The day before Halloween, the DOJ announced that Chemed Corporation and its various subsidiaries have agreed to a $75 million settlement for submitting allegedly false hospice services claims to Medicare for reimbursement. Touting this as “the largest amount ever recovered under the False Claims Act from a provider of hospice services,” the government sets the tone early in the new fiscal year for a high-recovery agenda.
The alleged fraud: billing for patients who survived. Medicare covers palliative hospice care, that is, care providing relief from pain during the final six months (or fewer) of a terminal illness. The government alleged that the defendants knowingly submitted, or caused to be submitted, hospice claims for patients who were not terminally ill to begin with. The complaint also contained similar allegations that the defendants submitted false claims for continuous home care services which are meant only for patients who need immediate short term crisis care, and which carry the highest reimbursable daily rate. The government claimed that between 2002 and 2013 the defendants incentivized employees to increase the number of patients receiving hospice and continuous home care services, without regard as to whether the patients were actually terminally ill, could have benefitted from further curative care, or required crisis care services.
The defendants had previously argued in an ill-fated motion to dismiss that the Medicare regulatory scheme relies on the physician’s judgment as to what type of treatment a patient should receive. It argued that the government was overstepping its bounds by attempting to use the FCA to regulate these prognosis or “level of care” type decisions — especially when an administrative process to review claims and consider medical decisions already exists.
Along with the monetary settlement, the defendants entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services. The settlement also resolves three related qui tam lawsuits in which the government had intervened.
Whether or not it was particularly ghoulish for the DOJ to sink its teeth into a hospice provider just before Halloween, for having the temerity to have patients who apparently survived too long, it is clear that the government will continue to haunt the healthcare industry for more FCA treats as we launch into FY 2018.