Frighteningly Large Settlement for Hospice Provider Whose Patients Lived
The day before Halloween, the DOJ announced that Chemed Corporation and its various subsidiaries have agreed to a $75 million settlement for submitting allegedly false hospice services claims to Medicare for reimbursement. Touting this as “the largest amount ever recovered under the False Claims Act from a provider of hospice services,” the government sets the tone early in the new fiscal year for a high-recovery agenda.
The alleged fraud: billing for patients who
survived. Medicare covers palliative hospice care, that is, care providing
relief from pain during the final six months (or fewer) of a terminal illness. The
government alleged that the defendants knowingly submitted, or caused to be
submitted, hospice claims for patients who were not terminally ill to begin
with. The complaint also contained similar allegations that the defendants submitted
for continuous home care services which are meant only for patients who need
immediate short term crisis care, and which carry the highest reimbursable
daily rate. The government claimed that between 2002 and 2013 the defendants incentivized
employees to increase the number of patients receiving hospice and continuous
home care services, without regard as to whether the patients were actually
terminally ill, could have benefitted from further curative care, or required
crisis care services.
The defendants had previously argued in an
ill-fated motion to dismiss that the Medicare regulatory scheme relies on the
physician’s judgment as to what type of treatment a patient should receive. It
argued that the government was overstepping its bounds by attempting to use the
FCA to regulate these prognosis or “level of care” type decisions —
especially when an administrative process to review claims and consider medical
decisions already exists.
Along with the monetary settlement, the
defendants entered into a five-year Corporate Integrity Agreement with the U.S.
Department of Health and Human Services. The settlement also resolves three
related qui tam lawsuits in which the
government had intervened.
Whether or not it was particularly ghoulish for
the DOJ to sink its teeth into a hospice provider just before Halloween, for
having the temerity to have patients who apparently survived too long, it is
clear that the government will continue to haunt the healthcare industry for
more FCA treats as we launch into FY 2018.