Medicare Compliance & Reimbursement
Hospice Chains Shell Out $13 Million Each In Settlements
The backlash against the booming hospice industry seems evident in two recent settlements.
Miami-based VITAS plans to settle a class action Fair Labor Standards Act Wage and Hour lawsuit pending in California for $13.1 million, while Dallas-based Odyssey HealthCare Inc. plans to pay $13.0 million to settle a previously announced Department of Justice investigation.
VITAS has tentatively agreed to the lawsuit settlement in light of "a significant increase in litigation, high settlements and unfavorable verdicts against companies involving wage-hour claims in California," Cincinnati-based parent Chemed Corp. says in a release.
Two whistleblower lawsuits against Odyssey sparked the DOJ's investigation into "the clinical eligibility of long-length of stay patients during a five year period from 2001 through 2005," Odyssey CEO Robert Lefton says in a release. "We are settling this matter to resolve the substantial uncertainties, delays, distractions and costs associated with litigating complex regulatory matters, thereby permitting our management team to focus its complete attention on patient care, operations and business development."
Odyssey won't admit any wrongdoing in the settlement, which will complete the DOJ's investigation. The company will enter into a corporate integrity agreement with the HHS Office of Inspector General.
VITAS reported $2.5 million in net income on $169 million in revenues for the quarter ended Dec. 31, compared to a $10.7 million profit on $142.3 million in revenues for the same quarter in 2004.
Odyssey reported a $1.8 million loss on $101.8 million in revenues for the quarter, compared to an $8.8 million profit on $91.3 million in revenues for the year-ago quarter. Hurricanes Katrina and Rita and Medicare cap exposure also contributed to the loss, Odyssey said.
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