A California physician who worked for two Pasadena hospices pleaded guilty on July 24, 2024, to defrauding Medicare out of more than $3 million by billing for medically unnecessary hospice services. According to his plea agreement, from July 2016 to February 2019, the defendant and a codefendant schemed to defraud Medicare by submitting nearly $4 million in false and fraudulent claims for hospice services submitted by two hospice companies. The codefendant controlled both companies.
The defendant falsely stated on claims forms that patients had terminal illnesses. He did this to make them eligible for hospice services covered by Medicare, typically adopting diagnoses provided to him by hospice employees whether or not they were true. He did so even though he was not the patients’ primary care physician and had not spoken to those primary care physicians about the patients’ conditions. Medicare paid on the claims supported by the defendant’s false evaluations and certifications and recertifications of patients.
Approximately $3,917,946 in fraudulent claims were submitted to Medicare, of which approximately $3,289,889 was paid.
According to Medical Board of California records, the defendant is a licensed physician in California, but has been on probation with the Board since 2015 and is subject to limitations on his practice. An October 25 sentencing hearing has been scheduled, at which time the defendant will face a statutory maximum sentence of 10 years in federal prison.
The codefendant remains at large. Another codefendant, who allegedly recruited patients for the hospice companies in exchange for illegal kickbacks, has pleaded not guilty and is currently scheduled to go on trial on October 15.
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. Medicare only covers hospice services for patients who are terminally ill, meaning that they have a life expectancy of six months or less if their illness ran its normal course. 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 policies and procedures related to hospice services to ensure they are accurate and current. Update policies 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.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
