Florida-based Hope Hospice, a subsidiary of Hope Healthcare, has settled a False Claims Act case with the U.S. Department of Justice for $3.2 million. The Justice Department alleged that the organization knowingly certified patients for hospice care who were not truly eligible and submitted false claims to Medicare, Medicaid and TRICARE, which provides insurance to military personnel and families.
Hospice organizations nationwide are under increasing legal and regulatory scrutiny related to medical necessity complaints under the False Claims Act.
A 2019 report from the law firm of Bass, Barry, and Sims indicated that a leading cause of fraud cases involves allegations of hospices billing Medicare for services for which patients were not eligible. This resulted in several multi-million dollar settlements during 2018, with amounts ranging from $1.24 million to $8.5 million.
“Hospice care is designed to provide quality end-of-life care and is only medically appropriate – and reimbursable by Medicare – for terminally ill patients,” said Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General (OIG). “OIG, in concert with our investigative and prosecutive partners, will continue to vigorously pursue and hold accountable providers who knowingly submit fraudulent claims to Medicare and Medicaid.”
The suit alleged that Hope Hospice billed federal payers for care provided to patients who were not terminally ill for at least part of their hospice stays between July 1, 2012 and June 30, 2016. Longer than average lengths of stay represent a common red flag that can attract regulatory attention. Live discharges also draw the eyes of enforcers, though they were not a factor in this case.
The federal complaint also alleged that Hope Hospice admitted patients to general inpatient care who did not actually need that higher level of services.
The hospice did not admit any liability or wrongdoing in the settlement, characterizing the case as a disagreement with the government regarding documentation of care provided to 1% of the company’s patients during the time period in question. Questions about documentation are often a contributing factor to False Claims Act cases, federal audits or other regulatory or legal actions.
“For 40 years, Hope has provided everyone in our care with the comfort and peace they deserve at the end of life. If our organization had endless resources, we would continue our efforts to prove the care in question was necessary and appropriate,” said Hope President and CEO, Samira K. Beckwith in a statement. “The decision to end this expensive legal distraction allows Hope to dedicate our resources to caring for the thousands of people who rely on Hope every day. As we navigate this global pandemic, our resources are more precious than ever.”
In addition to the cash settlement the hospice has agreed to sign a Corporate Integrity Agreement with the OIG, which is intended to promote compliance with applicable laws and regulations.
The settlement ends a suit initially brought to the U.S. District Court for the Middle District of Florida by former Home Hospice employee Margaret Peters, who sued under whistleblower status, called qui tam in legal terminology. Under the law, Peters will receive 19% of the settlement funds.
“Our seniors rely on the hospice program to provide them with quality care, dignity and respect, when they are terminally ill and need end-of-life care,” said U.S. Attorney Maria Chapa Lopez. “This investigation and settlement demonstrates our continued commitment to combating health care fraud and protecting the financial solvency of this critical benefit.”
The case is a signal that hospices must continue to be vigilant regarding documentation and other potential regulatory red flags, despite a recent major case in which the court sided with the hospice. Earlier this year, in a similar case against the hospice provider AseraCare, the Eleventh Circuit Court of Appeals in September agreed with the Northern District of Alabama that a mere difference of physician’s opinions on a terminal patient’s prognosis does not indicate falsity under the False Claims Act.
Following the conclusion of that case, home health and hospice provider Amedisys (NASDAQ: AMED) acquired AseraCare for $235 million.
Despite the settlement, Hope Hospice continues to express confidence in its determination of hospice eligibility.
“We are dedicated to serving people in our care with the utmost integrity,” said Beckwith. “I fully support the clinical judgments of the experts on our team and have confidence in our compliance, regulatory, and quality standards. Our organization remains committed to providing the right care at the right time for everyone who needs Hope.”