OIG STRATEGIC PLAN 2014‒2018 : Driving Positive Change

 Goals, Priorities, and Strategies

OIG’s goals and priorities reflect the positive changes toward which we strive. Accompanying each priority listed below are illustrative strategies and indicators, as well as examples of OIG’s work to improve HHS programs and ensure the health and safety of the people served by them.

Goal One: Fight Fraud, Waste, and Abuse

Critical to OIG’s mission is fighting fraud, waste, and abuse. We will continue to employ a multi-faceted approach of prevention, detection, and deterrence.

Priority: Identify, investigate, and take action when needed

Strategy. OIG uses data analysis and risk assessments of emerging issues to identify suspected fraud, waste, and abuse and deploy our oversight and enforcement resources. Our investigations result in criminal convictions and penalties, civil settlements, and administrative actions against those who commit fraud. Updates on OIG’s enforcement actions are available on our website. Looking ahead, we will build on successful enforcement models such as the Medicare Fraud Strike Force teams to enhance our enforcement results in other HHS programs. Key focus areas include: Medicare and Medicaid program integrity and waste in HHS programs. We will also continue implementing and refining protocols for self-disclosure of wrongdoing.

Priority: Hold wrongdoers accountable and maximize recovery of public funds

Strategy. OIG partners with the Department of Justice (DOJ) and HHS on Medicare Fraud Strike Force teams and other health care fraud enforcement activities through the Health Care Fraud and Abuse Control (HCFAC) program. On average, the HCFAC program recovers more than $7 for every $1 invested and protects programs through nonmonetary results, such as criminal convictions and exclusions of providers from participation in Federal health care programs. The latest HCFAC results are available in the annual HCFAC Report to Congress. We will continue to pursue all appropriate means to hold fraud perpetrators accountable and to recover stolen or misspent HHS funds. Key focus areas include: identifying and recovering improper payments and utilizing exclusions and referrals for debarment to protect HHS programs and beneficiaries.

Priority: Prevent and deter fraud, waste, and abuse

Strategy. OIG identifies fraud, waste, and abuse vulnerabilities in HHS programs and operations and advises HHS program administrators and policymakers on how tomplement effective safeguards. For example, our recommendations for strengthening HHS program administration and grants management and our grant fraud prevention training for HHS are summarized on our website. We also educate health care providers and provide them tools to help prevent fraud and abuse; these tools are available on our website. Looking ahead, we will apply the lessons we have learned about fraud vulnerabilities and effective prevention to HHS’s new and evolving programs. Key focus areas include: promoting compliance with Federal requirements and resolving noncompliance; advising HHS on key safeguards to prevent fraud, waste, and abuse, and assessing whether providers and suppliers, grantees, and others are qualified to participate in Government programs.

Goal Two: Promote Quality, Safety, and Value

HHS programs touch the lives of all Americans. OIG is committed to promoting quality of care and public safety in those programs and maximizing the value of Federal dollars invested.

Priority: Foster high quality of care

Strategy. OIG will continue to evaluate and recommend improvements to the systems intended to promote quality of care, exemplified by our series of reviews of adverse events (patient harm resulting from medical care), available on our website. We will also investigate and refer for prosecution cases involving abuse or grossly deficient care of Medicare or Medicaid patients. Looking ahead, OIG plans to expand our portfolio of work on quality of care. Key focus areas include: promoting quality of care in nursing facilities and home- and community-based settings, access to and use of preventive care, and quality improvement programs.

Priority: Promote public safety

Strategy. OIG recommends improvements to HHS programs to ensure adequate emergency preparedness and response; to protect the safety of food, drugs, and medical devices (summarized on our website); and to ensure that their grantees (e.g., Head Start and child care providers) meet safety standards. OIG will continue to prioritize fraud investigations that have public safety as well as financial implications and to look for comprehensive solutions. For example, we will continue to investigate prescription drug fraud cases and plan to work with leadership across HHS operating divisions to identify systemic solutions for this problem.

Priority: Maximize value by improving efficiency and effectiveness

Strategy. OIG’s findings and recommendations promote efficiency and effectiveness in specific programs and across HHS. We also work to ensure that HHS programs do not overpay for services or products relative to their value in the marketplace―for examples, see our “Spotlight on Bad Bargains.” Looking ahead, OIG also plans to assess programs intended to achieve value through care coordination and new ways of delivering and paying for care, as well as the reliability and integrity of quality, outcomes, and performance data.

Goal Three: Secure the Future

OIG will continue to address program and operational vulnerabilities that affect the long-term health and viability of HHS programs.

Priority: Foster sound financial stewardship and reduction of improper payments

Strategy. OIG reviews HHS’s annual financial statement audits and error rate reports. We also conduct targeted reviews to identify improper payments to be recovered and recommend management improvements to systemic weaknesses that contribute to improper payments. For example, our series of hospital audits (available on our website) identified common billing and payment errors and recommended fixes and recoveries of funds that were overbilled to the Government (overpayments). Looking ahead, OIG will continue to prioritize work on billing and payment errors by providers, effective program administration and contract oversight, and inefficiencies that result in wasteful spending.

Priority: Support a high-performing health care system

Strategy. OIG is working to support a high-performing health care system to foster better health outcomes and lower costs. OIG’s efforts include promoting quality, coordination, and efficiency. We provide technical assistance on safeguards to protect new and changing systems and programs from fraud, waste, and abuse. As HHS manages the transition to payments based on value rather than volume, we plan to conduct reviews and recommend changes to maximize overall value, protect program integrity, and foster value and high performance.

