Kick-backs between Nursing Homes and Hospice Providers

Handling Whistleblower Cases Nationwide from Newport News, Virginia

Hospice-fraud

There is a lot of waste in government-run programs generally, and a lot of waste and fraud and misuse of money in Medicare and Medicaid that can be saved. - Chuck Grassley

Providing hospice care in the United States has become big business with big profits.  “For profit” hospice providers have shown significant growth over the last several years and further, according to a 2015 report from the Medicare Payment Advisory Commission, for-profit hospices profit margins exceed 15 percent.   Now over a $17 billion industry, a Washington Post investigation in 2014 showed  that patient care has suffered as the industry has transformed from one dominated by non-profit organizations to one that is driven by profits. 

 With big money at stake, also comes desire to drive more business and sometimes the temptation to do so unethically and illegally. The close relationships between hospice care providers and nursing homes can be particularly conducive to fraud.  This is nothing new.  In fact, recognizing this, in March of 1998, the Office of Inspector General of the Department of Health and Human Services issued a Special Fraud Alert concerning fraud and abuse in nursing home arrangements with hospices. In this Special Fraud Alert, the Office of Inspector General indicated that because kick-backs can distort medical decision making, result in over utilization, and have an adverse effect on the quality of health care that patients receive, they are prohibited under Medicare, Medicaid and other federal payor programs.  Moreover, there is a federal anti-kickback statute that addresses this conduct.  

Specifically, 42 U.S.C. §1320(a)-7B(b)(1) provides, in part, that it constitutes illegal remuneration for anyone that knowingly and willfully solicits or receives remuneration (including any kick-back bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal Healthcare Program.  42 U.S.C. §1320A-7B(b)(2) further provides that it constitutes illegal remuneration for anyone that knowingly and willfully offers or pays any remuneration (including any kick-back bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Medicare, Medicaid or other federal payor program.

As a result, under the anti-kick back statute, it is illegal to knowingly and willfully solicit, receive, offer, or pay anything of value to induce referrals or items of services payable by a Medicare, Medicaid or other federal payor program.  In his special fraud alert, the Inspector General listed the following specific conduct as suspected kickbacks. 

1.A hospice offering free goods or goods offered below fair market value to induce a nursing home to refer patients to the hospice.

2.A hospice paying room and board payments to the nursing home in amounts in excess of what the nursing home would have received directly from Medicaid had the patient not been enrolled in hospice.

3. A hospice paying amounts to the nursing home for additional services that Medicaid considers to be included in its room and board payment to the hospice.

4.A hospice paying above fair market value for additional non-core services which Medicaid does not consider to be included in its room and board payment to the nursing home.

5.A quid pro quo arrangement whereby a hospice is referring its patients to a nursing home to induce the nursing home to refer its patients to the hospice.

6.A hospice providing free (or below fair market value) care to nursing home patients, for whom the nursing home is receiving Medicare payment under the skilled nursing facility benefit, with the expectation that after the patient exhausts the skilled nursing facility benefit, the patient will receive hospice services from that hospice.

7.A hospice providing staff at its expense to the nursing home to perform duties that otherwise would be performed by the nursing home.

Fraud under these circumstances is particularly egregious considering the fact that hospice providers, by definition, are providing services to those most in need – those with terminal illnesses.  If you are aware of potential fraud being committed by a hospice provider or nursing home and would like to discuss this with an attorney that handles whistleblower cases, please contact us for a free consultation.  We handle whistleblower cases throughout the country.