In The News

Chemed Corp. and Vitas Hospice Services Agree to Pay $75 Million to Resolve Alleged False Claims Violations

One unfortunate theme we see revisited in the government’s efforts to cut down on Medicare fraud and abuse is when companies are alleged to have exploited the system at the expense of the terminally ill. Such was the case late last month when the government announced that Chemed Corporation, its various subsidiaries, Vitas Hospice Services and Vitas Healthcare Corporation have agreed to pay $75 million to resolve allegations that they violated the False Claims Act by submitting false claims for hospice services to Medicare. “Today’s resolution represents the largest amount ever recovered under the False Claims Act from a provider of hospice services,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Medicare’s hospice benefit provides critical services to some of the most vulnerable Medicare patients, and the Department will continue to ensure that this valuable benefit is used to assist those who need it, and not as an opportunity to line the pockets of those who seek to abuse it.” Chemed acquired Vitas in 2004.

The settlement reached last month resolves allegations that between 2002 and 2013 Vitas knowingly submitted false hospice claims to Medicare for patients who were not terminally ill. Medicare’s hospice benefits are available for patients who elect palliative treatment (care that is focused on relieving a patient’s stress and pain rather than curing a terminal illness). The government alleges that since the claims Vitas submitted were for patients who were not terminally ill, they did not qualify for benefits under Medicare. Moreover, the government alleged that the defendants rewarded its employees with bonuses for the number of patients who received hospice services as an incentive.

The settlement also resolves allegations that between 2002 and 2013, Vitas knowingly submitted false claims to Medicare for continuous home care services that were also not necessary. According to the government’s complaint, the defendants used aggressive marketing tactics and pressured staff to increase the volume of continuous home care claims regardless of whether or not patients required this type of care. Medicare’s hospice benefits reimburse providers for four different levels of care including continuous home care services. Continuous home care service is for patients who are experiencing acute symptoms causing a brief period of crisis. The reimbursement rate for continuous home care services is the high daily rate that Medicare pays.

Steve Hanson, Special Agent in Charge, for the U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Region, has stated, “Healthcare providers who knowingly overbill our programs simply to increase their profits need to be put on notice that such conduct will not be tolerated, and we will pursue any and all remedies at our disposal to protect the tax payer and the Medicare and Medicaid programs.” Vitas Healthcare Corporation has entered into a five-year Corporate Integrity Agreement (CIA) with the HHS Office of the Inspector as part of the settlement reached last month. The settlement reached in this case resolves three lawsuits filed under the whistleblower provisions of the FCA. This provision of the False Claims Act permits private parties to file suit on behalf of the United States for false claims and to share in a portion of the recovery. The amount to be paid to the whistleblowers in this case has yet to be determined.