Priority: Promote the secure and effective use of data and technology

Strategy. Data and technology promise to drive improvements in health care and human services at lower costs. OIG will continue to advise program administrators and policymakers on promoting the secure and effective use of data and technology. OIG’s work in this area is summarized on our website. Looking ahead, key focus areas include: the accuracy and completeness of program data (e.g., Medicaid data), the privacy and security of personally identifiable information, and the security and integrity of electronic health records.

Goal Four: Advance Excellence and Innovation

OIG strives to advance excellence and innovation in our own organization and operations.

Priority: Recruit, retain, and empower a diverse workforce

Strategy. OIG achieves its mission through its workforce. To identify, understand, and address the challenges facing HHS, we will continue to invest in our workforce by recruiting and retaining talented employees and by maintaining workforce excellence and the highest standards of professional conduct. We will foster a work environment that enhances productivity, innovation, excellence, and employee satisfaction and will cultivate a culture of continuous improvement. More information about careers at OIG is available on our website.

Priority: Leverage leading-edge tools and technology

Strategy. OIG maximizes the returns on our investments by leveraging data analytics and technology to inform our decisions about where to best direct our resources. For example, analysis of Medicare billing patterns has guided our decisions about where to deploy Medicare Fraud Strike Force teams and data analysis helps us to uncover fraud and conspiracies in specific cases, such as those highlighted in our Semiannual Report to Congress. Looking ahead, we will continue to use the best data, analytic tools, and technologies available to maximize the impact of our work.

Priority: Promote leadership, vision, and expertise

Strategy. In an evolving health and human services landscape, OIG focuses on building leadership and expertise to drive positive change. Our multidisciplinary approach affords us a range of tools to develop sound and innovative solutions. More information about OIG’s multidisciplinary workforce is available on our website. As HHS programs, technology, and the environment change, embracing innovation will help us maintain relevance and achieve impact.


The entire report in PDF:
http://oig.hhs.gov/reports-and-publications/strategic-plan/files/OIG-Strategic-Plan-2014-2018.pdf

Audit: State overpays $11.4M in medical costs

Comptroller's audit reveals continuing pattern of problems

Rick Karli, Times Union Copyright 2013 Times Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

By Rick Karlin     Updated 9:51 pm, Tuesday, July 9, 2013

New audits from the state comptroller's office find that the state Department of Health is consistently misdiagnosing how much it should pay for Medicaid services, resulting in millions of dollars in annual overpayments to doctors and others who send in the wrong bills.
"Year after year, my auditors identify the same types of Medicaid errors due to weak controls," Comptroller Tom DiNapoli said in a statement accompanying audits that found some $11.4 million in overpayments.
The findings, released Tuesday, reached back to 2009 and focus on Medicaid and Medicare.
Medicaid is the insurance program for the poor, while Medicare pays for seniors and the disabled. Some New Yorkers receive both. In those cases, Medicare pays most of a charge and Medicaid pays the balance.
Auditors looked at more than 201,000 claims and found that care providers had incorrectly reported the charges — posting their own stated rates rather than the lower rate Medicare allows. That added up to more than $7 million in overpayments in 2009.
The health department responded that it refined its billing system at the end of 2009, just as the audit period was ending.
But in a six-month audit looking at a period that ended on March 31, 2012, the comptroller's office found $4.1 million in overpayments.
The findings included billings for duplicative procedures, bills for "high (intensive) levels of care" when less costly treatments would have sufficed, and improper payments for physician administered drugs.
In one case, a Pennsylvania provider charged that state's higher rates for transportation. In another case, a nursing home and hospice both charged for services given to the same patient.
Of the $4.1 million, $3.8 million was recovered, the audit said.
Assemblyman Richard Gottfried, D-Manhattan, who heads the chamber's health committee, said he wasn't surprised by the findings given the size and complexity of the Medicaid system.
"Running a $50 billion system and trying to make corrections while it's running 24-7 is tough," he said.
Gottfried also suggested that the health department could use more people to track Medicaid.
"Nobody ever marched on Albany demanding that there be more clerks in the health department," he said, "although when you squeeze those budgets down, inaccuracies happen."

rkarlin@timesunion.com • 518-454-5758 • @RickKarlinTU
http://www.timesunion.com/local/article/Audit-State-overpays-11-4M-in-medical-costs-4655865.php

 

Supervisor of $63 Million Health Care Fraud Scheme Sentenced in Florida to 10 Years in Prison

U.S. Department of Justice July 08, 2013

WASHINGTON—A former supervisor at defunct health provider Health Care Solutions Network Inc. (HCSN) was sentenced today in Miami to serve 10 years in prison for her central role in a fraud scheme that resulted in more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Wondera Eason, 51, of Miami, was sentenced by U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida. In addition to her prison term, Eason was sentenced to serve three years of supervised release and ordered to pay $14,985,876 in restitution.
On April 25, 2013, a federal jury found Eason guilty of conspiracy to commit health care fraud.
Eason was employed as the director of medical records at HCSN’s partial hospitalization program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, expanded the scheme to North Carolina, opening a third HCSN location in Hendersonville, North Carolina.
Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication, and forgery of thousands of documents that purported to support the fraudulent claims HCSN submitted to Medicare and Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government-sponsored health care benefit programs, including Medicare and Medicaid. Eason directed therapists to fabricate documents, and she also forged the signatures of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.
The “therapy” at HCSN often consisted of nothing more than patients watching Disney movies, playing bingo, and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.
According to evidence at trial, Eason was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County assisted living facilities (ALFs) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia, and Alzheimer’s disease.
From 2004 through 2011, HCSN billed Medicare and the Medicaid program more than $63 million for purported mental health services.
Fifteen defendants have been charged and have pleaded guilty or been convicted by a jury for their roles in the HCSN health care fraud scheme.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina, former Special Trial Attorney William Parente, and Deputy Chief Benjamin D. Singer of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

http://www.fbi.gov/miami/press-releases/2013/supervisor-of-63-million-health-care-fraud-scheme-sentenced-in-florida-to-10-years-in-prison

