Chemed Corporation, along with several wholly-owned subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, (collectively “Vitas”) have agreed to settle a government suit and three whistleblower actions, all of which allege that the defendants violated the False Claims Act (FCA) by submitting false claims for hospice services to Medicare.  The $75 million settlement represents the largest-ever hospice FCA settlement.

Chemed, which is based in Cincinnati, Ohio, acquired Vitas in 2004. Vitas is the largest for-profit hospice chain in the U.S.

The settlement resolves allegations that between 2002 and 2013 Vitas submitted false claims to Medicare for services to hospice patients who were not terminally ill. The government’s complaint stated that Vitas billed Medicare for patients who were not terminally ill and therefore did not qualify for the hospice benefit.  In addition, the government charged that Vitas paid bonuses to employees based on the number of patients receiving hospice services without regard to whether they were actually terminally ill and whether they would have benefited from continuing curative care instead of being placed in the Medicare-funded hospice program.

During the same time period, the government also alleged that Vitas submitted false claims to Medicare for continuous home care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements.  Under Medicare, providers may be reimbursed for a number of different levels of care, including so-called continuous home care services.  Continuous home care services are available only for patients who are experiencing acute medical symptoms causing a brief period of crisis.  The reimbursement rate for continuous home care services is the highest daily rate that Medicare pays, and hospices are paid hundreds of dollars more on a daily basis for each patient they certify as having received continuous home care services rather than routine hospice services.  According to the complaint, “the defendants set goals for the number of continuous home care days billed to Medicare and used aggressive marketing tactics and pressured staff to increase the volume of continuous home care claims, without regard to whether the patients actually required this level of crisis care.”

Under the terms of the settlement, neither Chemed nor Vitas admitted any wrongdoing. However, in addition to the $75 million payout, Chemed and Vitas entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services (HHS).

In a statement, a spokesman for the HHS Office of Inspector General remarked that, “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.”

The FisherBroyles Health Care and Pharmacy Law team offers complete compliance reviews for health care providers, pharmacists, and pharmacies across the U.S. and can provide counsel regarding both state and federal laws and regulations. Please contact any of the following attorneys for assistance:

Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson

Anthony Calamunci, FisherBroyles Partner
Anthony Calamunci

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid

Amy Butler, FisherBroyles Partner
Amy Butler

Katy Wane, FisherBroyles Partner
Katy Wane