DOJ files false claims case vs largest U.S. hospice provider

DOJ files false claims case vs largest U.S. hospice provider

5/6/2013

By Adam Kerlin

(Reuters) - The U.S. Department of Justice on Thursday charged the nation's largest for-profit hospice chain with inappropriately admitting patients and billing Medicare for unnecessary crisis care, highlighting the agency's ongoing battle to crack down on fraud in the hospice industry.

The Justice Department filed the False Claims Act complaint in district court in Kansas City, Missouri, alleging that Vitas Innovative Hospice Care, headquartered in Miami, paid employees bonuses tied to the number of patients they enrolled for unnecessary intensive services.

The complaint also alleged that the company's marketing intentionally misled patients into believing they qualified for "intensive comfort care" services, a level of care covered by Medicare only in the case of a short-term crisis and acute medical symptoms, and "to believe that the Medicare hospice benefit would routinely cover around the clock care for hospice patients."

"The Medicare hospice benefit is intended to provide patients nearing the end of life with pain management and other palliative care to make them as comfortable as possible," said Stuart Delery, Acting Assistant Attorney General for the Civil Division in a statement. "Too often, however, we hear reports of companies that abuse this critical service by using aggressive marketing tactics to push patients into services they don't need in order to get higher reimbursements from the government."

Vitas did not return calls for comment.

UPTICK IN 'UPCODING'

The case against Vitas is the latest in a series of actions by the Department of Justice against hospice and skilled nursing facilities for submitting inaccurate and fraudulent claims.

In January of this year, the department announced a settlement with a South Carolina hospice center that allegedly had submitted claims for patients who had not received a prognosis of six months or less to live, the standard that qualifies someone for hospice care. In March, the agency announced a $12 million settlement with Hospice of Arizona over similar allegations.

A November 2012 study by the Office of Inspector General showed that inappropriate payments to skilled nursing homes cost Medicare $1.5 billion in 2009. The majority of the claims from the nursing facilities were "upcoded" - where the facility charges for unnecessary Medicare claims that are reimbursed at a higher rate - and many of the claims were for ultrahigh therapy, the report said.

According to the government's complaint against Vitas, the company pushed its workers to bill for "crisis care" rather than "routine home care" because the daily reimbursement rates for crisis care was $742 more than for routine home care.

Incentivizing workers to comply with companywide false claims schemes is common in big cases, said Erika Kelton, an attorney at Phillips & Cohen who represents whistle-blowers in healthcare fraud cases.

"The more significant False Claims Act cases are schemes organized from the top of the organization and participation in them is encouraged," Kelton said. "It's a strategy for the companies to increase profits."

The case is USA v. Vitas Hospice Services, U.S. District Court for the Western District of Missouri, No. 13-449.

For the United States: Lucinda Woolery of the Justice Department.

For Vitas: Not immediately available.