Fifty-Five Hospitals to Pay U.s. More Than $34 Million to Resolve False Claims Act Allegations Related to Kyphoplasty

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Tuesday, July 2, 2013

Fifty-five hospitals located throughout twenty-one states have agreed to pay the United States a total of more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures, the Justice Department announced today.  Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis.
In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission.  The settlements announced today resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings. 
“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.  “The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of medical providers to maximize profits.”

 The settling facilities, and the amounts they have agreed to pay, include the following:

• Atrium Medical Center, Middletown, OH, has agreed to pay $4,232,992.50.

• Altru Health System, Grand Forks, ND, has agreed to pay $1,492,690.

• Cedars Sinai Medical Center, Los Angeles, CA, has agreed to pay $1,485,846.

• Des Peres Hospital, St. Louis, MO, has agreed to pay $900,000.

• Mount Sinai Medical Center, Miami, FL, has agreed to pay $1,846,194.00.

• New England Baptist Hospital, Boston, MA, has agreed to pay $374,814.48.

• St. Anne’s Hospital, Fall River, MA, has agreed to pay $552,745.

• The Queen’s Medical Center, Honolulu, HI, has agreed to pay $1,055,249.57.

• Trover Health System, Madisonville, KY, has agreed to pay $1,162,837.

• Wayne Memorial Hospital, Goldsboro, NC, has agreed to pay $1,250,000. 

• Twenty-three hospitals affiliated with HCA Inc., Nashville, TN, have agreed to pay a total of $7,145,842.72.  These include:  Aventura Hospital & Medical Center (Aventura, FL); Capital Regional Medical Center (Tallahassee, FL); Coliseum Medical Center (Macon, GA); Coliseum Northside Hospital (Macon, GA); Conroe Regional Medical Center (Conroe, TX); Denton Regional Medical Center (Denton, TX); Doctors Hospital of Sarasota (Sarasota, FL); Edmond Regional Medical Center (Edmond, OK); Fawcett Memorial Hospital (Port Charlotte, FL); Fort Walton Beach Medical Center (Fort Walton Beach, FL); Garden Park Medical Center (Gulf Port, MS); JFK Medical Center (Atlantis, FL); Los Robles Regional Medical Center (Thousand Oaks, CA); North Florida Regional Medical Center (Gainesville, FL); Northlake Medical Center (Tucker, GA); Oklahoma University Medical Center (Oklahoma City, OK);  Palmyra Medical Center (Albany, GA); Redmond Regional Medical Center (Rome, GA); Southwest Florida Regional Medical Center (Fort Myers, FL); St. Lucie Medical Center (Port Saint Lucie, FL); Summit Medical Center (Hermitage, TN); Sunrise Hospital & Medical Center (Las Vegas, NV); and Wesley Medical Center (Wichita, KS).

• Six hospitals affiliated with Lifepoint Hospitals, Inc., Brentwood, TN, have agreed to pay a total of $2,522,502.69.  These include:  Andalusia Regional Hospital (Andalusia, AL); Jackson Purchase Medical Center (Mayfield, KY); Lake Cumberland Regional Hospital (Somerset, KY); Minden Medical Center (Minden, LA); Russellville Hospital (Russellville, AL); and Western Plains Medical Complex (Dodge City, KS).     

• Five hospitals affiliated with Trinity Health, Livonia, MI, have agreed to pay a total of $3,910,017.53.  These include:  Mercy Medical Center – Dubuque (Dubuque, IA); Mercy Medical Center - Sioux City (Sioux City, IA); St. Joseph Mercy Hospital (Pontiac, MI); Mercy Health Partners (Muskegon, MI); and Mount Carmel New Albany Surgical Hospital (New Albany, OH).  

• Four hospitals affiliated with Morton Plant Mease BayCare Health System, Clearwater, FL, have agreed to pay a total of $2,378,325.45.  These include:  Morton Plant Hospital (Clearwater, FL); Morton Plant North Bay Hospital (New Port Richey, FL); Mease Dunedin Hospital (Dunedin, FL); and Mease Countryside Hospital (Safety Harbor, FL).  

 
• Three hospitals affiliated with Baptist Memorial Health Care Corporation, Memphis, TN, have agreed to pay a total of $691,168.  These include:  Baptist Memorial Hospital-Golden Triangle (North Columbus, MS); Baptist Memorial Hospital-Collierville (Collierville, TN); and Baptist Memorial Hospital-Memphis (Memphis, TN).   

• Two hospitals affiliated with Covenant Health, Knoxville, TN, have agreed to pay a total of $1,845,641.74.  These include Parkwest Medical Center (Knoxville, TN) and Methodist Medical Center of Oak Ridge (Oak Ridge, TN).

