The US Attorney’s Office for the Southern District of Texas announced on September 27, 2023, that a 52-year-old San Antonio man had been sentenced for his role in a scheme that involved the submission of over $150 million in false and fraudulent claims to Medicare for hospice and other healthcare services.
The defendant was ordered to serve 50 months in federal prison to be immediately followed by one year of supervised release. The court also ordered him to pay $9 million in restitution and $9 million in forfeiture. A federal jury convicted his three co-conspirators in October 2019.
From 2009 to 2018, the defendant served as the medical director of a large healthcare company that operated dozens of locations throughout Texas. He was a physician, but the Texas Medical Board later suspended his medical license.
Evidence at the trial showed that the company marketed their hospice programs through a group of companies. They enrolled patients with long-term incurable diseases such as Alzheimer’s and dementia as well as patients with limited mental capacity who lived at group homes, nursing homes, and in housing projects. In some instances, the company’s marketers falsely told patients they had less than six months to live. They also sent chaplains to the patients based on the false pretense they were near death.
In order to bill Medicare for these services, the company hired the defendant and other medical directors, but made payment of their medical director fees contingent upon an agreement to certify unqualified patients for hospice. In addition to regular medical director payments, the defendant received luxury trips, bottle service at exclusive nightclubs, and other perks in exchange for his certification of unnecessary hospice patients. In exchange for these illegal kickbacks, the defendant himself certified over $18 million in unnecessary hospice services as part of the over $150 million conspiracy.
Two of the co-conspirators were previously sentenced to 20 and 15 years in prison, respectively. The third is now deceased.
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 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.*
