MJHS Hospice Settles Whistleblower Action for $5.225 Million

MJHS Hospice and Palliative Care in New York settled a whistleblower case against a former employee under the civil False Claims Act for $5.225 million. The hospice acknowledged resolution of the private citizen action filing in a statement shared with Hospice News.

“The allegation was that medical record documentation for hospice levels of care for general inpatient care and continuous home care was insufficient for certain limited periods to justify the related Medicare or Medicaid reimbursement for some of the claims submitted in the period 2011 to 2015,” MJHS indicated in its statement.

Enacted in 1986, the False Claims Act (FCA) aims to combat health care fraud and redress false claims for federal funds.

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Hospice organizations nationwide are under increasing legal and regulatory scrutiny related to medical necessity complaints under the law.

“MJHS Hospice has updated its policies to assure that our services are consistent with these important regulations. This action did not question or challenge that high-quality care was in fact provided by our dedicated hospice team,” read the MJHS Hospice statement. “Ultimately, this came down to us providing additional services that, while meaningful to our patients, were not eligible for reimbursement under applicable health care rules. MJHS Hospice remains devoted to providing our patients with the right care, at the right time, in the right setting.”

The hospice declined further comment beyond the statement.

A number of FCA claims resulted in settlements reaching into the millions, with cases against hospice providers growing among them. Earlier this month, Florida-based Hope Hospice, a subsidiary of Hope Healthcare, settled an FCA case for $3.2 million earlier this month. The Justice Department alleged that the organization knowingly certified patients for end-of-life care who were not truly eligible, submitting false claims to Medicare and Medicaid.

In January, the U.S. Department of Treasury reported recovered more than $3 billion in the past fiscal year from False Claims Acts. A majority of $2.6 billion stemmed from lawsuits involving the health care industry, including hospice organizations.

Scrutiny from federal agencies shows no sign of slowing down as the U.S. Centers for Medicare & Medicaid Services (CMS and the U.S. Justice Department increasingly hones in on hospice providers in recent years due to live discharges and re-certifications. These issues have resulted in an increasing number of CMS audits, Health and Human Services Inspector General investigations, and litigation.

Another major FCA case was resolved earlier this year. Similar to the MJHS Hospice suit, allegations in an FCA case against hospice provider AseraCare case were filed by former employees. The case’s outcome set an important precedent in March of this year, with AseraCare agreeing to a $1 million settlement in a longstanding Qui Tam FCA case that began in 2008. Arguments in the United States vs. AseraCare tried to untangle the complex question of whether live discharges from hospice care were the result of deliberate fraud or occurred because of the inherent difficulty of predicting a patient’s life expectancy. AseraCare was subsequently acquired by hospice and home health provider Amedisys (NASDAQ: AMED).

Whistleblower claims make up a large bulk of the actions filed, according to Deputy Associate Attorney General, Stephen Cox.

“A significant percentage of [FCA] cases come to our attention because of the statute’s qui tam provision, which allows whistleblowers to file lawsuits on behalf of the United States,” said Cox in a January statement. “Fraudulent conduct can drive up consumer costs, undermine competition, and in some cases, even put people’s lives at risk. By effectively enforcing the False Claims Act, we protect the taxpayer, we deter bad actors, we protect victims and we level the playing field in the marketplace.”

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