Hospice is facing unprecedented public criticism. In recent months, The Washington Post has published at least four highly critical articles, alleging widespread instances of poor care and fraud. In June, The Huffington Post published a long investigative piece largely targeting the practices of the for-profit hospice operator  Vitas Healthcare Corp.

What’s this about? How did a movement aimed at comforting the dying become a target for widespread allegations of fraud and patient abuse? Is the criticism legitimate? Here are a few thoughts:

Hospice has grown from a social movement to an industry. Largely thanks to Medicare reimbursement, hospice is big business.

In 2011, Medicare alone paid hospices $13.8 billion. According to the National Hospice and Palliative Care Organization (NHPCO), the number of hospice patients served each year has increased eight-fold in two decades, to nearly 1.6 million, and the number of Medicare-certified hospices has more than doubled to 3,500. But providers have gone from being overwhelmingly small, non-profits to for-profit businesses. By 2012, almost two-thirds of Medicare-certified providers were for-profit. And there are fewer non-profits today than in 1997.

This trend makes advocates (and some journalists) very uncomfortable. Indeed, The HuffPost piece was entitled Hospice, Inc., which pretty much summarizes its view towards for-profit providers.

A changing patient population: Two decades ago, nearly all hospice patients were dying of cancer. Now, fewer than 4 in 10 have a primary diagnosis of cancer. As a result, it is much more difficult to predict whether a patient is likely to die within 6 months of admission, as Medicare requires. While this is an opportunity for abuse, it also puts great pressure on honest providers who are trying to enroll patients early enough to make a difference without running afoul of Medicare rules.

The payment system. For most admissions Medicare pays hospice a fixed daily rate throughout a patient’s enrollment. But hospice costs are highest at admission and just before death, and relatively low in the intermediate days. That flat payment is an incentive for hospices to enroll patients early. At the same time, patients and their doctors often want to wait to make the hospice decision. The result:  Some patients are signed up too quickly (11.5 percent are enrolled for more than 6 months) but many more are enrolled too late (more than one-third for less than a week).  NHPCO president Don Schumacher says late admissions remain the biggest challenge for hospice.

Losing Focus.  Hospices that carefully play by Medicare’s rules are scrambling to keep their heads above water. Like most health care providers, they feel enormous pressure to grow, and staff often can’t keep up, especially those providing social and spiritual care.

One risk of these trends is that hospice is becoming increasingly medicalized, in large part to satisfy Medicare’s anti-fraud rules. This results in more paperwork, more limits on eligibility (dementia is no longer allowed as a primary diagnosis), and an increasing focus on care that can be measured—which tends to be medical.  This may please Medicare, politicians, fraud-sniffing journalists, and large corporate hospices, but it may dilute the social and spiritual support that is often the real benefit of hospice care.

The discharge story Hospice discharge is an enormously complicated issue. Patients are discharged for many reasons: Sometimes they voluntarily quit either because they want to resume medical treatment for their terminal disease or are dissatisfied with the care they are getting. In some cases, hospice care improves patients’ health status so much that they stabilize and Medicare will no longer pay for hospice services. And sometimes, they are involuntarily discharged by a hospice trying to save money.

This happens because hospice must provide not only end-of-life support but also pay for most other medical care, including treatment for conditions unrelated to a patient’s terminal diagnosis. If a patient is hospitalized and her care gets too expensive, some hospices may discharge her to avoid those charges. Once she is discharged from the hospital, she is then readmitted to hospice.

A new paper by Brown University’s Joan Teno  finds that small for-profit hospices and hospices located in the south and southwest have higher discharge rates than others, but we need to learn much more about why.

Wide Variation in Quality—Teno’s article highlights a real problem with hospice—the big gap between the best and the worst. While we don’t know for sure, it is easy to speculate about why some hospices are so much better than others. For instance, only about 6 in ten are certified by an independent credentialing body. While all must be licensed by their states, that oversight ranges from strict to almost non-existent.  Heavy regulation is no guarantee of quality but little or no oversight can open the door to abuse and incompetence.

In one sense, hospice has become a victim of its own success. It is attracting more attention and, with it, controversy. And there are bad actors in a place where there should be none. What can one say about people who make a living defrauding Medicare and abusing the dying?

Better licensing and credentialing may help weed out some of the worst of these providers. So would more public disclosure of hospice quality. Changes in the payment model may help as well. It may not make sense to pay a fixed rate throughout a long hospice admission.

But Medicare must be careful. A regulatory and payment system that focuses on preventing fraud rather than maximizing quality care won’t benefit patients. The goal must be clear: The best possible end-of-life experience for the dying and their families.

In an upcoming blog, I’ll take a look at the future of hospice.