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Largest Hospice Chain Sued For Alleged False Billings To Medicare

America’s largest for-profit hospital chain, Vitas Hospice Services LLC, and other hospice subsidiaries of Chemed Corp are being sued by the US Justice Department for alleged false billings for Medicare hospice services.

The suit (Complaint) is also filed against Vitas Healthcare Corporation. Vitas provides hospice services to patients in a total of 18 states – Wisconsin, Virginia, Texas, Alabama, Pennsylvania, Ohio, New Jersey, Missouri, Michigan, Kansas, Indiana, Illinois, Georgia, Florida, Delaware, Connecticut, Colorado, California, and the District of Columbia.

Vitas was acquired by Chermed in 2004. Chermed also owns ROTO-ROOTER, a plumbing and drain service.

What is Medicare hospice benefit?

Patients who elect palliative treatment are eligible for Medicare hospice benefit. Palliative care focuses on improving the patient’s quality of life by relieving symptoms of discomfort and pain, as well as the stress associated with serious and often terminal illnesses, regardless of the diagnosis. The aim also includes improving the quality of life for the patient’s family members.

Medicare hospice benefit is only available for people with a terminal illness, whose life expectancy is six months or less.

When patients under Medicare receive hospital services, they are no longer administered treatment designed to cure their illness. Medicare reimburses for a range of levels of hospice care, including crisis care (continuous home care) – this is available for those experiencing a brief period of crisis (acute medical symptoms). Crisis care under Medicare involves patients whose acute medical symptoms require immediate and short-term provision of specialized nursing services, the aim being to keep the patient at home.

The reimbursement rate for crisis care is the highest daily rate hospices can bill Medicare. A crisis care patient whose services come from a hospice represents hundreds of extra dollars per day from Medicare for that hospice.

Chemed and Vitas allegedly made false claims to Medicare for crisis care services

According to a press release by the US Department of Justice:

“The government’s complaint alleges that Chemed and Vitas Hospice knowingly submitted or caused the submission of false claims to Medicare for crisis care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements.”

The complaint alleges that the companies actually had “crisis days targets” that were to be billed to Medicare. The companies are also accused of using aggressive marketing tactics and forcing their own personnel to raise the numbers of crisis care claims that were submitted to Medicare, without considering whether these services were suitable for the patient or every really provided.

The Department of Justice gave an example of a patient who was playing bingo during one of the crisis care days – during that day Vitas had billed Medicare for crisis care.

The Department of Justice added:

“Chemed and Vitas knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill.

The companies allegedly paid bonuses to staff based on the number of patients enrolled in the program and based on patients who were admitted for longer lengths of stay, and took adverse employment actions against marketing representatives who did not meet monthly hospice admissions goals.

According to the Complaint, these business practices resulted in the admission of patients who were not eligible for hospice care.

According to the Department of Justice, Vitas is accused of admitting a patient to a hospice who had no signs of a terminal condition and whose medical records showed she was “very healthy given her age.”

Chemed and Vitas are accused of violating the False Claims Act, misspending tens of millions of taxpayer dollars from the Medicare program.

Stuart F. Delery, Acting Assistant Attorney General for the Civil Division, said “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. 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. The Department of Justice will take swift action to protect taxpayer dollars and make sure that Medicare benefits are available to those who truly need them.”

The Justice Department says it has recovered over $10.3 billion since January 2009 in cases involving fraud against federal health care programs thanks to the False Claims Act. Total recoveries in False Claims Act cases since January 2009 have exceeded $14.2 billion.

This matter was investigated by the:

  • The U.S. Attorney’s Office for the Western District of Missouri
  • The U.S. Attorney’s Office for the Northern District of Texas
  • The U.S. Attorney’s Office for the Central District of California
  • The Department of Health and Human Services’ Office of Inspector General
  • Commercial Litigation Branch of the Justice Department’s Civil Division

The Justice Department emphasizes that the claims against Chemed and Vitas “are allegations only, there has been no determination of liability.”

The Complaint against Chemed and Vitas seeks treble damages, statutory penalties, and the costs of the action, plus interest.

The lawsuit is captioned United States v. Vitas Hospice Services LLC, et al.(W.D. Mo.).

How did Chemed and Vitas Respond to the suit?

Chemed and Vitas say they intend to defend this lawsuit “vigorously”. In an online communiqué, the company claims to have made considerable investments in controls, systems and procedures to maintain the highest industry standards and to make sure all its hospices comply fully with regulatory requirements. “Our compliance efforts are designed to ensure our services are provided only to eligible patients.”

Record $4.2 billion recovered in 2012 in fight against health care fraud

According to the HHS (Health and Human Services Department, USA) a record-breaking $4.2 billion were recovered in 2012 as a result of the federal governments drive to reduce health care fraud.

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