Understanding Hospice Fraud: The Lawsuit Legal Guide for Whistleblowers

Improper enrollment of non-terminal patients

One of the most common types of fraud involving hospice care is the enrollment of patients who are not terminal.

When these patients are enrolled in hospice care (either home care or inpatient care) Medicare reimburses the costs of their treatment daily.

Patients who are clearly not terminal will eventually be discharged, but not before racking up care costs.

A recently settled False Claims Act case recovered more than 2 million from Health and Palliative Services of the Treasure Coast for improper enrollments along with some other types of hospice fraud. ^[6]  

The enrollment of patients into hospice care is now being monitored more closely by the Office of the Inspector General (OIG) and other authorities.

Improper enrollment of patients without their knowledge or consent

Another type of enrollment fraud is far more dangerous to patients.

Instead of involving those who do not need care, it involves diverting patients who do need curative care to hospice without their knowledge or consent.

By providing fraudulent information to the hospital, the patient or the patient’s caregivers, hospice organizations may claim patients from hospitals and begin collecting reimbursement for their care.

Only certain types of care are reimbursed by Medicare, most often, pain management and other services meant to provide comfort.

Curative care designed to cure or resolve dangerous conditions is not covered by hospice benefits, so this care often ends immediately when the patient is diverted. A form of pharmaceutical fraud, prescriptions are often changed immediately after diversion.

When patients with a chance of recovery are diverted to hospice care, it can quickly lead to their deaths.

Most patients who expect to recover would never volunteer to enter hospice care, but in the past, have been placed in hospice care without their knowledge as a result of fraudulent statements of dementia.

This type of misconduct can lead to wrongful death claims and possible criminal charges in addition to claims of fraud against the government.

If you believe neglect, misconduct, or abuse caused the death of a loved one speak the nursing home wrongful death attorneys at Lawsuit Legal to review the the specific details you may be able to take legal action to hold them accountable.

Improper billing of public health services for levels of care not provided

Hospice benefits like those provided by Medicare do not reimburse for each service. Instead, a daily amount is reimbursed based on the level of care that is provided for the patient.

When hospice facilities report that a higher level of care was provided than was delivered, it may be considered billing fraud.

The Medicare Hospice Benefit recognizes four different levels of care. They are:

• Routine Home Care
• General Inpatient Care
• Continuous Home Care
• Inpatient Respite Care

A patient who is entitled to Medicare Part A may fall under any of those categories.

To make matters more difficult for accurate billing, patients may rapidly switch between different levels of care depending on their needs.

For example, many patients prefer to remain at home and independent. However, emergencies or excessive pain may force them into inpatient care for a few days at a time. At different times, they may be capable of handling their care with only routine home care but require continuous home care at later stages.

Each level of care is reimbursed at a different rate, with inpatient care being reimbursed at the highest level.

In several high-profile cases, hospice facilities have reported patients as receiving inpatient care even when they are not inpatients.

Reporting as many patients as possible as inpatients will maximize disbursements from Medicare, but it is considered a serious form of fraud.

Those who falsify their reports on the level of care being provided to patients may be forced to return those payments along with additional civil penalties.

This fraud can be considered far more serious when, instead of misreporting the level of care provided, hospice companies fail to provide any care at all while reporting that they did. Several conspirators in Michigan who were found to be committing this fraud were sentenced to nearly 15 million in fines and a combined prison sentence of 16 years. ^[2]

Simultaneous billing of Medicare and patients/families for the same services

Medicare’s Hospice Benefit is complex, and it is not always clear to non-experts what services are covered and when.

Patients and their caregivers in particular often lack the knowledge to understand what their benefit covers and under what conditions each part of the benefit goes into effect.

In the past, hospice facilities have taken advantage of this confusion to create two invoices for the same treatment.

They collect payment from Medicare and then charge the family or the patient’s insurance for services that were intended to be covered in the lump sum provided for the patient’s level of treatment.

This is often called double-billing when it applies to medical treatments.

Double-billing can be difficult for Medicare’s regulators and fraud enforcers to detect because it does not receive records of invoices that were provided to families.

Insurance companies are often more effective at detecting this fraud because they hire experts who understand what should and shouldn’t be covered by the benefit.

For this reason, patients who are paying for services out-of-pocket are more likely to be victimized by this type of fraud.

However, even when the patients are the ones being victimized, billing Medicare at all will cause the fraud to fall under the False Claims Act. Administrators, staff and other patients who notice and record this fraud can claim a percentage of any funds recovered.

Improper administration of billable care by unqualified caretakers

Medicare reimburses hospices in a lump sum to provide services, some of which may only be administered by a doctor, a Registered Nurse or another qualified medical professional.

The rates that are paid by Medicare are researched and carefully measured to allow for the adequate compensation of these professionals.

However, in the past, hospices have improperly cut costs by having these services provided by qualified caretakers who are paid at much lower rates.

This constitutes several different kinds of fraud.

Those who have hired unqualified staff and instructed them to provide these services are at risk of being prosecuted under the False Claims Act.

Committing this fraud often requires the submission of multiple false statements to Medicare or other services attesting to the ability of the facility to provide certain types of care.

Though this is categorized as administration-level fraud, those who take part in these practices at the lowest level are also taking serious professional risks.

Those who have provided the care they are not qualified to give may be stripped of their certifications and even exposed to criminal penalties if their unqualified care results in injury or anguish to patients.

Improper provisioning of in-home care to encourage placement in a facility

Many end-of-life patients prefer the independence and familiar surroundings that come with Routine Home Care and Continuous Home Care.

As fewer services are needed for these hospice levels of care, those providing the care are paid a far lower daily sum by Medicare or Medicaid than they would if the patient were to be admitted to a hospice facility.

In the past, this has resulted in a type of fraud where patients are improperly coerced into accepting inpatient care. This may be done in several ways, but one that has been targeted in recent cases is the insufficient provisioning of home care.

This occurs when hospice companies deliberately withhold services or improperly communicate that services are not available outside of inpatient facilities in order to convince patients to enter inpatient care.

In some cases, this may mean refusing to provide treatments that are clearly offered under Medicare’s home care benefits.

Though the services are not provided to the patients, the organization providing the hospice care must often make false reports that the services are being provided or offered in order to qualify to provide hospice care at all.

That makes this fraud prosecutable under the False Claims Act in addition to a violation of the patient’s rights.

Improper referral relationships with nursing homes

Many end-of-life patients are transferred to hospice directly from nursing homes. Nursing homes are the primary source for new hospice patients, even before hospitals.

This has caused many hospice companies to form improper arrangements with nursing homes where they provide gifts and privileges in exchange for referrals.

Many of these arrangements constitute fraudulent and abusive practices that directly violate the Medicare/Medicaid anti-kickback statute.

The OIG has recently made a priority of investigating and enforcing the law in these relationships.

In a fraud alert message for the public, the OIG listed a series of practices by hospices that may be pursued as fraud (PDF). ^[5]

• Offering free good, or good at below market value to the nursing home
• Paying room and board to the nursing home at above the rates they would receive from Medicare if the patient had not been diverted to hospice
• Paying compensation to nursing homes for services that are already compensated by Medicare
• Paying above market value for additional non-core services not covered by Medicare
• Providing staff to the nursing home to perform essential services at the hospice service’s expense

Hospice companies that violate these rules can be charged with breaking the anti-kickback statute. These charges can exclude the company from ever taking part in federal healthcare programs in the future.