The Risk of Criminal Charges in Hospice Fraud Cases

Hospice personnel could face criminal charges in instances of suspected fraud, waste and abuse.

The regulatory stakes are high for hospice providers when it comes to False Claims Act (FCA) violations, according to Jonathan Porter, partner at the law firm Husch Blackwell. Though the vast majority of FCA cases do not result in criminal charges, the steps toward resolving these cases prior to the point of a federal jury trial can be treacherous for hospice providers, he stated in a recent Husch Blackwell podcast.

“[Criminal] trials are rare, but the [U.S.] Justice Department has a really high percentage of cases that they indict,” Porter said. “The vast majority of criminal cases are going to plead out. Even more than that on the False Claims Act side, for a lot of reasons these are going to resolve prior to trial. If the government wants to go in and take documents, [that’s] a different issue and a lot more complex. It’s a longer conversation.”


The parameters around establishing standard proof of maleficence are set relatively low in most civil hospice fraud cases, according to Porter.

Though the burden of proof is higher when it comes to federal criminal fraud investigations, hospice providers can come up against a complex web of legal processes and face greater penalties, he stated.

“Most False Claims Act cases have a really low burden of what’s called a preponderance of evidence, which is essentially 50%,” Porter said. “The criminal burden is amazingly high, it’s beyond a reasonable doubt to show with a fraud count. You have to show intent to defraud, and you have to show willfulness.”


Some fraud cases have had hospice owners facing prison sentences and heavy financial repercussions. In some cases, hospices’ Medicare certification have been revoked, while others have been barred from practicing in the industry.

An example came last year when former owner of New Orleans-based Canon Healthcare Dr. Shiva Akula was convicted for False Claims Act violations totaling nearly $47 million.

A federal court convicted Akula of 23 counts of health care fraud, including eight counts of overbilling for the General Inpatient level of care. Other charges included fraudulent claims for physician services and home visits, as well as manipulation of Medicare billing codes.

Akula faces the possibility of a maximum sentence of 10 years in prison, along with $250,000 in fines.

Hospice program integrity concerns have heated up in recent years as regulatory watchdog groups hone in on fraud, waste and abuse in the industry.

Some of the main drivers of increased regulatory oversight include a proliferation of new hospices cropping up in Arizona, California, Nevada and Texas. The U.S. Centers for Medicare & Medicaid Services (CMS) has included the implementation of a “36-month”rule for hospice providers in its finalized 2024 home health rule. The requirement forbids any change in majority ownership during the 36 months after initial Medicare enrollment.

Instances of fraudulent billing practices have contributed to a ramp up of hospice audits by regulators and their contractors. Audit activity continues to gain momentum in hospice, including Targeted Probe and Educate (TPE) audits by Medicare Administrative Contractors (MACS) and others by Unified Program Integrity Contractors (UPIC), Supplemental Medical Review Contractors (SMRC) and Recovery Audit Contractors (RAC).

The increased regulatory attention has hospices navigating a complicated landscape when it comes to billing practices and auditing activities, said Meg Pekarske, partner at Husch Blackwell.

The hospice auditing climate is heating up, with providers increasingly honing in on documentation when it comes to proving that patients were eligible to receive care, and that services were delivered and medically necessary at the end of life, Pekarske said. 

Though increased hospice audits are not a typical indicator of fraud, a prevalence of billing errors can signal maleficence of some form for regulators, she stated.

“There’s a lot of push-pull right now with the government,” Pekarske said. “A lot of people are dealing with audits and taking them seriously, because they can be used in evidence in probable criminal or civil fraud. There’s a lot that goes into these. If you’re billing for something, most people have a basis. The physician ordered the level of care and thought it was medically necessary. [For] most people … it’s a reminder that it’s not like this is going to be the end result for people who get a bad audit, that they’re going to be criminally indicted.”

Companies featured in this article: