Corporate Liability Blog

Whistleblowers Get $4.6 Million In Hospice Fraud Case

  • 03/15/12
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On March 1, 2012, the Department of Justice announced that Odyssey HealthCare, a subsidiary of Gentiva, agreed to pay $25 million to resolve civil liability under the federal False Claims Act arising from its billing of claims for certain hospice services.  As a part of the settlement, a group of whistleblowers, all former employees of Odyssey, will receive payments totaling more than $4.6 million under the False Claims Act as a reward for initially pursuing the case on behalf of the government.

The Odyssey settlement involved an “upcoding violation,” where the defendant submitted claims for a higher reimbursement than it was entitled to.  The Medicare hospice benefit is available for patients who elect palliative treatment for a terminal illness. Patients are eligible for palliative hospice care if they have a terminal diagnosis of six months or less if their disease runs its normal course. The majority of hospice services are billed at the routine care level. Medicare also pays for higher levels of care, including continuous home care. Continuous care is available when the patient is experiencing an acute crisis and his or her symptoms can only be controlled at home through the provision of skilled nursing services. The reimbursement rate for continuous care services is the highest rate available to a hospice and several hundred dollars a day more than the amount paid for routine services. Odyssey was forced to pay the settlement because it submitted false claims, over a period of several years, to the Medicare program for continuous home care services that were unnecessary or that were not performed in accordance with Medicare requirements.

Odyssey Healthcare provides hospice services in approximately 27 states, including Massachusetts. Odyssey was purchased by Gentiva Healthcare in 2010.  Even before its purchase of Odyssey, Gentiva had an extensive presence in Massachusetts.  For profit health chains like Gentiva, fueled by Wall Street money, are rapidly buying up hospice providers because they believe it will be a high profit area, as the population ages and baby boomers retire.

Medicare fraud in the area of hospice care has been a growing problem for many years.  Based on this settlement, recently filed cases and reports of the federal government, it is rampant at some health care providers.  Our firm is presently investigating hospice providers in Massachusetts for Medicare fraud.

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