Feds sue hospice chain for false Medicare claims

The Justice Department filed a lawsuit Thursday against the largest for-profit hospice chain in the United States, charging that the company knowingly submitted false claims to Medicare for services that were not necessary, not actually provided or not performed in accordance with Medicare requirements.

The lawsuit targeted Chemed Corp. and various wholly-owned hospice subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, and alleged false Medicare billings for hospice services for patients in 18 states.

Chemed, which is based in Cincinnati, and also owns Roto-Rooter Group Inc., a national drain cleaning and plumbing service company, acquired Vitas in 2004.

The government’s complaint alleges that Chemed and Vitas Hospice set goals for the number of crisis care days that were to be billed to Medicare and used aggressive marketing tactics and pressured staff to increase the numbers of crisis care claims submitted to Medicare, without regard to whether the services were appropriate or were actually being provided.

The complaint contends that Vitas billed three straight days of crisis care for one patient, even though the patient’s medical records do not indicate the patient required crisis care and show that the patient was playing bingo part of the time.

In addition, the complaint alleges that Chemed and Vitas knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill. The companies allegedly paid bonuses to staff based on the number of patients enrolled in the program and based on patients who were admitted for longer lengths of stay, and took adverse employment actions against marketing representatives who did not meet monthly hospice admissions goals.

According to the complaint, these business practices resulted in the admission of patients who were not eligible for hospice care. The complaint alleges that Vitas admitted a patient to hospice who showed no signs of a terminal condition and was described in Vitas’ own records as, “very healthy given her age.”

“The Medicare hospice benefit is intended to provide patients nearing the end of life with pain management and other palliative care to make them as comfortable as possible,” said Acting Assistant Attorney General Stuart F. Delery, who heads the Justice Department’s Civil Division.

“Too often, however, we hear reports of companies that abuse this critical service by using aggressive marketing tactics to push patients into services they don’t need in order to get higher reimbursements from the government,” he said.

The Medicare hospice benefit is available for patients who elect palliative treatment for a terminal illness, and have a life expectancy of six months or less if their disease runs its normal course. When a Medicare patient receives hospice services, he or she no longer receives services designed to cure his or her illness.

The lawsuit is part of the government’s emphasis on combating health care fraud through its Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric H. Holder Jr. and Kathleen Sebelius, secretary of the Department of Health and Human Services, in May 2009.