For-Profit Hospice Companies Accused of Bilking Medicare

A number of False Claims Act cases have been filed in federal court against for-profit hospice care companies that many say are cheating Medicare out of millions of dollars annually. End-of-life hospice care is a charitable enterprise no longer, it seems. The nation now has 1,800 for-profit hospice companies, with $14 billion in revenues and a pool of Medicare-covered patients that doubled to over a million from 2000 to 2009.

False Claims Act suits allege that hospice workers get paid based on their enrollment numbers, that  admitting nurses report to marketing directors and that nursing-home doctors refer their own patients to hospice programs at which they are the medical directors. In some instances, the suits allege, Medicare pays for a patient’s hospice care while Medicaid pays for the nursing home care, and all the while the patient lives in the same facility!

Misty Wall was formerly a social worker at VistaCare Hospice, owned by Atlanta-based Gentiva, and is now an assistant professor working in Idaho at Boise State University. Wall has filed a whistleblower suit against VistaCare under the qui tam provisions of the federal False Claims Act. The lawsuit, filed in U.S. District Court in Dallas, alleges that VistaCare paid bonuses to doctors, admissions directors and branch managers for enrolling new hospice patients. The company’s nurses and social workers, Wall claims, were rewarded with pizza parties and gift cards when they met patient admission targets. Although the government has not joined Wall’s suit, the Justice Department is opposing VistaCare’s motion to dismiss the claim. Ms. Wall is represented in her case by Waters & Kraus, LLP.

The U.S. Department of Justice alleges that Hospice Care of Kansas paid its employees up to $100 a head for hospice patient referrals during promotions dubbed “Summer Sizzle,” “Fall Frenzy” and “Christmas Cash Blitz.” In a suit filed in U.S. District Court in Kansas City, Kansas, the government alleges that admissions directors at the Kansas outfit could earn bonuses for meeting enrollment quotas, and medical directors were also eligible for enrollment bonuses on an ad hoc basis.

Seven pending or settled lawsuits against for-profit hospice companies claim that all these enrollment-based incentives resulted in the admission of patients who weren’t eligible for hospice care because the patients were not dying. One patient lived on hospice care – at Medicare’s expense – for four years after her admission. The United States recently intervened in a lawsuit filed in Alabama against AseraCare, which suit includes similar allegations. But hospice care is meant only for patients whose death is imminent and for whom the only remaining medical treatment centers on pain management. Since 2000, however, the for-profit hospice companies have seen a 60 percent increase in the average length of time patients spend in hospice on Medicare hospice coverage.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Los Angeles, San Francisco, Dallas, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in health care fraud cases. Contact us to learn about our practice and how we can assist.

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