As reported in the December 26th Washington Post article “Hospice Firms Draining Billions from Medicare,” a spate of recent lawsuits against hospice providers reflects a growing focus on hospice operations by both the government and disgruntled employees availing themselves of the False Claims Act’s qui tam provisions. 

As Medicare expenditures for hospice care continue to soar, the federal government has assumed an increasingly active role in combating perceived problems of hospice fraud.  The Department of Health & Human Services Office of Inspector General and the Department of Justice contend that many hospice providers have pursued a variety of illicit schemes to improperly obtain hospice benefit payments.  False Claims Act lawsuits alleging hospice fraud are increasing both in frequency and amount in controversy, resulting in recent settlements of up to $25 million.  This trend shows no sign of slowing.  This past May the Department of Justice grabbed headlines when it intervened in a whistleblower lawsuit against VITAS, the largest for-profit hospice chain in the country. 

Relators’ counsel have taken notice of recent legal developments and a simple Internet search for “hospice whistleblowers” now turns up numerous websites actively recruiting hospice employees for potential whistleblower suits.  A press release from Corporate Whistleblower Center (an apparent whistleblower attorney referral service), for example, encourages hospice employees to contact them directly “for information about possible reward programs” and warns against engaging their employers regarding perceived fraud, advising that “any suggestion of exposure might result in instant job termination . . . .”.  

Penalties for erroneous hospice claims can be severe.  Hospice providers found liable under the False Claims Act face treble damages and civil penalties between $5,500 and $11,000 for false claim.  To avoid the risk of costly litigation and crippling fines, hospice providers should carefully monitor their compliance with Medicare requirements. 

For more information, this article provides an overview of Medicare conditions of participation, major risk areas for noncompliance, and recent legal actions involving hospice providers to help guide decision-makers in crafting effective compliance programs.