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.

Compare this with the case Angela Thompson of New York, a 17 year old who sold 2 ounces of cocaine to an undercover police officer in the presence of her uncle.  Her sentence, of not less than 15 years to not more than 25 years, was upheld on appeal.  Although this case fell under state law, defendants arrested with even smaller amounts of crack cocaine routinely receive sentences of 5, 10 or even 20 years in prison in our federal courts.

Many workers and retirees have recently seen their retirement accounts decline by 40 to 50%, largely as a result of corporate crime and other misconduct.  Although we cannot allow street crime to proliferate, for most Americans, massive corporate crime is a greater threat than petty street crime.  For most people, its not the crime in the streets, its the crime in the corporate suites.

In a recent New York case, a patient and a doctor in a whistleblower suit will receive a total of $9.9 million out of a settlement paid to the federal and state governments. New York’s Staten Island University Hospital will pay $88.9 million to settle allegations that it defrauded Medicare, Medicaid and a military insurance program. According to the suit, the hospital intentionally used false billing codes to obtain reimbursement from Medicare. The whistleblowers (legally referred to as “relators”) will receive about 10% of the total amount recovered for the government, even though they themselves suffered no losses.

The Massachusetts and Federal False Claims Act impose liability on companies that present false or fraudulent claims to the government.

In the health care field, the following activities are examples of conduct prohibited by the false claims laws:

• Billing for services not actually provided;
• Billing for undocumented services;
• Making false entries in medical and other records used to support reimbursement;
• Billing for medically unnecessary services;
• Characterizing non-covered services or costs in a way that leads to reimbursement from a government program;
• Assigning incorrect codes in order to obtain a higher reimbursement;
• Making inaccurate, false or inappropriate entries on cost reports;
• Failing to seek payment from beneficiaries who may have other primary payment sources;
• Participating in kickbacks, bribes, or rebates in exchange for referring goods, facilities, services, or items that are reimbursed by government programs.

A violation of the Federal False Claims Act may result in penalties of up to $11,000 per false claim plus three times the amount of damages the government sustains, and exclusion from the Medicare and Medicaid programs. Individuals, including employees, can bring a civil action on behalf of the Federal government for violations of the Federal False Claims Act. In return, the individual may share a percentage of any monetary recovery or settlement. Generally, individuals who bring the actions receive between 10% and 30% of the amount recovered.

The Massachusetts and Federal False Claims Acts prohibit employers from retaliating against any employee by discharging, demoting, harassing, or otherwise discriminating against him because he has reported violations of the False Claims Acts. This prohibition is what is generally referred to as “whistleblower” protection. If an employee experiences prohibited retaliation, he or she is entitled to all relief necessary to make the employee whole such as reinstatement, two times back pay, interest, emotional distress damages, costs, and attorney’s fees.

Whistleblower statutes give employees an incentive to report fraud on the government and protections from retaliaton. Otherwise, employees with information about government fraud would not step forward because they would lose their jobs.

If you have information about a potential false claim, you should contact an attorney promptly and keep it a secret.  Only the first whistleblower(s) to file suit gets to share in the recovery, and whistleblowers don’t get a share of the recovery if the fraud becomes public knowledge before suit is filed.