billion — more than double what it spent in 2010. That growth would be a straightforward story about an aging population, except the number of companies billing for hospice care grew even faster than the number of people using it, almost all of that growth for-profit, almost all of it concentrated in four states. This year federal and state investigators finally followed the money.

Between 2010 and 2023, hospice spending grew a steady 5.4% a year, per MedPAC's March 2026 report.▸ Then, in a single year, it jumped 10.4% — to $28.3 billion — as the average Medicare payment per day of hospice care rose to $191 and the total volume of hospice days billed rose 7.7%, to 148 million. Some of that is legitimate: 52.9% of Medicare decedents used hospice in 2024, a record, up from 51.7% the year before, and 1.82 million beneficiaries received hospice care overall, a 4.6% increase. People are, genuinely, using the benefit more. But volume alone doesn't explain who is cashing the checks.

The number of Medicare-billing hospices grew from 4,840 in 2019 to 6,706 in 2024 — a 38.6% increase in five years.▸ Almost none of it was nonprofit or government hospices, which shrank over the same period. It was for-profit entrants: from 3,435 to 5,497, a 60% jump, per MedPAC's Table 10-1. By 2024, 82% of all Medicare hospices were for-profit. The growth wasn't evenly spread: between 2019 and 2023, California added 1,046 hospices — a 19% annual growth rate — while Texas added 257, Arizona added 96, and Nevada added 60. California's own state auditor looked at Los Angeles County and concluded that "growth in the number of hospice agencies... has vastly outpaced the need for hospice services," flagging "excessive geographic clustering of hospices with sometimes dozens of separately licensed agencies located in the same building" and "hospice agencies using possibly stolen identities of medical personnel" — findings cited directly in MedPAC's report. California placed a moratorium on new hospice licenses in 2022. It didn't stop the pattern; it just slowed it.

Medicare caps how much it will pay a single hospice per patient-year; a hospice that keeps patients enrolled far longer than a typical terminal prognosis blows through it.▸ In 2019, 19% of hospices exceeded that cap. By 2023 it was 28% — and the number is not evenly distributed. More than half of California's hospices exceeded the cap in 2023, along with 30%–40% of hospices in Texas, Nevada, and Arizona, versus about 6% everywhere else, per MedPAC. CMS responded with enhanced oversight for new hospice enrollees in those four states starting mid-2023; by June 2025 it had reviewed claims from 668 hospices there and revoked the Medicare enrollment of 122 of them — better than one in six.

The enforcement caught up with individual operators this year.▸ In June, the HHS Office of Inspector General estimated Medicare could have saved $255.1 million by screening new hospice enrollees who had no hospital or emergency-room claim in the 18 months before signing up — a red flag for eligibility fraud; of 100 sampled certification periods, 45 failed to document that the patient actually met hospice requirements. In June's national health care fraud takedown, the Justice Department charged 455 defendants nationwide with over $6.5 billion in false claims and seized $182 million in assets; among the hospice cases was a Central District of California owner charged with a $27.7 million scheme who allegedly bought the identities of the recently deceased from a funeral-home employee for $1,000–$3,000 apiece, then billed Medicare for a few days of hospice care for people who were already dead. Days later, California Attorney General Rob Bonta announced the dismantling of a separate Los Angeles hospice fraud ring responsible for $267 million in fraud: 21 people charged with using stolen identities bought off the dark web to enroll non-Californians in Medi-Cal, then buying 14 hospice companies through straw owners to bill for hospice services against those stolen identities. No hospice care was ever provided.

Figures cover Medicare fee-for-service hospice spending and providers as reported by MedPAC through calendar year 2024, and federal and California enforcement actions announced through June 2026; other states' hospice program-integrity problems, and Medicare Advantage hospice carve-in effects beginning in 2028, are outside this piece's scope.