Largest-ever False Claims Act settlement with hospice provider

On October 30, 2017, the Department of Justice (DOJ) announced a $75 million settlement (the largest-ever settlement under the False Claims Act with a hospice provider) with Chemed Corporation, a Cincinnati-based operator of Vitas Hospice Services LLC and Vitas Healthcare Corp. (Vitas), to resolve allegations that between 2002 and 2013, Vitas submitted false claims to Medicare under the hospice benefit for patients who were not actually terminally ill.

The government also alleged that Vitas rewarded its employees with bonuses for the number of patients receiving hospice services and that Vitas submitted false claims to Medicare for continuous home care services that were not necessary, were not actually provided or were not performed in accordance with Medicare requirements. The government alleged that Vitas used aggressive marketing strategies and set goals for the number of continuous home care days billed to Medicare, pressuring staff to improperly increase the volume of these types of claims.

Vitas also entered into a five-year Corporate Integrity Agreement with the Health and Human Services Office of Inspector General (OIG) to settle the OIG’s administrative claims and avoid exclusion from federal health care programs.

 The allegations were brought to the government’s attention by way of three separate whistleblower lawsuits. Two of the whistleblowers were nurses who had worked at Vitas, while the third whistleblower was a physician who was formerly employed by Vitas. The whistleblowers will all receive a share of the settlement amount.

OIG Special Agent in Charge Steve Hanson commented: “Healthcare providers who knowingly overbill our programs simply to increase their profits need to be put on notice that such conduct will not be tolerated, and we will pursue any and all remedies at our disposal to protect the tax payer and the Medicare and Medicaid programs.”