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DOJ settles False Claims Act case with Chemed, Vitas for $75 million

November 3rd, 2017 | No Comments

After four and a half years of litigation (beginning with a  Department of Justice lawsuit in May 2013), the Government announced on October 30 that it had entered a settlement with Vitas Hospice Services and the company that had acquired it, Chemed Corp., to resolve the case and three whistleblower cases for a total of $75 million. According to DOJ’s press release:

Chemed Corporation and various wholly-owned subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, have agreed to pay $75 million to resolve a government lawsuit alleging that defendants violated the False Claims Act (FCA) by submitting false claims for hospice services to Medicare.  Chemed, which is based in Cincinnati, Ohio, acquired Vitas in 2004. Vitas is the largest for-profit hospice chain in the United States.

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The settlement resolves allegations that between 2002 and 2013 Vitas knowingly submitted or caused to be submitted false claims to Medicare for services to hospice patients who were not terminally ill.  Medicare’s hospice benefit is available for patients who elect palliative treatment (medical care focused on the patient’s relief from pain and stress) for a terminal illness and have a life expectancy of six months or less if their disease runs its normal course.  Patients who elect the hospice benefit forgo the right to curative care (medical care focused on treating the patient’s illness).  The government’s complaint alleged that Vitas billed for patients who were not terminally ill and thus did not qualify for the hospice benefit.  The government alleged that the defendants rewarded employees with bonuses for the number of patients receiving hospice services, without regard to whether they were actually terminally ill and whether they would have benefited from continuing curative care.

The settlement also resolves allegations that between 2002 and 2013, Vitas knowingly submitted or caused to be submitted false claims to Medicare for continuous home care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements.  Under the Medicare hospice benefit, providers may be reimbursed for four different levels of care, including continuous home care services.  Continuous home care services are only for patients who are experiencing acute medical symptoms causing a brief period of crisis.  The reimbursement rate for continuous home care services is the highest daily rate that Medicare pays, and hospices are paid hundreds of dollars more on a daily basis for each patient they certify as having received continuous home care services rather than routine hospice services.  According to the complaint, the defendants set goals for the number of continuous home care days billed to Medicare and used aggressive marketing tactics and pressured staff to increase the volume of continuous home care claims, without regard to whether the patients actually required this level of crisis care.

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Vitas also agreed to a five-year Corporate Integrity Agreement, DOJ announced. The Government did not disclose the relators’ shares of the recovery, because they had not yet been determined.

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