• Two Hospitals affiliated with Bayhealth Medical Center, Newark, DE, have agreed to pay a total of $1,115,306.37.  These include Bayhealth Kent General Hospital (Dover, DE) and Bayhealth Milford Memorial Hospital (Milford, DE).  

 “This office will continue to ensure that sound medical decisions determine the ultimate treatment of a patient, not the financial interests of hospitals,” said U.S. Attorney William J. Hochul, Western District of New York. “We will not stand by and allow hospitals to inflate their profits based on unnecessary hospital admissions at the expense of the Medicare program or any other federal program. The settlements announced today will help maintain the integrity of this important program and all government-funded programs.”
 “Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “When taxpayers’ dollars are threatened, OIG and its federal partners will take action.”
The Justice Department has now reached settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures.  In addition to today’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.      
 “It has never been more important to protect the Medicare Trust Fund, and this includes ensuring that Medicare is not burdened with the high costs of medically unnecessary admissions.  The Office of Inspector General will continue to ensure that the Medicare Program is protected from fraud, waste, and abuse,” said Tom O'Donnell, Special Agent in Charge of the Office of Investigations of the HHS-OIG New York Regional Office.  “The settlements related to kyphoplasty billing that have been reached with over 100 hospitals represent one of the largest and most successful multi-party health care investigations in the nation.”
 All but four of the settling facilities announced today were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.  The lawsuit was filed in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates.  Mr. Patrick is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala.  The whistleblowers will receive a total of approximately $5.5 million from the settlements announced today.
 This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.7 billion.
The settlements were the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of New York, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
The claims resolved by these settlements are allegations only, and there has been no determination of liability.

http://www.justice.gov/opa/pr/2013/July/13-civ-745.html

University of Louisville Hospital settles false billing claims

By Associated Press

Posted: July 1, 2013 - 4:15 pm ET

University of Louisville (Ky.) Hospital has reached a $2.8 million settlement with the federal government to end allegations that it submitted false Medicare billing claims.

The agreement announced Monday covers a time span of Jan. 1, 2006, through Dec. 31, 2010.

University of Louisville Hospital operates a unit within the emergency department to address non-urgent care. The center, FirstCare, is staffed by University Medical Center-employed physician assistants and nurse practitioners under the direction of the Department of Emergency Medicine physicians.

According to the settlement, the salaries and benefits paid to FirstCare physician assistants and nurse practitioners were claimed on UMC cost reports filed with Medicare. At the same time, University Emergency Medicine Associates physicians treated the employees as their own and at times billing and collecting from Medicare for their professional services.

UMC disclosed in 2011 to federal prosecutors that it may have violated federal law.

http://www.modernhealthcare.com/article/20130701/INFO/307019983/university-of-louisville-hospital-settles-false-billing-claims

Senator Asks States If They Alert Medicare to Problem Physicians

by Charles Ornstein, Tracy Weber and Jennifer LaFleur
ProPublica, June 28, 2013, 11:28 a.m.

A key U.S. senator sent letters to all 50 states this week asking how they sanction doctors in their state health programs and whether they alert the federal government when they do.

In his letters, Sen. Charles Grassley, R-Iowa, cited examples from a ProPublica report last month that found doctors who had been kicked out of state Medicaid programs for the poor were able to continue prescribing drugs to elderly and disabled patients in Medicare.

In 2005, for example, Florida booted Dr. Enrique Casuso from its Medicaid network using a provision that allows it to end contracts without cause on 30 days' notice. A memo justifying his removal said Casuso was seeing up to 81 Medicaid patients a day in addition to his non-Medicaid cases. Investigators found cases in which he lacked "awareness or oversight of the medication prescribed."

A copy of Casuso's termination letter was sent to Medicare. But Casuso continues to prescribe in Medicare's drug program, known as Part D, ProPublica reported.

In 2010, he prescribed more antipsychotics to elderly patients – 8,900, including refills dispensed – than any other doctor in the country. Many of those went to patients with dementia even though warnings from the Food and Drug Administration say the drugs increase the risk of death in such patients.

Casuso defended his prescribing, telling ProPublica the drugs were necessary to keep his patients safe and to calm them.

Physicians can be terminated from Medicaid for a variety of reasons. If they are terminated with cause, the state must prove misconduct. A termination without cause doesn't require any burden of proof. It may be because a doctor has stopped seeing Medicaid patients or because it is a quicker way of severing ties with a doctor suspected of wrongdoing.

The concern, Grassley wrote, is that while states use "without cause" terminations to quickly remove doctors from their Medicaid networks, the actions are not considered disciplinary and can't be used against doctors by Medicare. Terminations with cause, which are formal sanctions, can take much longer because they can be appealed.

"States' current practice of without cause termination from Medicaid may speed their ability to protect Medicaid patients, but it can expose Medicare recipients to potentially unsafe medical treatment and keeps tax dollars flowing to unworthy providers," wrote Grassley, the ranking Republican on the Senate Judiciary Committee.

Medicaid is jointly funded by states and the federal government, but is run by the states. Medicare is run by the federal government.

Grassley asked each state Medicaid program to indicate how it determines when to use the "without cause" provision and how it informs Medicare of its actions, if at all. Once states respond, Grassley plans to ask Medicare whether and how it acts on this information.

Physicians can continue to prescribe in Medicare unless they have been formally excluded from the program.

