Consumer Fraud

Hospice groups settle whistleblower suits

whistleblower Hospice groups settle whistleblower suitsTwo subsidiaries of the Compassionate Care Hospice Group have agreed to settle separate False Claims Act lawsuits filed by whistleblowers who claim the companies defrauded Medicare and other federal health care programs.

The U.S. Attorney’s office for the Northern District of Georgia said that Compassionate Care Hospice of Atlanta will pay the U.S. $2.4 million to resolve allegations that it paid illegal kickbacks to five doctors in exchange for patient referrals and certifying patients as eligible for hospice services when they weren’t.

Compassionate Care Hospice of Atlanta provided payments to a medical director in return for referrals and also created sham contracts with associate medical directors in exchange for referrals, the claim states. This alleged activity, which federal prosecutors say lasted from April 3, 2007, to April 29, 2011, caused the submission of false claims to Medicare and Medicaid.

Whistleblowers Cathy Morris and Josie King, both former Compassionate Care Hospice of Atlanta employees, filed their complaint under the whistleblower provisions of the False Claims Act. They will share a whistleblower award of up to $600,000 for their role in helping the U.S. government recover the health care funds.

“Kickbacks should never play a role in medical decision-making,” said U.S. Attorney John Horn. “When health care providers are paid for referrals, the costs of health services inevitably rise and ultimately are borne by taxpayers.”

The federal government also reached an agreement with Compassionate Care of Gwynedd Inc. when the Bensalem, Pennsylvania-based branch agreed to pay the U.S. $2 million to settle a False Claims Act lawsuit brought by whistleblowers who alleged the provider was defrauding Medicare.

According to the U.S. Attorney’s Office for the District of New Jersey, Compassionate Care of Gwynedd admitted patients who did not need hospice care and billed Medicare for the medically unnecessary services. The complaint also alleges the company admitted these patients by using a diagnosis of “debility,” which was not medically justified.

The whistleblowers in that case will share an award of more than $350,000, the U.S. Department of Justice said.