Last month, we issued a client alert on the rising number of fraud, waste, and abuse cases being seen in the hospice care industry. Today we provide yet another example of the rising tide of hospice-related fraudulent schemes that the government is actively uncovering and prosecuting.

This past Tuesday, the U.S. Attorney’s Office, Northern District of Texas announced a $12.2 million settlement with five hospice companies that engaged in two schemes to submit false claims to Medicare and Texas Medicaid.

International Tutoring Services, LLC, f/k/a International Tutoring Services, Inc., and d/b/a Hospice Plus; Goodwin Hospice, LLC; Phoenix Hospice, LP; Hospice Plus, L.P.; and Curo Health Services, LLC f/k/a Curo Health Services, Inc. have agreed to pay $12.2 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for patient referrals. Curo Health Services, headquartered in North Carolina, operates eight hospice affiliates across 18 states. In September 2010, Curo Health Services purchased Hospice Plus, Goodwin Hospice (Goodwin), and Phoenix Hospice (Phoenix), and consolidated the hospice companies under the Hospice Plus brand, which operates primarily in and around Dallas, Texas.

The allegations against Hospice Plus, Goodwin, and Phoenix were originally raised in two consolidated whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.

The first scheme, which operated from 2007 through 2012, involved kickbacks paid to American Physician Housecalls. The kickbacks, paid in exchange for patient referrals, encompassed sham loans, a free equity interest in another entity, stock dividends, and free rental space.

In the second scheme, running from 2007 through 2014, kickbacks were paid to medical providers (including doctors and nurses, as well as hospitals and long-term care facilities) in exchange for patient referrals. The recompense for the referrals included cash, gift cards, and other items of monetary value.

In addition to announcing the settlement, the government also stated that it has asked the court for permission to intervene and prosecute the fraud claims against two former Hospice Plus executives, Medical Director Dr. Bryan White and COO Suresh Kumar. The case against the two is pending in the Federal District Court, Northern District of Texas.

As noted by U.S. Attorney John Parker, “We will not tolerate the payment of illegal kickbacks, which unjustly drive up the cost of health care. Any health care provider who seeks to profit illegally at the expense of federal beneficiaries and taxpayers will face consequences.”

The FisherBroyles Pharmacy and Health Care Law team will continue to track cases of fraud, waste, and abuse in hospice settings. We offer complete compliance reviews for hospice facilities, along with pharmacies and other healthcare entities, across the U.S. Please contact any of the following attorneys for assistance:

Brian E. Dickerson

Anthony Calamunci

Nicole Hughes Waid

Amy Butler

Katy Wane