This is not the first time Grassley has questioned how Medicaid monitors prescribing by physicians and others. In 2010, he sent letters to all states asking for the names of the top prescribers of painkillers, antianxiety drugs and antipsychotics in their Medicaid programs. He followed up last year to ask whether the states had cracked down on those who wrote large numbers of prescriptions.

The senator also has focused on doctors' ties to drug companies. He was a key proponent of the Physician Payment Sunshine Act, which requires all drug and medical device makers to make public their payments to doctors beginning next year. And in 2009, he sent letters to prominent medical organizations seeking details about their industry financial support.

Justin Senior, the deputy secretary of Florida's Agency for Health Care Administration, said earlier this year that the ability to terminate a doctor's Medicaid contract without cause is "a tool that we can use when we see someone we feel might be doing something that is inappropriate."

In Florida, if physicians are expelled for cause from Medicaid, they cannot renew their state medical licenses. This can make the legal battle over such a termination much fiercer.

But Senior said that the physicians who are removed without cause have no blemish on their record. "They still have a license to practice medicine," he said. "They can happily make a living billing Medicare, Blue Cross ... billing whoever is willing to do business them."

Medicare could use these cases as tips to pass onto its own fraud investigators.

In his letter, Grassley cited two other examples from ProPublica's report:

• Chicago psychiatrist Michael Reinstein wrote an average of 20,000 prescriptions for the antipsychotic clozapine in Part D each year between 2007 and 2009, and another 14,000 in 2010. Last year, he was suspended from Illinois Medicaid, and the Department of Justice has sued him for fraud. But he remains able to provide services under Medicare. Reinstein has treated patients at more than 30 Chicago-area nursing homes and long-term care facilities. He has defended his prescribing in media interviews.
• Miami psychiatrist Fernando Mendez-Villamil was terminated without cause from Florida Medicaid in 2010 amid questions about his prescribing of mental health drugs. The Florida medical board also has accused him of giving patients as young as 3 a variety of such drugs without properly diagnosing or monitoring them. He remains eligible to prescribe in Medicare. His lawyer has said his client had done nothing wrong.

The Centers for Medicare and Medicaid Services, which oversees both programs, did not respond to a request for comment. Officials have previously declined to comment on the physicians named in this story.

In a statement, Grassley said he wants to "get first-hand information" to make sure actions taken by Medicaid programs don't leave Medicare patients at risk.

http://www.propublica.org/article/senator-asks-states-if-they-alert-medicare-to-problem-physicians

"Worldwide credit card transactions, the credit card fraud rate is 0.04 percent, compared to almost 8 percent, 9 percent, 10 percent of Medicare fraud."

Peter Roskam on Wednesday, June 12th, 2013 in an interview with Fox News

Medicare fraud rate is 8 to 10 percent, says Roskam of Illinois

Fraud by its very nature tries to hide from view. So when Rep. Peter Roskam, R-Ill., talked about how big the problem is for the Medicare program, he gave himself some wiggle room.

Roskam was talking to Fox News about a bill he has that would borrow tools used in the credit card industry to pare down the tens of billions of dollars that criminal gangs and unscrupulous operators pocket from the federal government’s health care program for the elderly.

"Worldwide credit card transactions, the credit card fraud rate is 0.04 percent," Roskam told Fox News. "Compared to almost 8 percent, 9 percent, 10 percent of Medicare fraud."

When PolitiFact checked the size of Medicare fraud five years ago, we quickly discovered that hard and fast numbers are hard to come by. In this fact-check, we’ll examine Roskam’s estimate of 8 to 10 percent and see what sources he relies on.

Before we dive into Medicare fraud, a review of credit card studies shows that Roskam is pretty much on the mark when he speaks of a 0.04 percent rate. A 2010 report from the Federal Reserve Bank of Kansas City gives a fraud rate of 0.05 percent for U.S. issued cards, both debit and credit. Roskam’s office pointed us to a trade publication, the Nilson Report, that cites an international rate of 0.04 percent rate.

On Medicare, Roskam’s office cited a Government Accountability Office report, a watchdog website created by an executive order from President Barack Obama, and an article from theU.S. Administration on Aging. All three give us rates that range from 7.9 percent to 8.5 percent for the largest Medicare program, and up to 11 percent for a smaller program, Medicare Advantage.

While the fraud rates fall into Roskam’s range, none of them is talking about fraud alone. Rather, they address the much broader category of improper payments. If a doctor orders too many tests, or provides a service but submits the wrong payment code, those come under the umbrella of improper payments.

Out and out fraud is not as large as improper payments, but it can be egregious. The FBI recently charged 25 people in Miami for allegedly bribing Medicare beneficiaries and then using their account numbers to bill for services that were unnecessary or never provided. The government says the scheme netted the conspirators about $44 million.

Malcolm Sparrow, professor of public management and a specialist in corruption control at Harvard’s Kennedy School, told us that fraud and improper payments are far from identical.

"There is a serious problem with conflating these different types of overpayment," Sparrow said. "They are quite different in origin and require very different types of control mechanisms."

When we raised this with Roskam’s office, his staff sent us several examples where Roskam has spoken collectively of fraud, waste and abuse. On Fox News, however, he spoke only of fraud.

PolitiFact also found a study that restores a measure of credibility to Roskam’s estimate. Donald Berwick, a former head of the Centers of Medicare and Medicaid Services or CMS, the agency that runs Medicare, collaborated with an analyst at RAND to produce a landmark paper in 2012 in JAMA, the Journal of the American Medical Association.

