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Home Health & Hospice Week

Hospice:

BIG HOSPICE SETTLEMENT PUTS INDUSTRY IN THE HOT SEAT

Published on Tue Jan 27, 2009

Hospice eligibility and six-month-prognosis focus of successful whistleblower lawsuit.

A hospice chain's $25 million settlement may make life harder for all hospices, thanks to increased scrutiny placed on the industry.

Birmingham, Ala.-based SouthernCare Inc., a hospice chain with 95 offices in 15 states, has announced a $24.7 million settlement with the U.S. Department of Justice and HHS Office of Inspector General to settle False Claims Act charges.

In lawsuits filed in 2005 and 2007, two former employees accused SouthernCare of admitting and billing for patients who weren't eligible for hospice. The employees, Tanya Rice and Nancy Romeo, will receive $4.9 million from the settlement, the DOJ says.

Enrollment quota: In their suits, RNs Rice and Romeo alleged that SouthernCare trolled churches, nursing homes, and doctor's offices for patients, regardless of their eligibility. Romeo said employees risked losing their jobs if they didn't meet a quota of enrolling 21 patients each per month, according to the Birmingham News.

Some patients were still receiving curative treatment and others didn't really need home care, the suits said. Some thought they were just receiving regular home care, the prosecutors alleged.

One of the whistleblowers said a patient who had successful heart bypass surgery and stayed on hospice for four years apologized for not dying, reports the News.

SouthernCare admitted no wrongdoing in the settlement. "The dispute was wholly unrelated to the quality of hospice care provided by Southern-Care, but rather, dealt with the criteria for determining when a patient is eligible to receive hospice services under Medicare rules," the company says in a release.

"We are pleased to put this matter to rest so we can focus on what we do best -- serving patients and families with compassion and dignity -- rather than remain tangled in protracted legal issues," says CEO Michael Pardy in the release.

But the government says the privately held hospice chain "showed a pattern and practice to falsely admit patients to hospice care who did not qualify and to bill Medicare for that care."

"Every provider that submits claims to the Medicare program must ensure that its services are billed appropriately," David Nahmias, U.S. Attorney for the Northern District of Georgia, says in the DOJ release. "Falsely admitting people to hospice care who did not qualify for the benefit exposed these patients to potential harm and contributes to the soaring costs of health care for everyone."

In addition to the payment, SouthernCare has entered a five-year corporate integrity agreement (CIA) with the OIG.

No More Free Pass

In the past, hospices enjoyed relatively light scrutiny compared to other industries -- but that won't last. "Hospices are increasingly in the crosshairs of regulators after many years of what often seemed like a 'pass' in terms of compliance," notes Washington, D.C.-based attorney Elizabeth Hogue.

And with Medicare spending on the rise, the feds are intent on curbing fraud and abuse. The SouthernCare settlement "shows just how seriously the regulators are in routing out fraud," points out attorney Ross Lanzafame with Harter Secrest & Emery in Rochester, N.Y.

Growth factor: Hospices should brace for increased scrutiny, predicts attorney Robert Markette, Jr. with Gilliland, Markette & Milligan in Indianapolis. The Centers for Medicare & Medicaid Services has already had its eye on the hospice industry due to its explosive growth in recent years.

Now this high-profile whistleblower case, which is the largest Alabama has ever seen according to the plaintiffs' attorneys, focuses attention even more squarely on hospice providers. "It makes everyone else look bad," Markette tells Eli."The folks obeying the rules will need to pay more attention."

Hospices can bank on the fact that CMS, the OIG, and other regulators will be turning up the heat, and soon. "They're coming," Markette warns.

More whistleblowers: Providers can also count on False Claims Act suits continuing in popularity. Compared to criminal suits, civil qui tam suits like the SouthernCare one require a lower burden of proof, so government prosecutors like them, Markette notes.

And more and more private attorneys are specializing in whistleblower suits because they require relatively little work for a "big payday" if the government takes up the case, Markette points out. "There are qui tam attorneys out there looking for clients," he cautions.

The more publicity big-dollar whistleblower settlements get, the more disgruntled workers come out of the woodwork to file their own suits, he adds.

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