A few days ago, the Department of Justice announced that it had reached a settlement with Good Shepherd Hospice, Inc., to resolve a whistleblower lawsuit filed under the qui tam provisions of the civil False Claims Act alleging hospice fraud. Specifically, the whistleblower alleged that the hospice provider submitted claims to Medicare and Medicaid for patients who were not terminally ill.
Government health care programs, especially Medicare, have strict requirements for when they will pay for hospice care. Typically, the government requires, among other things, that the patient have a diagnoses of less than 6 months to live before it will pay for hospice care. Thus, if a patient is not terminally ill, then the government will not pay for the hospice care. It is common for hospice providers to certify that a patient is terminally ill, and therefore entitled to coverage for hospice care under Medicare, when the patient is actually not terminally ill.
The lawsuit alleged that Good Shepherd knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill. Specifically, the United States contended that Good Shepherd engaged in business practices that contributed to claims being submitted for patients who did not have a terminal prognosis of six months or less, by pressuring staff to meet admissions and census targets and paying bonuses to staff, including hospice marketers, admissions nurses and executive directors, based on the number of patients enrolled. The United States further alleged that Good Shepherd hired medical directors based on their ability to refer patients, focusing particularly on medical directors with ties to nursing homes, which were seen as an easy source of patient referrals. The United States also alleged that Good Shepherd failed to properly train staff on the hospice eligibility criteria.
As part of the settlement, Good Shepherd agreed to pay the government $4 million. In addition, the settlement requires Good Shepherd to enter a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of the Inspector General. This agreement will require the hospice provider to implement procedures and reviews to avoid and promptly detect similar conduct. The whistleblowers in this case will receive $680,000.
The lawsuit is captioned United States ex rel. Cordingley and Jones v. Good Shepherd Hospice, Mid America, Inc., No. 4:11-cv-1087 (W.D. Mo.).
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