DOJ Announces Largest Hospice Fraud Settlement Ever – $75 Million

The Justice Department announced the resolution of a False Claims Act lawsuit with a $75 million settlement by Chemed Corporation and various wholly-owned subsidiaries, including Vitas Hospice Services. The settlement is the largest amount ever recovered under the False Claims Act from a provider of hospice services, according to Acting Assistant Attorney General of the Civil Division, Chad A. Readler.

Vitas is the largest for-profit hospice chain in the United States, operating 51 for-profit hospice programs in 18 states. Historically, around 90% of Vitas’ revenue is derived from Medicare. Chemed acquired the Vitas-affiliated companies in 2004.

CRISIS CARE

Crisis care is designed to allow a hospice provider to assist with the management of uncontrolled symptoms during a short period of time to return the patient to a state of comfort. It provides for around-the-clock care for up to 24 hours, with its appropriateness reassessed every 24 hours.

The lawsuit alleged that the Defendants submitted or caused false claims for crisis care services that were not provided to patients, that were inappropriately provided, or were not medically necessary because the patients were not in crisis during the periods that the Defendants claimed. According to the complaint filed by the United States, Vitas misled patients through their marketing materials to believe that patients would routinely receive “intensive comfort care” paid for by Medicare without informing them of the required acute medical symptoms. Vitas also used this marketing technique with potential referral sources.

According to the allegations in the complaint, Vitas not only distributed materials that incorrectly informed staff how and when to initiate crisis care, but the companies set aggressive goals for billing Medicare for crisis care. One nurse stated that she was sent to the home of patients for crisis care to find them not in crisis on more than one occasion. In one instance where crisis care rates dropped, Vitas’ Vice President of Operations sought an analysis of what caused the drop and how the location will correct it.

The complaint also alleges that Chemed and Vitas knew through regular internal audits that patients did not qualify for crisis care which they received or that the crisis care was inconsistent with the patient’s plan of care. Defendants were also aware that their Medicare reimbursement for crisis care far exceeded the rest of the hospice industry.

In many cases, according to the allegations, the care billed as “crisis care” by Vitas was simply a part of routine home care services. In total, the United States listed seven patient examples of this conduct.

END OF LIFE CARE

It is well known that Medicare requires hospice patients to be terminal and have a life expectancy of 6 months or less. Hospice care is designed to provide end-of-life comfort and is not designed for patients still seeking a cure or who may live for years.

According to the allegations, Vitas also admitted patients who did not need end of life care and billed Medicare for them. Managers at Vitas’ headquarters set aggressive admissions goals and made focused inquiries when admission numbers were low. They also evaluated general managers of each program based on its profitability and as a result the program managers often disregarded nurse and doctor concerns regarding patients who were not terminally ill.

Vitas similarly evaluated marketing representatives based on meeting their admission goals and paid bonuses based on enrollment into the program. The company philosophy, according to one former hospice manager, was to sign everybody up. Medical staff also reported that they felt pressured to admit or readmit patients who were inappropriate. Another nurse reported that the goal at discharge meetings was to disregard as few patients as possible without regard to the appropriateness of care. One doctor even reported that he was overruled on several occasions when he did not certify patients as eligible for hospice.

The United States offered seven patient examples for the allegations that Defendants billed hospice care for patients who did not meet the Medicare requirements.

THE FALSE CLAIMS ACT LAWSUITS

There were three whistleblower lawsuits filed against one or more of the companies involved in the settlement. The United States intervened in the lawsuits and transferred them to the Western District of Missouri, where they were consolidated with a lawsuit filed by the United States against the Defendants. As part of the settlement, Vitas entered into a five-year Corporate Integrity Agreement.

If you have evidence of hospice fraud occurring at another health care provider, call 1-800-590-4116 for a free consultation with a McEldrew Young False Claims Act attorney.