That paper offers three estimates of fraud in the Medicare and Medicaid programs: a low of 3 percent, a medium of 6 percent and a high of 10 percent. CMS told us they have no official estimate of fraud but pointed us to this study, and they cited FBI figures that mirror the numbers in this paper.

If it turns out that the high end of the range in the JAMA article is correct, then Roskam is in the right ballpark.

Of course, nobody knows for sure because fraud is a crime, and criminals don’t advertise their work.

Two caveats for policy makers

The JAMA article doesn’t stop at Medicare and Medicaid. It also looks at fraud in the health care sector as a whole, both public and private. The fraud rates don’t change much when the private sector is included.

For Sparrow at Harvard, this is no surprise.

"The systems and structures they use for control are the same, across public, private, and not-for-profit programs," Sparrow said. "They all tend to share the same strengths and weaknesses, and are roughly equally vulnerable."

Put another way, the nature of the American health care system lends itself to a certain level of fraud, and the Medicare program is no more and no less susceptible to this type of crime.

Sparrow says this also suggests the comparison to the credit card industry might be less useful than might appear. In the first place, the transactions are much simpler. When a thief tries a scam with a credit card, the card holder tends to notice by the next bill. In general, this kind of fraud is more easily detected and tracked. But Sparrow says there’s a bigger difference.

"The losses are borne by banks," he said. That creates a powerful incentive, in real time, to control the problem. In health care, the incentives are "more diffuse and ambiguous."

Our ruling

Roskam said the Medicare fraud rate is 8 to 10 percent. His office pointed us to various documents that analyzed the problem of improper payments, an issue that mixes fraud together with nominally legal activities such as referring patients for more tests than are necessary. This suggested Roskam was using an inflated estimate of fraud. However, a recent study tends, in the worst-case analysis, to support Roskam’s figures.

Roskam’s comparison to credit cards overlooks many key differences between the structures of the health care and credit card industries, and it tends to obscure the systematic nature of fraud in health care, whether public or private. But Roskam is right that credit card fraud is a tiny percentage of all transactions.

We rate the statement Mostly True.
http://www.politifact.com/truth-o-meter/statements/2013/jun/17/peter-roskam/rep-roskam-says-medicare-fraud-rate-8-10-percent/

Medicare fraud and for-profit hospitals:

Medicare fraud and for-profit hospitals:

A story that never ends

Sunday, CBS’ Sixty Minutes took a close look at Health Management Associates (HMA), a for-profit hospital chain that, according to its employees, has “relentlessly pressured its doctors to admit more and more patients – regardless of medical need-in order to raise revenues.”healthinsurance.org contributor

“We talked to more than 100 current and former employees and we heard a similar story over and over,” CBS correspondent Steve Kroft reported. Emergency room physicians were told “that if they didn’t start admitting more patients to the hospital, they would lose their jobs.” The orders came from the top:

With 71 hospitals in 15 states, HMA is the fourth-largest for-profit chain in the country. Last year, it raked in revenues of nearly $5.8 billion; half of that came from Medicare and Medicaid. In other words, taxpayers were footing the bill for a large share of those unnecessary hospitalizations.

Patients also paid. As one doctor observed: “If you are put into the hospital for reasons other than a good, justifiable medical reason, it puts you at significant risk for hospital-acquired infections and what we would refer to as ‘medical misadventure’” (i.e. preventable medical errors).

“Putting heads on beds” – an old story

The piece was shocking. But it is not a new story. It is an old story. To be more precise, it is a never-ending story. In Money-Driven Medicine: The Real Reason HealthCare Costs So Much, I profiled several for-profit hospital companies that did just what Health Management Associates has done: “put heads on beds” even though the patient didn’t need to be hospitalized.

At Tenet, in Redding, California, patients weren’t just hospitalized, they underwent heart surgery. An investigation would reveal that in many cases, they “had no serious cardiac problems whatsoever.”

An FBI affidavit estimated that in one-quarter of all cases, Tenet’s two “rainmaker” heart surgeons were slicing open patients who should never have been on an operating table. Other doctors tried to alert the hospital’s administration. They were ignored.

Some of those patients did not survive. Others were crippled. All suffered psychological trauma.

HCA: Florida Governor Rick Scott’s back story

In 1997, Health Corporation of America (HCA) made headlines when FBI agents swarmed HCA offices in five states, and found evidence that at HCA, executive salaries hinged on meeting financial targets such as “growth in admissions and surgery cases.”

The FBI also discovered that HCA had been keeping two sets of books – one to show to Medicare, a second that contained the real numbers. Ultimately, the investigation would reveal that the hospital chain had been bilking Medicare while simultaneously paying kickbacks to physicians who steered patients to its hospitals.

Just as at HMA, whistleblowers said that the directives came from the top. Rick Scott, who would later become governor of Florida, was the CEO of HCA.

In 2000, HCA finally settled with the government, pleading guilty to no fewer than 14 felonies – the biggest case of Medicare fraud ever. The company paid $1.7 billion in fines.

No one went to jail – probably because the Frist family (as in Senate Majority Leader Bill Frist) had founded the hospital and hired Scott to run it. (Some would say he was hired to do their dirty work.)

HCA settled with the government shortly before the Senator’s brother, Dr. Tommy Frist, (who served as HCA’s chairman) was scheduled to be deposed by the government’s attorneys.

