• National Dentex Corporation
  • Public company merger with GeoDigm Corporation
  • Boston Celtics
  • Develpment of new practice facility, Boston, MA
  • Massachusetts Clean Energy Technology Center
  • Series A Preferred Stock Investment in 7AC Technologies, Inc.

Trends in Hospice Compliance

Ruselle Robinson May 25, 2012

Hospice providers must be vigilant about Medicare compliance.  In recent years, the Justice Department and the Office of Inspector General of the U.S. Department of Health and Human Services have targeted cases of suspected hospice fraud.

The Justice Department has chosen to intervene in a number of pending high-profile whistle-blower suits involving allegations of fraud by hospice providers.  A recent example is the AseraCare case pending in the Southern Division of the Northern District of Alabama.  While the case was filed in Alabama, AseraCare is a national hospice provider with offices in 19 states.

The whistle-blowers in this case were former AseraCare employees, who filed a complaint in federal court alleging that AseraCare had engaged for a number of years in practices that resulted in fraudulent Medicare claims.  The Justice Department decided to join the suit in late 2011 and took over prosecuting the case.  The whistle-blowers will receive a percentage of any federal monetary penalties assessed against AseraCare.

In general, the Justice Department alleges that AseraCare recruited and enrolled elderly patients in its hospices who were not really dying, and then kept the ineligible patients on hospice long after the patients should have been discharged.

The allegations against AseraCare include the following: 

  • The company pressured it staff to admit and retain patients who were not eligible for Medicare hospice benefits, and then billed Medicare for those patients.
  • The company avoided using physicians to make all determinations of patient eligibility as required by Medicare. 
  • The company failed to adequately train its staff on the eligibility requirements for Medicare hospice benefits.
  • The company knew or should have known of its violations because it ignored internal warnings from its staff and an outside auditor that the company was admitting and retaining patients who were not eligible for Medicare hospice benefits.

The Justice Department uses examples of patients in stable health who were admitted to an AseraCare hospice and remained under care long after it became apparent the patient was not dying or in physical decline.

The allegations against AseraCare, if true, show a corporate culture intent on maximizing profits with a reckless disregard for Medicare compliant admission and discharge practices.

AseraCare denies the allegations and is contesting the Justice Department claims.  The penalties assessed against AseraCare could run into tens of millions of dollars if the allegations are proven.

To avoid, or at least minimize the possibility of being in the position of AseraCare, we recommend the following:

  • Adopt policies that don’t provide incentives for your employees to push for inappropriate admissions.
  • Train your staff (and refresh that training from time to time) about Medicare requirements for admission and retention of patients.
  • Make sure your admission and patient retention practices (not just your written policies) are consistent with Medicare requirements.
  • Pay attention to reports you get from your staff or your outside auditor about business practices that may be questionable.  Remember, the whistle-blowers in the AseraCare case were former employees who lost patience with company practices.

If you have any questions or need additional information regarding this, please contact Ruselle W. Robinson.

This Alert is provided for information purposes only, and does not constitute legal advice.  According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2012 Posternak Blankstein & Lund LLP.  All rights reserved.

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