SAN DIEGO — The U.S. Department of Justice, on behalf of the Centers for Medicare & Medicaid Services, has filed a $112 million claim in bankruptcy court, instantly becoming the largest of San Diego Hospice's creditors.
Attorney Lisa K. Samuels accuses the bankrupt hospice, once San Diego's largest, of submitting "false claims for payment" in 2009 and 2010 and cites a whistle-blower lawsuit brought in December 2012 by a nurse who said she was fired after questioning the nonprofit's policies and procedures.
San Diego Hospice filed for Chapter 11 bankruptcy on Feb. 4 after announcing in November of 2012 that it was under scrutiny from Medicare for its billing practices which its chief executive officer said in interviews did not always follow requirements closely enough.
Once with nearly 1,000 hospice patients, the organization had about 430 after declaring bankruptcy. This spring, all of the patients and many of San Diego Hospice's former employees were transferred to Scripps Health and other local hospice operators.
On April 30, Scripps won an auction to purchase the hospice's hospital building in Hillcrest for $16.55 million.
With the organization no longer caring for patients, and its assets sold, all that is left is to divide sale proceeds among creditors like Wells Fargo Bank and former employees. The bankruptcy court lists claims filed by a total of 219 creditors.
Creditors are scheduled to meet on June 26 to vote on a liquidation plan that would pay different amounts based on what types of claim each has filed.
Though hospice officials have said that the government has been reviewing San Diego Hospice records since February 2011, no information has been released to the public on the outcome of the audit. Monday's filing simply cites the claims made in the whistle-blower lawsuit, but provides no additional detail.
The government does, however, leave itself an out to add information later stating in Monday's filing: "The United States continues to investigate the conduct giving rise to this claim and reserves the right to amend it."