Hospice Provider Odyssey Healthcare Agrees to Pay $25 Million to Resolve False Claims Act Allegations

Odyssey HealthCare, a subsidiary of Gentiva, has agreed to pay $25 million to resolve civil liability under the federal False Claims Act arising from its billing of claims for certain hospice services, the Justice Department announced today. Odyssey Healthcare currently provides hospice services in approximately 27 states, including Wisconsin. Odyssey was purchased by Gentiva Healthcare in 2010.

The Medicare hospice benefit is available for patients who elect palliative treatment for a terminal illness. Patients are eligible for palliative hospice care if they have a terminal diagnosis of six months or less if their disease runs its normal course. The majority of hospice services are billed at the routine care level. Medicare also pays for higher levels of care, including continuous home care. Continuous care is available when the patient is experiencing an acute crisis and his or her symptoms can only be controlled at home through the provision of skilled nursing services. The reimbursement rate for continuous care services is the highest rate available to a hospice and several hundred dollars a day more than the amount paid for routine services. Today’s settlement resolves allegations that Odyssey submitted false claims to the Medicare program for continuous home care services that were unnecessary or that were not performed in accordance with Medicare requirements between January 2006 and January 2009.

“The resolution of the related cases announced today underscores two, critically important components of our focused and effective work in addressing health care fraud,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “First, it shows our abiding commitment to the legitimate medical and the financial interests of all of our constituents who are rightly interested in the sound, lawful administration of the Medicare Program. Second, it illustrates our strong support of the qui tam or “whistleblower” process through which private individuals–often employees of offending health care providers–courageously come forward to report on waste, fraud, and abuse in the handling of taxpayer monies and beneficial programs.”

“The federal government pays for the hospice care of Medicare patients to make them more comfortable during the last months of their lives. Yet it is alleged that Odyssey used a diagnosis of terminal illness as an opportunity to bill taxpayers for unnecessary services,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “The size of the settlement shows how seriously the government views Odyssey’s unlawful behavior, and the five-year Corporate Integrity Agreement will help assure that such fraud is not repeated.”

Allegations that Odyssey improperly billed for continuous care services were originally raised in three lawsuits filed against Odyssey under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. As a part of today’s resolution, the whistleblowers, all former employees of Odyssey, will receive payments totaling more than $4.6 million.

In addition to the $25 million payment, Odyssey entered a five year corporate integrity agreement with the United States Department of Health and Human Services Office of the Inspector General.

This matter was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Wisconsin, and the Office of the Inspector General for the Department of Health and Human Services.

The cases resolved by today’s settlement are United States ex rel. Rouse et al. v. Odyssey Health Care, Inc. (Case No. 08-C-0383, E.D. Wisc.); U.S. ex rel. Dingus v. Odyssey Health Care, Inc., (Case No. 09-C-0254, E.D. Wisc.); and U.S. ex rel. Smithwick v. Odyssey Health Care, Inc., (Case No. No. 09-C-1851, E.D. Wisc.) (Consolidated cases).

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.6 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $8.8 billion.

The claims contained in the complaints against Odyssey are merely allegations and do not constitute an admission of liability.