Rick Scott was never indicted, and waltzed away with $10 million in severance. In 2009, when he led a committee to kill health reform, I told his story on HealthBeat, and wrote about him again when he became Florida’s governor.

For-profit hospital chains: the pattern

Tenet, HCA and HMA are just three examples of corrupt for-profit hospitals. After defrauding Medicare and hurting patients for years, these chains are caught, and pay a huge fine. No one goes to prison. Frequently they change the name of the chain, paint the front door, hire executives who are cronies of the former management team, and start all over again.

Update: Sure enough, HMA CEO Gary Newsome has announced that he will be retiring July 1. Newsome, 55, said in a news release that he is stepping down after being “called by the First Presidency of the Church of Jesus Christ of Latter-day Saints to serve as the president of its Uruguay-Montevideo mission.” (It appears that he’s getting out of Dodge.)

Newsome, who has been at the helm of the company since September 2008, took home $8.3 million in total compensation last year.

Meanwhile, the word on Wall Street is that HMA is now a takeover target. Bloomberg reports that, according to financial analysts, Community Health Systems (CHS), a sister for profit hospital chain is the most likely suitor.

HMA and CHS have quite a lot in common: CHS has disclosed that it, too, has received requests for information from numerous law-enforcement agencies regarding its admissions policies, some of which are based at least in part on whistle-blower allegations. Unfazed by charges of wrong-doing, shareholders have sent HMA’s share price soaring, up 25% in a week. ( Typically, takeover rumors spur buying.)

Why do they do it?

The hospital industry is a tough business, and it’s not easy to make the fat profits Wall Street expects. This is why the whole idea of trying to make hospitals “for-profit” is a truly terrible idea. Too often, shareholders’ interests trump patients’ interests.

More importantly, the hospital business is a labor-intensive, capital-intensive business. It just about impossible to reap the returns investors demand – unless you become creative.

Non-profits follow the for-profits

This is not to say that for-profits have a monopoly on fraud. A few years ago, a whistle-blowing doctor at a non-profit Catholic hospital contacted me. The administration at his hospital was pressuring doctors to admit ER patients. The hospital ultimately closed down his practice, transferring his patients to other doctors at the hospital. But he didn’t back down.

Unfortunately, no one at the hospital would talk to me. And none of the doctors’ colleagues would talk on the record – though they had all heard the CEO tell staff they were going to have to hike admissions from the ER.

His partner did talk to me and corroborated the story, but wouldn’t talk on the record. It is so sad; people are so afraid.

I was seriously disappointed. This had all the elements of a great story: The Catholic Church! Nuns! Blood! Money! A guy who is willing to stand up!

I will always remember this physician. He was in his early 60s, and devastated when they closed his practice and he lost so many long-time, patients. Many of them were older, and he told me he kept a notepad by his bed, in case, during the night, he thought of something that he should check on regarding one of his patients.

After he lost his practice, his girlfriend left him.

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Posted June 13, 2013

- See more at: http://www.healthinsurance.org/blog/2013/06/13/medicare-fraud-and-for-profit-hospitals/#sthash.J6pNCZCi.dpuf

Medlocks convicted of Medicare fraud

NASHVILLE -- A couple accused of defrauding the federal government through the fake Medicare bills has been convicted various charges in connection with the case.

Woody Medlock, Sr., 69, and his wife, Kathy Medlock, 57, of Murfreesboro, who are the former owners of Murfreesboro Ambulance Service, have been convicted by a jury on charges of conspiracy, Medicare fraud, wire fraud, and aggravated identity theft, announced David Rivera, acting U.S. attorney for the Middle District of Tennessee.

A third defendant, Woody “Bubba” Medlock Jr., was acquitted of similar charges. 

According to the evidence presented at trial and the indictment, from 1996 through September 2008, the Medlocks conspired and engaged in a scheme to defraud Medicare and Medicaid by submitting claims for payment for the transportation of patients who were not qualified to receive ambulance transportation. 

Evidence at trial showed that the Medlocks submitted or caused to be submitted, through Murfreesboro Ambulance Service, fraudulent claims totaling more than $1.6 million to Medicare and Medicaid for reimbursement of ambulance transports of patients to and from dialysis treatments.

Testimony at trial further showed that these fraudulent claims falsely represented that patients were on stretchers when the patients were actually transported in the front seat of the ambulance or in a seat in the back of the ambulance and were not on stretchers. 

Fraudulent claims also stated that patients were transported individually when in fact, two patients had been transported simultaneously in one ambulance. 

Both defendants were convicted of two counts of aggravated identity theft for using the names and Medicare numbers of patients without lawful authority in submitting claims. 

Kathy Medlock was also convicted of an additional count of aggravated identity theft for use of a doctor’s name in forging and submitting multiple medical necessity forms as part of a Medicare audit. 

“This case represents another example that this office will hold individuals accountable when they steal from health care programs intended to help the elderly and the most needy citizens,” Rivera said. “This office, along with our law enforcement partners at the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, and the Tennessee Bureau of Investigation, will relentlessly pursue those who choose to defraud the Medicare and Medicaid programs.”

“The Medlocks were running a taxpayer-funded taxi service disguised as an ambulance company,” said Derrick L. Jackson, the special agent in charge at the U.S. Department of Health and Human Services for the Office of Inspector General. “The flow of Medicare money has been shut off to this husband and wife team.”

"Today's verdict validates the FBI's commitment to investigate those who take advantage of our health care system and defraud the American public," said A. Todd McCall, the special agent in charge of the FBI's Memphis division. 

