False Claims Act Lawsuit: Hospice of Arizona to Pay $12 Million Settlement

Hospice is a specialized form of home healthcare intended for those patients who have a life expectancy of six months or less due to a terminal illness. Patients who are admitted to hospice care no longer receive preventative health treatments to cure an illness. Instead, hospice patients receive palliative care that focuses on the relief of the pain and stress of their disease, ensuring their comfort. Medicare covers costs of such specific care for its beneficiaries if, and only if, the patient’s disease has run a normal cost and the patient’s life expectancy is six months or less.

The Healthcare Fraud Violations

The government alleged that Hospice of Arizona and its related entities engaged in certain fraudulent practices that resulted in the admission of ineligible hospice patients or inflated bills. These actions include pressuring staff members to find additional patients who were eligible for Medicare services, utilizing procedures that delayed the discharge of patients from hospice care once services were no longer appropriate and failing to implement a compliance program that could have solved these issues.

As part of the settlement, American Hospice Management Holdings agreed to enter into a Corporate Integrity Agreement (CIA) with the Inspector General of the Department of Health and Human Services. The CIA agreement requires Hospice of Arizona and its related entities to participate in procedures and reviews that deter and detect fraudulent conduct that is similar to that which gave rise to the initial charges.

The United States government alleged that Hospice Care of Arizona L.C. and their two related companies pressured staff members to find Medicare eligible patients for admission, that they adopted policies that delayed and discouraged staff from discharging patients who no longer needed hospice care and that they did not have an adequate compliance program to address such issues.

“This settlement is the result of the Justice Department’s efforts to prevent the misuse of the taxpayer-funded Medicare hospice program, which is intended to provide comfort and care to terminally ill persons at the end of their lives,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division.

“The hospice industry relies on the Medicare Trust Fund, and payments for unnecessary services jeopardize its financial viability,” said U.S. Attorney for the District of Maryland, Rod J. Rosenstein.

“Medicare and taxpayers depend on hospice agencies to provide medically appropriate services to terminally ill patients,” said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including Arizona. “When providers place more importance on the bottom line than on the care of these vulnerable patients, they can expect to face serious penalties.”

Whistleblower of the False Claims Act Lawsuit

The original lawsuit was filed by a former employee of Hospice of Arizona under the qui tam, or whistleblower provisions, of the False Claims Act. Under the False Claims Act, any private citizen with first hand knowledge of government fraud can speak to a False Claims Act or whistleblower lawyer and bring a lawsuit on behalf of the United States for false claims and share in any recovery. Under provisions of the Act, the whistleblower, Ellen Momeyer, will receive $1.8 million of the government’s total recovery as a reward for bringing Medicare fraud to its attention.

The claims of this case were investigated by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Maryland and the Office of the Inspector General for the Department of Health and Human Services.