Earlier this month, the Department of Justice filed its complaint in a multi-million dollar Medicare fraud case perpetuated by now-defunct Home Care Hospice, Inc. – an organization also facing significant criminal penalties and fines for its role in siphoning large sums of money away from Medicare patients in need of end-of-life care. The government opted to intervene in the case nearly two years ago after two whistleblowers filed a qui tam lawsuit on behalf of the United States.
Details of U.S. ex rel. Robert Fox v. Home Health Care, Inc., et al.
Home Health Care, Inc., (HHC) was based in the Philadelphia area and served patients facing terminal illness in need of hospice care. When it first began operating in 1999, it offered services to just 15 patients. By 2006, its operation had grown to nearly 300 available beds across several facilities in the Philadelphia area.
In 2006, two former employees of HHC became aware of possible misuse of Medicare funds. When the employees questioned the practices internally, one was promptly fired – the other quit shortly thereafter. From there, both employees met with a whistleblower attorney and filed an action under the False Claims Act.
Under applicable Medicare law, reimbursement for hospice care is approved only if the patient is deemed to have six months or less to live. Moreover, a hospice facility may bill Medicare at a higher rate if a particular patient is in need of “crisis care,” or care requiring immediate, short-term, skilled nursing services. During the time period in question, crisis care was reimbursed at a rate of approximately $880 per day, while routine hospice home care was reimbursed at a rate of approximately $140 per day.
The allegations against HHC focus on its consistent and perpetual misuse of Medicare funds and misclassification of patients as eligible for hospice and crisis care. HHC’s marketing and business practices were allegedly resulting in “unreasonable” and “unnecessary” billings for patients who either did not qualify for hospice care at all or were hospice-eligible but did not need the costly crisis care services. In many cases, patients were admitted to HHC’s hospice facilities despite having a life expectancy beyond that of the six-month cutoff period for hospice care. From 2003 through 2008, Medicare reimbursements made up 91 percent of HHC’s revenue – amounting to a staggering $49 million.
U.S. Attorney for the Eastern District of Pennsylvania Louis D. Lappen remarked on HHC’s gross misuse of Medicare funds by stating, “Too often….we hear reports of companies that abuse this critical service by enrolling patients who do not qualify for the hospice benefit, do not provide claimed services, or who push patients into services they don’t need in order to get higher reimbursements from the government…. The Department of Justice, including this office, will take swift action to protect the public welfare and taxpayer dollars and to make sure that Medicare benefits are available to those who truly need them.”
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Whistleblower lawsuits can help reduce or eliminate costly and wasteful healthcare fraud. If you are aware of misconduct by your healthcare provider or employer involving Medicare or Medicaid patients, we encourage you to contact us today.