US Justice Department’s Spotlight on Hospice Sends ‘Powerful Message’ to Fraudulent Operators

The U.S. Department of Justice (DOJ) is prioritizing hospice as the agency cracks down on health care fraud. Increased reimbursement oversight could be on the horizon, lending to a potential rise in whistleblower cases.

DOJ counts hospice claims among the root causes of rising Medicare costs in recent years, according to Lisa Miller, deputy assistant attorney general overseeing the department’s Crime Fraud Section.

This is among the reasons that hospice fraud is among the top priorities for the regulatory agency, Miller indicated during the American Bar Association’s 33rd Annual National Institute on Health Care Fraud.


“The Health Care Fraud Unit and its partners are prioritizing the investigation and prosecution of schemes that affect vulnerable populations, including, but by no means limited to, sober homes fraud, illegal prescribing of controlled substances and hospice fraud,” Miller said. “In recent years, data has shown an increase in costs to the Medicare program resulting from claims for hospice care.”

The state of hospice fraud

Fraudulent or inaccurate Medicare claims cost the federal government an estimated $60 billion annually, according to a 2018 CNBC report. Medicare hospice claims represent a solid chunk, according to regulators.

For instance, roughly one-third (31%) of general inpatient hospice stays in 2012 were billed inappropriately, a $268 million cost to Medicare, the U.S. Department of Health and Human Services Office of the Inspector General (OIG) reported.


The OIG pulled data from a sample of inpatient claims that year to determine that total. Roughly 20% of these inappropriately billed claims were patients who did not require inpatient care at all during their stay, while 1% held “no evidence that [a] beneficiary elected hospice or had terminal illness,” the OIG indicated in the report.

Regulators often consider factors such as patient eligibility questions, live discharges and longer lengths of stay to be red flags.

Fraud occurs across the care continuum, and it can have significant financial and societal impacts, according to Miller.

“Every day, fraudsters intent on lining their own pockets at the expense of the American taxpayer, patients, and private insurers abuse our nation’s health care systems. This drives up costs of health care for us all,” Miller stated. “It imperils the long-term solvency of Medicare and Medicaid, upon which millions of Americans depend. And any time greed replaces medical necessity as a factor in providing health care services, our communities suffer. We stop ongoing schemes in their tracks to minimize patient harm and financial losses, and to send a powerful deterrent message.”

Federal and state regulators and law enforcement agencies have been cracking down on suspected hospice fraud schemes across the country in recent years. In addition to hefty fines or settlements, some hospice leaders have faced criminal charges and prison sentences for their roles in fraudulent billing practices.

A case in point involves home health and hospice provider Merida Group. Last year federal prosecutors filed charges in the U.S. District Court for the Southern District of Texas against Merida Group Owner Rodney Mesquais and CEO Henry McInnis. The criminal complaints allege that the two conspired to violate the False Claims Act by billing Medicare for medically unnecessary hospice care and home health services, totaling $152 million.

Mesquais and McInnis were convicted and received prison sentences of 20 and 15 years, respectively. They both face additional prison terms if found guilty of violating the False Claims Act (or FCA).

“In this case, the cost of the criminal conduct to Medicare was staggering, but the emotional cost on especially vulnerable people was egregious,” Miller said.

Another recent hospice fraud case involved the former owner of Louisiana-based Angel Care Hospice, Kristal Glover-Wing, who is facing a prison sentence of up to nearly two decades for conspiracy to commit health care fraud to the tune of $1.5 million. Glover-Wing in April was found guilty of one count of conspiracy and three counts of health care fraud.

According to the U.S. Justice Department, Angel Care enrolled 24 patients in hospice between 2009 through 2017 who did not meet Medicare eligibility requirements. Glover-Wing faces a sentence of up to 20 years in prison on the conspiracy to commit health care fraud charge, up to 10 years in prison on the health care fraud charges and three years of supervised release.

Where hospice oversight is moving

Federal legislators have also raised the issue of hospice fraud and program integrity. Rep. Beth Van Duyne (R-Texas) and Rep. Early Blumenauer (D-Ore.) have requested briefings from the U.S. Centers for Medicare & Medicaid Services (CMS) on the matter, particularly instances arising in California, Texas, Nevada and Arizona.

“I haven’t ruled anything out at this point. We are trying to get as much data as we possibly can, trying to hear as many opinions as we possibly can,” Van Duyne recently told Hospice News. “But I want to make sure primarily that the caregivers’ hands are not tied. We’ve been working with a number of stakeholders and committee members to ensure that everything at this point remains on the table to be thoughtfully discussed.”

Hospices can anticipate increased regulatory reimbursement oversight in coming years.

The OIG is launching a nationwide audit of hospice eligibility audit for the calendar year 2023. The agency will contact individual hospices to request Medicare claims and associated documentation. The impetus for the 2023 audit comes from the results of previous, less extensive inquiries.

More whistleblower and FCA suits may be on the horizon as regulators keep a watchful eye out for fraudulent hospice activity, according to Jonathan Porter, partner at the law firm Husch Blackwell. Porter was previously Assistant U.S. Attorney.

Whistleblower, or qui tam, cases occur when a whistleblower, deemed a “relator” by courts, files a FCA suit in concert with the government. The relator can potentially receive a portion of any funds recovered by the government via the lawsuit, typically ranging from 15% to 25%.

“What happens to the hospice providers who are being aggressive but not truly awful? The more interesting question is [whether] the criminal division is going to be pushing for prosecutions of these folks where you don’t have egregious facts,” Porter said during a recent Husch Blackwell podcast. “Are we going to end up in a situation where those are going to be handled with more and more False Claims Act cases? I think that there’s just going to be more whistleblower attention in this space. I think that’s probably the biggest thing to come out of this.”

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