Partners in Care Sues HHS Over Claims Denials

The Oregon-based provider Partners in Care has filed a lawsuit against the U.S. Department of Health and Human Services (HHS) due to audit-related claims denials.

Partners in Care took this unusual step after pursuing every other available means of redress, including the U.S. Centers for Medicare & Medicaid Services’ (CMS) review and appeals process, according to CEO Greg Hagfors. The case has significance for hospice providers nationwide as CMS and its contractors continue to ramp up audits. This is in addition to audits by the HHS Office of the Inspector General (OIG).

“We were given a mostly favorable decision by the administrative law judge, and CMS appealed that decision to the CMS panel,” Hagfors told Hospice News. “We’ve exhausted all of the administrative avenues, and this is the logical next step.”


Partners in Care offers hospice, palliative care and home health to about 1,000 patients daily in five counties in its home state. The provider recently celebrated the 45th anniversary of its founding, which preceded the establishment of the Medicare Hospice Benefit. Since then, the company has grown in terms of census, grown more sophisticated in its approach to end-of-life care and expanded into other business lines.

The lawsuit contends that the claims denials denied Partners in Care its right to procedural due process.

OIG, on behalf of CMS, informed the hospice that it would be audited in a May 2018 letter. The audit examined medical and billing records for 100 patients from Jan. 1, 2016 and Dec. 31, 2017. Partners in Care supplied OIG with the requested documents, amounting to thousands of pages, according to court documents.


At the conclusion of the audit, OIG indicated that in 47 of 100 instances the clinical record did not support that the patients were terminally ill or that they needed the level of care that they received. This represented $11.2 million in denied claims.

Partners in Care refuted the findings in a Jan. 2021 letter, providing rebuttal statements supporting clinical eligibility for 45 of those patients. The rebuttal included a report from a “statistical expert.” R. Mitchell Cox, that according to court documents identified “numerous flaws” in the OIG’s sampling and extrapolation methodology. It also included statements from hospice physicians and other experts in the field who indicated that the documentation did support eligibility, among other resources.

For Hagfors, the nonprofit provider lawsuit presents an opportunity not only to recoup funds but to defend its employees against OIG’s allegations.

“I don’t think that Partners in Care — or any hospice for that matter — should be financially penalized for doing the right thing. Our team works extraordinarily hard, and they do the right thing,” Hagfors said. “I know that they do the right thing, and I feel like I have to defend their hard work in the trenches by appealing this.”