Hospice Care Fraud

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What is Hospice Care?

Hospice care, also referred to as end-of-life care, is medical, psychological and spiritual care for the incurably ill, provided by health care professionals and volunteers. A Medicare or Medicaid beneficiary is typically eligible to receive hospice care after a physician has given them a life expectancy of six months or less. Hospice care may be administered in a hospice center, a hospital facility, a skilled nursing facility, or as part of a home health care program.

Hospice Care Fraud

What is Hospice Care Fraud?

Hospice services are provided through hospice providers, home care agencies, skilled nursing facilities or facilities affiliated with hospitals. According to a 2013 report prepared by the National Hospice and Palliative Care Organization, an estimated 1.5 to 1.6 million patients received hospice care in 2012. This is triple the number served in 2000. The U.S. Department of Health and Human Services estimates that Medicare spending for hospice care will reach $18 billion in 2015, a 500% increase over the $3 billion spent in 2000.

The heavy demand from beneficiaries, coupled with the dramatic rise in Medicare payments to hospices has created a rise in for-profit hospice agencies participating in Medicare. The amount of money changing hands has also made government healthcare programs vulnerable to hospice fraud. By filing hospice false claims lawsuits, whistleblowers have been able to assist the government in recovering millions of dollars in fraudulently billed Medicare funds.

hospice fraud whistleblower

Caring for the physical and mental needs of patients is among the highest of callings. It is why you became a nurse.

Today, unfortunately, too many hospitals, nursing homes, community mental health centers and hospice providers have been blinded by greed. Patient admissions and treatment are manipulated to maximize benefit and billings, rather than provide needed and medically necessary health care.

If you find this conduct disturbing, you can make a difference. Call Baum Hedlund Aristei & Goldman for a privileged and confidential discussion about your concerns. It’s the right thing to do and you may also be entitled to a reward from the federal government.

Blow the Whistle on These Types of Hospice Fraud

  • Admission of patients who are not eligible for hospice services
  • Improper retention of hospice patients whose health is improving rather than declining
  • Payment of kickbacks to nursing homes and hospitals for referrals
  • Billing for the most expensive level of hospice care, in-patient crisis care, when it is not medically necessary
  • Paying of a bonus based on the volume of patients admitted
  • Falsifying patient charts to justify admission or retention of patients
  • Patients staying on hospice care for long periods of time without medical justification
  • Failure to conduct required patient re-evaluations
  • Admission of patients who do not have a prognosis of six months or less to live
  • Inadequate medical records that do not justify admission or retention
  • Providing curative care to hospice patients

Nursing Homes

Hospice fraud can occur in a variety of ways, but none are more worrisome than kickback based relationships between nursing homes and hospices. Nursing homes often enter exclusive or semi-exclusive arrangements with hospices to provide services to their terminally ill patients.

From a financial standpoint, hospices view nursing homes as a sizeable pool of potential patients. In addition, nursing home hospice patients are generally more profitable than hospice patients receiving at-home care.

Hospice staffs also provides patient care, allowing the nursing home to serve more patients with the same or fewer employees. This creates an incentive for some hospice providers to pay kickbacks to nursing home facilities for patient referrals. The result is a growing number of hospice patients who receive hospice care that is not medically and legally proper.  Under the anti-kickback statute, it is illegal to “knowingly or willfully solicit, receive, offer or pay anything of value to induce referrals or items or services payable by a federal healthcare program.”

These kickbacks can take a variety of forms:

  • Hospice providers supplying nursing homes with free or below fair market value goods or hospice services in exchange for patient referrals
  • Hospice facilities referring patients to nursing homes in order to encourage the nursing homes to refer patients back to hospices for care at the appropriate time
  • Hospice facilities providing free or below market value skilled nursing services to a nursing home, services for which the nursing home is already receiving Medicare payments. The hospice does this with the expectation that when the patient is eligible for hospice care, that hospice company will be contracted to provide hospice services at the nursing home.

Hospice Fraud Whistleblowers

Recent hospice care fraud cases illustrate some common themes found in hospice fraud, as well as the role that whistleblowers play in uncovering fraudulent Medicare billing.

