Fourteen individuals have been accused of stealing more than $4.2 million from Medicare and Medi-Cal programs. The fourteen individuals who were arrested are from two California hospice companies accused of defrauding federal and state healthcare programs.
The two California hospice companies are accused of enrolling patients who were not terminally ill into hospice care. During the investigation it was discovered that many of the individuals were enrolled into the hospice program without their knowledge or their understanding of what hospice was.
The investigation was led by the California Department of Justice, with assistance from the U.S. Department of Health and Human Services Office of Inspector General and the California Employment Development Department. The investigation determined that from 2015 to 2021, the defendants allegedly fraudulently claimed that they were providing hospice care to patients who had less than six months to live, when in fact these patients were not terminally ill. Each of the fourteen defendants played a part in the alleged fraud, which included paying illegal kickbacks to recruit patients for hospice care; including patients who did not qualify for hospice because they were not terminally ill; taking patient identity information and using it to enroll them in hospice without their knowledge; falsely representing to patients what services they would be receiving; and billing patients with one company, only to switch them to the other company in order to avoid detection.
Since the patients were enrolled in hospice services, it would be challenging for them to receive approval for lifesaving medical treatment such as chemotherapy to treat cancer or other measures intended to prolong their lives, if the need did arise.
The fourteen defendants face multiple felony counts, including conspiracy to commit insurance fraud, insurance fraud, grand theft, and fraudulent insurance claims, with some defendants also facing charges related to identity theft, money laundering, and tax evasion. Two defendants facing these charges are still at large.
California Attorney General Rob Bonta stated, “End-of-life care is a difficult process for families to endure, and patients should be able to trust that their hospice providers are acting in good faith. The crimes allegedly committed by the defendants against their patients, Medicare, and our state’s Medi-Cal program will not be tolerated. My office is committed to protecting the well-being of Californians and prosecuting those who abuse the financial integrity of our healthcare system.”
Compliance Perspective
Issue
All medical services that are provided must be medically necessary, and the patient or resident must be eligible for the services that are provided and involved in the decision to choose those services. Individuals receiving Hospice services must meet specific criteria to be eligible for the program, including having less than six months to live. Providing medical services that are not necessary can be considered a false claim. Failure to promptly report a false claim or a kickback can result in lawsuits, fines, and other sanctions.
Discussion Points
- Review your policy and procedure on enrolling a resident into a hospice program in your facility. Update as needed.
- Train staff on the criteria that must be met to enroll a resident into the hospice program. Additionally, train nursing staff and social services on the procedure to follow for receiving or making hospice referrals. Document that these trainings occurred and file each signed document in the employee’s education file.
- Periodically audit to ensure that residents enrolled in hospice programs meet eligibility criteria, and that documentation is sufficient to support the need for hospice services.
