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Whistleblowers Are Key to Fighting Hospice Fraud

On December 9, the Los Angeles Times published a bombshell investigation exposing a huge increase in health care fraud at hospices in California. Los Angeles County is home to the largest number of hospice providers in the country. Unfortunately, many of these providers don't have the best interests of their patients at heart. These criminals abuse seniors, steal from the government, and often fire employees who challenge their cruel and inhumane practices.

Five Common Hospice Care Frauds

Hospice care can be big business. Medicare pays for hospice care, which means that the government frequently foots the bill.  In 2019, the government paid more than $19 billion dollars for hospice care treatment through Medicare. Because so much money is at stake, competition is fierce to secure patients and to maximize the rates paid by Medicare for each patient. Because most hospice care patients are elderly and may be unable to fully understand their own treatment options, they are uniquely vulnerable to these fraud schemes, which harms them as patients and rips off the government.

Here are five ways unscrupulous hospice providers abuse Medicare, taxpayers, and the terminally ill.

Classifying Healthy Patients as Terminally Ill

One of the most aggressive types of hospice fraud is diagnosing healthy seniors as "terminally ill." This allows a hospice provider to admit a patient otherwise not eligible for hospice care and to charge Medicare between  $154 to $1,432 a day. 

A related type of Medicare fraud is keeping patients in hospice care after they improve. Instead of releasing these patients, the hospice certifies that they are still terminally ill and keeps providing (and billing for) care—even though it isn't necessary, medically justifiable, or good for the senior. 

Providing Kickbacks for Patient Referrals

Payments in exchange for patient referrals, known as “kickbacks,” are illegal for Medicare patients. However, providers will often pay referral fees to doctors, nursing homes, drug treatment centers, or other facilities. They often disguise these payments as something else, like payment for "rent," "consulting," "advisory services," etc.  In some cases, hospice care providers have even actually covered regular expenses for referring facilities to disguise the kickback, such as writing rent checks, paying employees or moving them to the hospice provider's payroll, or other illegal schemes. They do this to ensure a steady stream of Medicare patients for whom they can bill the government.

Classifying Patients at Higher Levels of Care Than Necessary

Another common form of Medicare fraud common in the hospice industry is classifying patients as needing higher levels of care than necessary, which allows providers to maximize the daily payments that they receive for each patient. In the context of hospice care, the highest level of care is called “continuous” or “crisis” care, which is usually reserved for patients in the last seven days of their lives. Obviously, if a patient is in "crisis" care for many months, this could raise red flags and suggest the patient is being classified at a high level of care to overbill the government.

The patients may need less care than would justify placing them in the crisis category or in some cases may not need care at all. In one case, the country’s biggest hospice company at the time was accused of billing Medicare for crisis care delivered during nurse visits to the homes of patients who were actually out “at church, at the beauty parlor, or playing bingo” when the care was being "provided."

Providing More Treatment Than Necessary

Another way of maximizing Medicare payments is by giving patients treatment that they don't need. Overmedication is a common form of overtreatment in hospice fraud. It’s often done with painkillers, because hospice care is largely about pain management. Providers reason that no one will notice or question whether a terminally ill patient actually needs a few extra morphine injections or doses of opioids—even if the patient isn't in much pain at all, or pain the could be safely managed, without the risk of addiction, with over-the-counter medication. 

In addition to being fraudulent, giving patients unnecessary care may be assault, elder abuse, and a violation of ethical rules.

Kicking Dying Patients Out of Hospice Care to Avoid Caps

Medicare has an “aggregate cap” on how much it will pay a hospice. If a hospice exceeds the cap, it must refund the overage. Some hospice providers attempt to avoid this by kicking patients out when they exceed the cap, regardless of whether the patients are terminally ill or whether they have anywhere to go. 

In a particularly horrifying example, a hospice owner who hit the cap allegedly “got rid of” at least four patients by ordering staff to euthanize them with painkiller overdoses. He allegedly sent the “execution orders” by text message, and in one message told a nurse that “[y]ou need to make this patient go bye-bye.” Basically, a hospice owner ordered murder to keep overbilling Medicare. 

Health Care Whistleblowers Needed to Fight Hospice Fraud

Whistleblowers are the most effective way to fight health-care fraud because they are on the ground and witness fraudulent practices by providers first-hand. Additionally, California has specific protections for health-care workers who speak up about patient safety issues. 

In order to encourage whistleblowers to come forward and do the right thing, the False Claims Act provides that people who blow the whistle on Medicare fraud can receive up to 30% of the amount of money recovered by the government as a reward. Whistleblower rewards have entered the tens of millions of dollars in similar cases.  

If You See Health Care Fraud, Talk to An Experienced Whistleblower and Employment Attorney

Our experienced whistleblower attorneys can help you navigate False Claims Act cases and other complex whistleblower laws. Before working at King & Siegel, our attorneys did white collar criminal defense and saw firsthand how these types of cruel, abusive, and inhumane schemes work. We know that these cases are time- and resource-intensive and will devote the necessary energy to bring justice to wronged seniors, employees, and taxpayers. 

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