A Texas Hospice CEO was sentenced to 15 years in federal prison on February 2, 2021, for falsely telling patients they had mere months to live and increasing revenue by enrolling them in hospice programs for which they neither qualified nor needed. In November 2019, a federal jury found the CEO guilty of one count of conspiracy to commit healthcare fraud, conspiracy to commit money laundering, obstruction of justice, and six counts of healthcare fraud.
From 2009 to 2018 the CEO and others orchestrated a scheme that involved the submission of over $150 million in false and fraudulent claims for hospice and other healthcare services. According to evidence that was presented at the trial, the CEO and others adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They aggressively enrolled patients with long-term incurable diseases, such as Alzheimer’s and dementia, and also patients with limited mental capacity who lived in group homes, nursing homes, and in housing projects. The group even falsely told patients they had less than six months to live.
The CEO and others also purposely kept patients who did qualify for hospice care alive for as long as possible for their own monetary gain. The CEO and others persuaded their patients to engage in surgical and other medical interventions designed to extend life through the use of medical technologies, even when such interventions were not consistent with the goals of hospice care. The CEO enforced a company-wide practice of falsifying medical records to conceal the scheme. Multiple witnesses testified that the CEO ordered employees to alter medical records to make it appear patients were terminally ill. He also adopted a policy that paid illegal kickbacks. The group directed bribes to physicians under the guise of medical director fees to certify unqualified patients for hospice and home health. In some cases, they improperly offered payoffs to marketers in exchange for recruitment of patients who could be placed on extremely expensive hospice services.
One of the co-conspirators has been sentenced to 240 months imprisonment, while two others have pleaded guilty and are awaiting sentencing.
Issue:
It is essential that nursing facility leaders are informed of admitting diagnoses for residents enrolled in hospice services. The medical director should ensure that residents admitted into hospice services are appropriate for this level of care. Residents or their responsible parties should be informed of what hospice services entail and educated that at any time they are free to stop the hospice services should they later decide to do so.
Discussion:
- Review policies and procedures related to hospice services to ensure they are accurate and current. Update policies as needed.
- Train all appropriate staff on qualifiers for hospice services and the process for properly making a hospice referral. Educate staff that each resident has the right to make informed decisions and to select or refuse medical treatment. (F552 – Right to Make Treatment Decisions). Document that the trainings occurred and place in each employee’s education file.
- Periodically audit to ensure that all residents enrolled in hospice services meet the criteria for those hospice services. Ensure that residents and/or their representatives understand their right to refuse or end treatment. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 7 Resident Rights.
