Hospice Company to Pay $4.4M in Pair of Whistleblower Settlements Over Alleged Fraud

Two subsidiaries of a hospice company have each agreed to settle separate allegations by whistleblowers that they falsely billed taxpayers by defrauding federal health care programs, the U.S. Department of Justice has announced.

Compassionate Care Hospice of Atlanta has agreed to pay $2.4 million to resolve claims that it paid kickbacks to doctors in exchange for patient referrals. Compassionate Care of Gwynedd Inc., based in Bensalem, Pennsylvania, has agreed to pay $2 million to settle allegations that it admitted patients who did not need hospice care. Both companies are subsidiaries of Compassionate Care Hospice Group Inc., a Florida corporation with headquarters in Parsippany, New Jersey.

The settlements, announced earlier in July, are just the latest example of government oversight of alleged fraud in hospice facilities and nursing homes—sections of the health care industry that have been subject to heightened scrutiny in recent years. Last year, the DOJ launched 10 regional elder justice task forces to pursue nursing homes and other long-term care providers that provide inadequate care to their residents.

"The … settlement in this case should be a deterrent to those who would so selfishly circumvent our federal healthcare programs to their benefit," FBI Special Agent in Charge David LeValley said in a statement about the Atlanta hospice settlement. "Rest assured the FBI is committed to diligently investigating those who would defraud our federally funded healthcare programs, depriving those who truly depend on them." 

A representative from Compassionate Care Hospice Group did not respond to requests for comment. Neither the website of the Atlanta nor the Pennsylvania subsidiary appears to be working.

In the Atlanta case, the facility, between 2007 and 2011, paid kickbacks to five doctors for referrals and certifications that patients were eligible for hospice services, according to the DOJ. The company then submitted false claims to Medicare and Medicaid for services provided to these patients, the agency said.

The False Claims Act lawsuit was filed by former employees Cathy Morris and Josie King, who claimed that they consistently observed patients with chronic but not terminal conditions who were not appropriate for hospice care receiving such care, according to the complaint. Court documents do not indicate how much money, if any, Morris and King will receive as their share of the $2.4 million recovery.

In the Pennsylvania case, the facility, between 2005 and 2011, admitted patients who did not need hospice care and billed Medicare for these medically unnecessary services, the DOJ said. The admissions were based on a nonmedically justified diagnosis of "debility," it added.

The two anonymous whistleblowers who filed this False Claims Act suit—both registered nurses who worked at the facility—will receive more than $350,000 for their share of the recovery.

In both cases, the claims resolved by the settlements were allegations only, and there was no determination of liability, according to the DOJ.

Contact reporter Kristen Rasmussen at krasmussen@alm.com.

Contributing Author

Kristen Rasmussen

Rasmussen is a Law.com reporter.

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