by Ben Vernia | May 3rd, 2013
On May 2, the Department of Justice announced that it had filed a civil complaint alleging that Chemed Corp. violated the False Claims Act by submitting claims for unnecessary services, including crisis care for patients who were not in crisis, and hospice care for patients who were not terminally ill. According to DOJ’s press release:
The United States has filed suit against Chemed Corporation and various wholly owned hospice subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, alleging false Medicare billings for hospice services, the Justice Department announced today. Vitas is the largest for-profit hospice chain in the United States and provides hospice services to patients in 18 states (Alabama, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Michigan, Missouri, New Jersey, Ohio, Pennsylvania, Texas, Virginia and Wisconsin) and the District of Columbia. Chemed, which is based in Cincinnati, Ohio and also owns Roto-Rooter Group Inc., a national drain cleaning and plumbing service company, acquired Vitas in 2004.
The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with 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. When a Medicare patient receives hospice services, that individual no longer receives services designed to cure his or her illness. Medicare reimburses for different levels of hospice care, including continuous home care, also called crisis care, which is available for patients who are experiencing acute medical symptoms resulting in a brief period of crisis. Crisis care is available when a patient’s acute medical symptoms require the immediate and short-term provision of skilled nursing services in order to keep the patient at home. The reimbursement rate for crisis care services is the highest daily rate a hospice can bill Medicare, and hospices are paid hundreds of dollars more on a daily basis for each patient they certify as having received crisis care services rather than routine hospice services.
The government’s complaint alleges that Chemed and Vitas Hospice knowingly submitted or caused the submission of false claims to Medicare for crisis care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements. According to the complaint, the companies set goals for the number of crisis care days that were to be billed to Medicare. The companies also allegedly 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. For example, the complaint contends that Vitas billed three straight days of crisis care for a patient, even though the patient’s medical records do not indicate that the patient required crisis care and, indeed, reflect that the patient was playing bingo part of the time.
In addition, the government’s 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. As an example, 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.”
As a result of the conduct alleged in the complaint, the government contends that Chemed and Vitas violated the False Claims Act and misspent tens of millions of taxpayer dollars from the Medicare program.
The case appears to have arisen from the government’s own investigation, and not as a whistleblower, or qui tam, suit.