Medicare Would “Likely” Not Pay for Hospice Care for Deceased Patients

If one reads between the lines of a May 7, 2019 opinion from the U.S. Court of Appeals for the Fifth Circuit (covering Texas, Louisiana and Mississippi), it appears that the court comes to the seemingly unremarkable conclusion that Medicare would not intentionally pay for hospice care for patients who are dead:

“Relators claimed that ‘on approximately four occasions in 2013–2014, patients were admitted by the Defendants’ Austin office to hospice care despite already being deceased.’ ” U.S. ex rel. Lemon v. Nurses To Go, Inc., 924 F.3d 155, 158 (5th Cir. 2019).

What is notable about the decision, though, is that the trial court had dismissed the case (including those allegations) on the grounds that the whistleblowers had not adequately alleged that the ostensible false claims were significant enough to matter to the government!

Trial Court Dismisses Case

In a rather stunning rejection of the rule that inferences on a motion to dismiss should be drawn in the plaintiff’s favor, the district court sloughed off the allegations about dead patients:

“[Relator] says that Nurses To Go admitted patients who were already dead. A hospice is probably obliged to admit them to make sure they are dead. The hospice’s continuing to treat the corpses might be a problem, but nothing suggests that that happened.” U.S. ex rel. Lemon v. Nurses To Go, Inc., 2018 WL 1898559, at *2 (S.D. Tex. Apr. 20, 2018)(emphasis added), rev’d and remanded sub nom. U.S. ex rel. Lemon v. Nurses To Go, Inc., 924 F.3d 155 (5th Cir. 2019).

“[C]ontinuing to treat … corpses” might be a problem?  Thankfully, the appellate court determined that the allegations of false claims were sufficiently material and reversed the trial court.

Case Allegations

To be sure, the case did not primarily involve billing for deceased patients. Relators alleged that the hospice company failed to document patients’ eligibility for hospice care; failed to have in-person meetings conducted by physicians (as required by hospice eligibility regulations); and routinely  certified that patients were eligible for the highest (and most expensive) level of hospice care, called continuous  care, without assessing whether they really needed such care. Documentation of eligibility should have, but often did not, include a determination that a patient likely had less than six months to live, as is required for hospice care. Interestingly, the district court let the company off the hook on the continuous care issue because it appeared as though the company did, in fact, administer continuous care. Thus it was “not a case where Nurses To Go was billing routine care as though it were continuous care.”  2018 WL 1898559, at *3.

The allegations concerning the overuse of continuous care were quite compelling. Relators alleged that Nurses To Go dangled the offer of 72 hours of initial continuous care as a marketing ploy. When relators and others challenged the practice and stopped it for a time, the number of continuous care hours billed to the government at high rates dropped dramatically, from an average of 323 hours per month to only six hours. Although the district court concluded that actually providing such care immunized the company from liability for false claims, the appellate court made short shrift of such an approach because it failed to consider whether the care – even if provided – had been needed.

As the court explained:

“Defendants’ patient enrollment scheme—automatically providing 72 hours of continuous care for new patients without regards to medical diagnosis—overbills the Government for unnecessary hospice services.” U.S. ex rel. Lemon v. Nurses To Go, Inc., 924 F.3d at 162–63.

Since continuous home care is the costliest care available, and is reserved for a very brief period for a small number of patients who are experiencing a crisis, the court concluded that it had “no reason to believe that Medicare would reimburse Defendants” for those unnecessary services. Id. at 163. Quite simply, dismissing the allegations of false claims because the services might have actually been provided “misses the point.” Id. A healthcare provider cannot provide and charge the government for services that do not meet the eligibility standards.

The court also evaluated the question of whether the government would have paid the claims had it known the facts alleged in relators’ complaint, one of the criteria the Supreme Court laid out in Universal Health Services, Inc., v. United States, ex rel. Escobar, 136 S.Ct. 1989 (2016) for a determination whether the alleged violations were material to the government’s decision to pay the claims. The appellate court determined that relators’ allegations that the U.S. Department of Health and Human Service’s Office of Inspector General has taken criminal and civil enforcement actions against other hospice providers that submitted bills for ineligible services or patients provided a reasonable inference that the government would deny payment if it knew about the alleged violations. U.S. ex rel. Lemon v. Nurses To Go, Inc., 924 F.3d at 162.

Conclusion

This case is the latest example of federal courts struggling to apply the Escobar standards without creating insurmountable obstacles at the pleading stage of a case. If you believe you have witnessed a company engaging in questionable conduct in dealing with the federal government, contact an experienced False Claims Act lawyer. You could help the government catch a cheating company, save taxpayer dollars, and earn a reward for your efforts!

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