and Financial Relationships
with Nursing Facilities
Plan, the OIG stated it will focus on
hospice marketing practices and financial
relationships with nursing facilities. The
OIG's Office of Evaluation and Inspections
(OEI) was tasked with reviewing
marketing materials and practices by
hospices to determine if they are overly
aggressive or incorrectly define the
Medicare hospice benefit and eligibility
criteria. In a 2009 report, the OIG found
that 82 percent of hospice claims for
nursing facility beneficiaries did not meet
Medicare coverage requirements.
the OIG. The OIG issued a report in July
2011 that focused on the relationships
between hospices and nursing homes.
hospices surveyed had more than two-
thirds of their beneficiaries residing in
nursing facilities in 2009 (referred to as
"high-percentage hospices"). The OIG
pointed out in the report that 72 percent of
high percentage hospices were for-profit,
compared to 56 percent of all hospices,
and that for-profit hospices, on average,
were reimbursed 29 percent more per
beneficiary than nonprofit hospices and
53 percent more per beneficiary than
government-owned hospices. The OIG's
recommendation was that CMS monitor
high percentage hospices closely and
examine whether these hospices are
meeting Medicare requirements. It is clear
that the OIG will be keeping a watchful
eye on marketing practices targeting
hospice beneficiaries, as well as on high
reimbursement care administered in the
hospice environment.
Actions
of hospice activities referenced above has
resulted in significant actions and recov-
eries by the DOJ and OIG. In May 2013,
the DOJ filed suit against Vitas Innovative
Hospice Care (Vitas), the nation's larg-
est for-profit hospice chain, alleging false
Medicare billings for hospice services.
Vitas paid employees bonuses tied to the
number of patients they enrolled for crisis
care services when those services were
not reasonably medically necessary. The
complaint further alleged that Vitas used
"aggressive marketing tactics and expected
their employees to increase the number of
crisis care claims submitted to Medicare,
without regard to whether the crisis care
services were appropriate."
tensive comfort care" services in one of its
brochures and "misled patients and their
families to believe that the Medicare hos-
pice benefit would routinely cover around
the clock care for hospice patients, absent
the requisite acute medical symptoms
resulting in brief periods of crisis."
In March 2013, Hospice of Arizona
L.C., a hospice management company,
agreed to pay $12 million and enter into
a corporate integrity agreement to resolve
allegations that Hospice of Arizona,
along with its related entity and parent
corporation, submitted or caused the
submission of false Medicare claims for
patients who were ineligible to receive end
of life benefits, or for whom the hospice
submitted bills at a higher reimbursement
than it was entitled. The government
alleged that Hospice of Arizona pressured
staff to find more patients eligible for
Medicare, adopted procedures that
delayed and discouraged staff from
discharging patients from hospice when
they were no longer appropriate for such
services, and did not implement an
adequate compliance program that might
have addressed these problems. The
allegations arose under a qui tam lawsuit
filed by a former Hospice of Arizona
employee. The former employee who filed
the underlying qui tam action received
$1.8 million as her share. After reaching
the settlement, Stuart F. Delery, Principal
Deputy Assistant Attorney General for
the DOJ's Civil Division, noted that
"[T]his settlement is the result of the
Justice Department's efforts to prevent
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."
continue to target and pursue hospice
care providers through the HEAT
initiative. Hospice care providers should
have strong compliance programs that
address quality of care concerns, as
well as implement and update their
procedures for submitting claims to
Medicare. Hospice care providers
should also engage skilled resources
to ensure hospice beneficiaries are
properly enrolled and that claims are
submitted for the accurate level of care.
A culture of non-retaliation should be
encouraged to avoid the potential for
former or current employees to file qui
tam lawsuits under the False Claims Act.
The effects of a government investigation
and whistleblower suit can be painful,
not only from the payment of significant
fines and negative publicity, but also
the possibility of entering a corporate
integrity agreement. Moreover, in certain
cases, hospice providers can be excluded
by HHS from Medicare or criminal
indictments may be filed against the
hospice provider pursuant to the federal
health care fraud statute or the federal
Anti-Kickback Statute.
Abuse Control Program Annual Report for Fiscal Year
2011 at 48 (Feb. 2012), available at http://oig.hhs.gov/
publications/docs/hcfac/hcfacreport2011.pdf.
Abuse Control Program Annual Report for Fiscal Year
2012 at 1 (Feb. 2013), available at https://oig.hhs.gov/
publications/docs/hcfac/hcfacreport2012.pdf.
Medicare Hospice: Use of General Inpatient Care (No.
OEI-02-10-00490, May 2013), available at https://oig.
hhs.gov/oei/reports/oei-02-10-00490.pdf.
Medicare Hospice Care For Beneficiaries In Nursing
Facilities: Compliance With Medicare Coverage
Requirements (No. OEI-02-06-00221, September
2009), available at http://oig.hhs.gov/oei/reports/oei-
02-06-00221.pdf.
Medicare Hospices That Focus On Nursing Facility
Residents (No. OEI-02-10-00070, July 2011), available
at https://oig.hhs.gov/oei/reports/oei-02-10-00070.pdf.
$12 Million to Resolve False Claims Act Allegations
(Mar. 20, 2013), available at http://www.justice.gov/
opa/pr/2013/March/13-civ-326.html.