Whistleblowers — and Taxpayers — Win Lawsuit over Medicare Fraud

Here’s another story with a satisfying ending and the take-home lesson that it’s a bad idea to cheat taxpayers and abuse medical resources.

A chain of hospices agreed to settle a lawsuit over its overbilling of Medicare, and driving up payments by providing care to patients for whom it wasn’t appropriate. St. Joseph Hospice, which operates in four states will pay $5.9 million, reported Associated Press (AP).

Hospice care is for people with terminal illnesses, and generally provides palliative services, which address symptoms, not curative care. Hospice patients usually receive the care in their homes, enabling them to die where they are most comfortable, instead of in a hospital or other care facility. Doctors prescribe hospice care only for people who are not expected to live longer than six months.

St. Joseph operates 13 hospices in Louisiana, Mississippi, Texas and Alabama. Three of its employees, Deedy Diamond, Nichoel Chaisson and Sandra Fairley, worked for St. Joseph in 2011 or 2012 and didn’t like what they saw. They sued the company for fraud in December 2012 Because they were responsible for raising the government’s awareness of the crime, they will split more than $1 million under the False Claims Act.

The whistleblowers also claimed that St. Joseph routinely enrolled people who weren’t eligible for hospice care under Medicare because it deemed them to have fewer than six months to live. The government did not prosecute that allegation.

Continuous care delivered by hospice services is appropriate for patients in crisis; that is, when their symptoms include chronic nausea, vomiting, diarrhea, shortness of breath or uncontrolled bleeding. According to the AP story, federal prosecutors said that Medicare pays for it at nearly six times the daily rate for regular hospice care. That often means a nurse and/or certified nursing aide visits terminal patient once to several times a week, depending on need and circumstances.

The whistleblowers claimed St. Joseph marketed its “around the clock hospice care,” encouraged hospitals to discharge patients sooner than they otherwise might and encouraged families to choose it to serve the patients at home.

Prosecutors charged that St. Joseph used and billed for continuous care much more often than other companies. “The government found that there were a significant number of patients who received continuous care hospice services when there was no crisis,” they said in a news release, “and thus, they were not eligible for such services. The result of this misuse of the continuous home hospice benefit was millions of dollars of false claims submitted to and paid by the government.”

St. Joseph’s owner, Pat Mitchell, denied wrongdoing, and told AP in an email that billing rules are unclear and that the company tried to provide the best care for patients. He said the settlement was wasn’t an admission of guilt to defraud, only a way to get the whole matter over with. He said Medicare should help people die peacefully at home and that continuous care reduces costs by discharging people earlier from more expensive hospital care.

That’s true enough, but just because someone is discharged early doesn’t mean it was appropriate to do so, or that the continuous care he or she received was proper just because the company successfully promoted it for the situation.

To learn more about end-of-life care, read Patrick’s newsletter, “Dying in America.” 

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