Consumer Fraud

$1 Billion Whistleblower Case Against Hospice Provider Unsealed

Pills Stethascope on Money 435x289 $1 Billion Whistleblower Case Against Hospice Provider UnsealedA whistleblower lawsuit against one of the nation’s largest hospice care providers was unsealed last week after the federal government declined to intervene.

The lawsuit, filed in 2010 against HCR ManorCare by a former regional director of operations under whistleblower provisions of the False Claims Act, alleges the company engaged in a “corporate-wide pattern of conduct that has resulted in the submission of thousands of false claims” and payments of “millions of dollars” to Medicare for patients who were not terminally ill.

When a terminally ill Medicare patient enters hospice care, Medicare stops covering traditional medical care designed to improve or heal the patient, shifting resources instead to comfort the patient. Only Medicare patients who have a life expectancy of six months or less are considered terminally ill and eligible for the Medicare hospice benefit.

Whistleblower Kathi Holloway alleges that employees of Heartland Hospice, a unit of HCR ManorCare that operates nursing facilities in 23 states, would “falsify patients’ life expectancy in order to ‘qualify’ those patients for hospice reimbursement from Medicare, maintain patients to hospice after their medical condition has stabilized rather than discharging them from hospice as required by Medicare regulations, and exaggerate patients’ ‘signs and symptoms’ to collect Medicare reimbursements,” court records show, according to McKnight’s Long-Term Care News.

Heartland, the third-largest hospice care provider in the U.S., said earlier this month that it and all its subsidiaries were being acquired by Quality Care Properties as part of a bankruptcy plan, according to McKnight’s.

The $1 billion whistleblower case is still allowed to proceed without the federal government’s active involvement. According to Skilled Nursing News, the U.S. Department of Justice (DOJ) has asked to be kept updated on pleadings in the case.

In November, the DOJ dropped another whistleblower case against HCR ManorCare that it had initially joined in 2015. That lawsuit alleged the Toledo, Ohio-based company routinely performed “medically unnecessary” therapy services on Medicare and Tricare beneficiaries.

According to McKnight’s, the DOJ’s refusal to intervene raises questions about how interested it is in pursuing False Claims Act cases:

In this case, Holloway claims that Heartland discharged hundreds of patients who did not qualify for Medicare hospice benefits when its competitor, SouthernCare, agreed to a $24.7 million settlement of similar false claims allegations. But even then, the suit alleges, Heartland did not disclose why it had discharged those patients, nor did it refund ‘millions’ it had already billed for their hospice care.