"We will continue to work tirelessly with our law enforcement partners and the U.S. Attorney's Office to investigate and prosecute those who commit health care fraud."

The Medlocks face up to 20 years in prison, plus an additional mandatory two years, for aggravated identity theft and a $250,000 fine.

Any sentence following conviction will be imposed by the court after consideration of the U.S. sentencing guidelines and applicable federal statutes.

U.S. Renal Care to Pay $7.3 Million to Resolve False Claims Act Allegations

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Tuesday, May 21, 2013

U.S. Renal Care to Pay $7.3 Million to Resolve False Claims Act Allegations

Allegedly Submitted False Medicare Claims for Drug Provided to Dialysis Patients

U.S. Renal Care, headquartered in Plano, Texas, has agreed to pay $7.3 million to resolve allegations that Dialysis Corporation of America (DCA) violated the False Claims Act by submitting false claims to the Medicare program for more Epogen than was actually administered to dialysis patients at DCA facilities, the Justice Department announced today.  U.S. Renal Care, which acquired DCA in June 2010, owns and operates more than 100 freestanding outpatient dialysis facilities throughout the United States.
Epogen is an intravenous medication that is used to treat anemia, a common condition afflicting patients with end-stage renal disease.  Epogen vials contain a small amount of medication in excess of the labeled amount, known as “overfill,” to compensate for medication that may remain in the vial after extraction and in the syringe upon administration.  The United States contends that from January 2004 through May 2011, DCA billed for 10-11% overfill whenever it administered Epogen.  However, because of the types of syringes DCA used, the United States alleges that DCA was not able to withdraw and administer 10-11% overfill every time it administered Epogen to patients, and thus submitted false claims to Medicare that overstated the amount of Epogen that it was actually providing.
“Today’s settlement shows that the Justice Department will aggressively pursue those health care providers who cut corners at the expense of the American taxpayers, such as by billing for items and services that were not provided,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.  “We will continue to protect scarce Medicare dollars.”
“Medical care providers who submit false claims for services and products that were not actually delivered threaten the financial viability of the Medicare Trust Fund,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.
“Health providers billing for phantom services cheat taxpayers, cheat programs straining to pay for vitally needed care, and cheat patients who pay inflated copayments,” said Nick DiGiulio, Special Agent in Charge, Office of Inspector General, U.S. Department of Health and Human Services for the region including Maryland.  “We will continue to work with the Department of Justice to ensure health professionals get reimbursed only for services they actually provide”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
The allegations settled today arose from a lawsuit filed by Laura Davis against DCA under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery.  Ms. Davis will receive $1,314,000 as part of today’s settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the District of Maryland with assistance from the Office of Inspector General for the Department of Health and Human Services.  The claims settled by this agreement are allegations only, and there has been no determination of liability.  The whistleblower suit is captioned United States ex rel. Laura Davis v. Dialysis Corporation of America, No. 1:08-cv-2829 (D. Md.).

California-based healthcare facility pays $14.1M

June 5, 2013 11:27 AM
By STEPHANIE OSTROWSKI

WASHINGTON (Legal Newsline) – After allegedly violating the False Claims Act, healthcare facility Adventist Health System/West and its affiliated hospital White Memorial Medical center have agreed to pay $14.1 million to settle with the United States and California.

The settlement announced May 3 resolves allegations that Adventist Health physicians referred patients improperly to White Memorial and were compensated. According to the Department of Justice assets were transferred at less than fair market value, including medical and non-medical supplies and inventory.

The compensation the referring physician received from White Memorial violated the Anti-Kickback Act, Stark Statute, and by extension, the False Claims Back according to the United States.

About $11.5 million will be paid to the U.S. Government and the majority will benefit the Medicare Trust Fund. The remaining $2.6 million will be paid to California’s Department of Health Care Services.

“Kickbacks and other unlawful financial arrangements cost taxpayer dollars and undermine the integrity of medical judgments,” said Stuart F. Delery, the Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to making sure that physician referrals do not involve payments made in violation of federal law.”

Prohibited by the Anti-Kickback Act is the offering, paying soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and/or other federally-funded programs.

The Stark Statute prohibits a hospital from submitting claims for referrals made by physicians who have a financial arrangement with the hospital.

Both the Anti-Kickback Act and Stark Statute are intended to ensure that a physician’s medical judgment and decisions are based on the best interest of the patient and not on financial incentives.

“Payouts made by hospitals and clinics – as the government alleged in this case – raise substantial concerns about physician independence and objectivity,” said Ivan Negroni, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services San Francisco region.  “Taxpayers and vulnerable patients rightfully expect such payments to be investigated and pursued.”

Under the qui tam, or whistleblower, provisions of the False Claims Act, private citizens can bring civil actions on behalf of the United States and share in any recovery. In this case, the whistleblowers will collectively receive $2,839,219.

According to the settlement, White Memorial has entered into a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure future compliance with federal health care benefit program requirements.

Adventist Health is headquartered in Roseville, Calif., and operates 19 hospitals and over 150 clinics in California, Hawaii, Oregon and Washington.  White Memorial Medical Center is a teaching hospital located in Los Angeles.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services.

The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.

The claims settled by this agreement are allegations only.

This entry was posted in California, Federal Government, News, State AGs, States and tagged Adventist Health System/West,Department of Justice, White Memorial Hospital. Bookmark the permalink.

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.