Category Archives: Hospice Care Fraud

San Diego Hospice Whistleblower Lawsuit Settles for Millions

SDHIPMThe whistleblower law firm of Baum, Hedlund, Aristei & Goldman has announced a multi-million dollar settlement with San Diego Hospice & Palliative Care Corporation. The settlement resolves a 2012 qui tam lawsuit filed by whistleblower attorneys Mark H. Schlein and Diane Marger Moore on behalf of a former hospice nurse who claimed that San Diego Hospice knowingly submitted false claims for Medicare reimbursement.

San Diego Hospice billed for and received Medicare reimbursement based on care provided to patients that did not meet federal eligibility criteria for hospice care. In order to qualify for Medicare’s $172-per-day hospice care, a patient must have a diagnosis of six months or less to live. According to the San Diego Union Tribune, San Diego Hospice officials occasionally changed patient records to make it appear as though patients were dying when in fact they were getting better. The hospice also had an “open access” policy in 2005, opening their doors to “virtually all” patients, even if they were not eligible for hospice care according to federal rules.

The qui tam law suit led to a federal investigation and a comprehensive audit of patient records. The audit and investigation, coupled with admissions by its officers, resulted in the San Diego Hospice filing for bankruptcy and ceasing operations. Despite the bankruptcy, the U.S. has received an initial recovery of $1 million pursuant to the terms of the settlement agreement. When distribution of all bankruptcy funds is completed, it is expected that the government will recover millions more.

Omnicare to Pay $124 Million to Settle False Claims Allegations

download (1)The Justice Department announced today that Omnicare Inc. will pay $124 million to resolve allegations that the pharmacy company provided skilled nursing homes with illegal discounts in return for the opportunity to continue to provide drugs to Medicare and Medicaid beneficiaries. The discounts allegedly resulted in Omnicare making false claims for Medicare and Medicaid reimbursement.

The alleged scheme worked like this: Omnicare entered into contracts with skilled nursing facilities to provide prescription medication below cost. In return, the skilled nursing homes would select Omnicare to provide drugs for their Medicare and Medicaid patients, as the facilities would save money on drug costs. Omnicare would then overcharge for the prescription drugs it billed to the government.

Providing a break on price represents a violation of the Anti-Kickback Statute, which prohibits the offering, paying, soliciting or receiving of payment in exchange for referrals for items or services covered by government health care agencies. This regulation is in place to make sure that health care suppliers like skilled nursing homes choose suppliers based on the best interest of patients, not financial perks.

According to the Justice Department, the settlement resolves allegations initially filed by two whistleblowers. One of the whistleblowers, former Omnicare employee Donald Gale, will receive $17.24 million for his role in exposing Omnicare’s alleged fraud.