  • September 2, 2014 – A hospice nurse, represented by Baum Hedlund attorney Mark Schlein, filed a whistleblower (qui tam) lawsuit in 2012 that resulted in a multimillion dollar settlement against a San Diego hospice care corporation.  Lori Rachac, who will receive an award that could reach $1 million, claimed in her lawsuit that San Diego Hospice admitted patients who were not eligible for hospice services.
  • August 28, 2014 – The U.S. government joined a qui tam lawsuit filed by two former employees of a company that provides hospice care services across the U.S. The suit alleged that the company pressured employees and physicians to admit and retain patients who were not terminally ill and disregarded physician’s decisions that patients should be discharged.
  • May 21, 2014 – The U.S. Attorney’s Office filed a complaint against a Philadelphia provider of hospice services, charging the company with submitting “false claims and records, including fabricated records, to Medicare for purported hospice care for patients who were not terminally ill, and thus not eligible for the Medicare hospice benefit.”  The company also submitted false claims and records for crisis care services that were not necessary or not actually provided. (Crisis care services are meant only for patients experiencing acute medical symptoms that require immediate short-term nursing services to remain at home.) The charges were originally brought in a qui tam hospice lawsuit filed by two whistleblowers who were former employees of the hospice provider.
  • April 17, 2014 – A federal grand jury returned an indictment charging an Oklahoma hospice facility with conspiring to conceal the true medical condition of its patients. The indictment alleged that medical records and nursing notes were falsified to make it appear that necessary assessments had been conducted, when they were not and to make it appear that the patients were in worse health than they actually were.

Health care fraud against the United States occurs when an individual or corporation files a claim to obtain reimbursement from the government for healthcare products or services under false pretenses. The two most visible programs vulnerable to healthcare fraud are Medicare, the government program that serves people age 65 and older, and Medicaid, which covers people with low incomes.

Tricare, a government program that provides military personnel with civilian healthcare benefits, is also a victim of false claims and fraudulent activity. Tricare enrollment is open to active service members and their families, National Guard and Reserve members, and retirees. The United States Department of Defense Military Health System administers Tricare, although the government has contracts with several large private insurance corporations to provide claims processing, administrative functions and customer service.

Healthcare Fraud and the Whistleblower

Healthcare fraud is prosecutable both criminally and civilly under the federal False Claims Act (FCA), which rewards and protects whistleblowers who file whistleblower (qui tam) lawsuits against fraudulent providers.

Recent settlements announced by the Department of Justice (DOJ) show how common and costly Medicare and Medicaid fraud is in the United States. They also illustrate the important role that whistleblowers, the FCA, and whistleblower litigation play in exposing fraud and helping the government recover fraudulently obtained payments. Here are a few examples:

  • December 1, 2014 – North Atlantic Medical Services Inc. (NAMS), a Massachusetts company, agreed to pay $852,378 to resolve allegations that it violated the False Claims Act by submitting claims to Medicare and Medicaid for respiratory services provided by unlicensed personnel. The government investigation was triggered by a whistleblower lawsuit filed under the FCA by two former NAMS employees. They will split a whistleblower award of $153,428
  • November 18, 2014 – The DOJ announced that the former chief operating officer of a Miami-area psychiatric hospital had pled guilty to submitting more than $67 million in fraudulent claims to Medicare for inpatient and outpatient mental health services that were not medically necessary. The hospital obtained Medicare patients by paying bribes and kickbacks to patient brokers.
  • October 22, 2014 – In one of the largest recent fraud settlements, DaVita Healthcare Partners, Inc., a company that operates dialysis clinics in 46 states and the District of Columbia, paid $350 million to resolve claims that it violated the False Claims Act by paying kickbacks to physicians for referring patients to its clinics. Such payments have been made illegal to ensure that health care decisions are based only on the medical needs and interests of the patient, not financial gain for the doctor. Here again, the charges were originally brought in a qui tam lawsuit filed by a whistleblower, a senior financial analyst with the company. His award for pursuing whistleblower litigation will likely exceed $50 million.
  • October 30, 2014 – Dignity Health, one of the largest hospital systems in the nation, agreed to pay $37 million to settle charges that 13 of its hospitals in California, Nevada and Arizona knowingly submitted false claims to Medicare and Tricare by admitting patients who could have been treated on a less costly, outpatient basis. The settlement resolved a lawsuit brought by a whistleblower who was former Dignity employee under the qui tam provisions of the False Claims Act (FCA). She will receive a whistleblower award of approximately $6.25 million.

Taking Legal Action

The whistleblower (qui tam) lawsuits mentioned above are authorized by a federal law known as the False Claims Act (FCA). This law permits private citizens who are aware of fraudulent activity to sue individuals or companies on behalf of the U.S. government. The Department of Justice is informed of the suit and, after its own investigation, may decide to join the action. The FCA entitles the whistleblower to receive 15 percent to 25 percent of any amount recovered through a trial or settlement reached by the DOJ. If the government does not join the lawsuit the whistleblower may still proceed individually and can receive an award of up to 30% of any successful recovery.

Whistleblowers who are considering legal action are encouraged to investigate their legal options as soon as possible. Waiting can sometimes jeopardize a case. The Baum Hedlund team is experienced in handling hospice care fraud litigation and would be happy to assist you.

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