DOJ joins lawsuit against national for-profit hospice
The United States Justice Department has joined a whistleblower case alleging that a national chain of for-profit hospices violated the False Claims Act by spending millions of taxpayer dollars to care for Medicare recipients in hospice who were not terminally ill.
For-profit hospice companies may receive Medicare dollars for Medicare patients who have a medical prognosis of six months or less to live. The suit against AseraCare Hospice, a chain of about 65 providers in 19 states, "knowingly submitted false claims" to Medicare, misspending millions of Medicare dollars for patients who didn't meet the medical prognosis.
"Congress intended that the hospice care benefit be used during the last several months of an individual's life," said Daniel R. Levinson, inspector general of the Department of Health and Human Services in a statement released by the Justice Department on Tuesday. "We will continue to recover misspent Medicare funds from companies that abuse the hospice benefit."
AseraCare's owner, Golden Living, refutes the charges.
"We are disappointed by the Department of Justice's decision to intervene in the qui tam litigation," said AseraCare's General Counsel David Beck in a statement released by the company yesterday. "This action is especially troubling because we believe it could constrain certain patients – most notably those who suffer from unpredictable disease – from utilizing the hospice benefit. The allegations contained in the complaint are without merit, and AseraCare operates in full compliance with the law."
"Consistent with hospice providers nationwide, AseraCare Hospice has evolved in recent years to treat more terminally ill patients with unpredictable disease progressions," said AseraCare Hospice President and Chief Medical Officer David Friend, MD, in the statement. "It is simply not possible to precisely predict how patients will respond to challenging illnesses such as end-stage heart, lung and kidney disease, AIDS and Alzheimer's."
For-profit hospice companies have come under increased scrutiny in recent months, with some in the hospice industry and government claiming that the rapid growth of for-profits may be due to these companies "cherry picking" patients, such as those with dementia, that end up staying longer in hospice care.
[See also: Concerns raised about increase in for-profit hospice care.]
Last summer, the Office of Inspector General released a report that examined the use of hospice for nursing facility residents. The report concluded that there was enough evidence to suggest concern about how the Medicare hospice benefit is being used. The OIG recommended that hospices should be more carefully scrutinized going forward and that the Medicare payment for hospice may need to be reduced to eliminate any improper incentives.
[See also: Hospices should be scrutinized, says OIG.]
AseraCare hasn't ruled out that the DOJ's interest may stem from the call for more scrutiny of hospices. "There does appear to have been an increase in government review of the hospice benefit, as that benefit is being more frequently utilized," said Blair Jackson, Golden Living's vice president of corporate communications in an email to Healthcare Finance News. "It may be that this action is connected with that increased scrutiny."
If the federal government succeeds in proving that AseraCare knowingly submitted false claims, it can claim three times the damages and a penalty of $5,500 to $11,000 per claim. The whistleblowers would be entitled to a portion of the money recovered by the government.
Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.
