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Hospice of Arizona and Related Entities to Pay $12 Million To Resolve False Claims Act Allegations Filed in Maryland


Allegedly Submitted False Claims for Patients Who Did Not Have Terminal Prognosis

FOR IMMEDIATE RELEASE
March 20, 2013

Baltimore, Maryland – Hospice of Arizona, L.C., along with American Hospice Management, LLC, and their parent corporation, American Hospice Management Holdings, LLC, have agreed to pay $12 million to resolve allegations that they violated the False Claims Act by submitting or causing the submission of claims to the Medicare program for ineligible hospice services provided by Hospice of Arizona.

The settlement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division; and Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including Arizona.

The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from the symptoms, pain and stress of a serious illness) for a terminal illness, and have a life expectancy of six months or less if their disease runs its normal course. Today’s settlement resolves allegations that Hospice of Arizona and its related entities submitted or caused the submission of false Medicare claims between September 1, 2002 and December 31, 2010 for Hospice of Arizona patients that did not have a terminal prognosis of six months or less, or that did but were not eligible for the level of care billed.

The government alleges that Hospice of Arizona and its related entities engaged in certain practices that resulted in the submission of false claims, including pressuring staff to meet admissions and census targets, adopting procedures that delayed and discouraged discharges of ineligible patients, and failing to timely implement an adequate compliance program. As part of the settlement, American Hospice Management Holdings, LLC has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.

“The hospice industry relies on the Medicare Trust Fund, and payments for unnecessary services jeopardize its financial viability,” said U.S. Attorney Rod J. Rosenstein.

“This settlement is the result of the Justice Department’s efforts to prevent the misuse of the taxpayer-funded Medicare hospice program, which is intended to provide comfort and care to terminally ill persons in the final stages of their disease” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division.

“Medicare and taxpayers depend on hospice agencies to provide medically appropriate services to terminally ill patients,” said Glenn R. Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General’s region including Arizona. “When providers place more importance on the bottom line than on the care of these vulnerable patients, they can expect to face serious penalties.”

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 $10.2 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 over $14 billion.

The allegations settled today arose from a lawsuit filed by a former Hospice of Arizona employee under the qui tam, or whistleblower provisions, of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. The whistleblower in this case will receive $1.8 million. The case is United States ex rel. Momeyer v. Hospice of Arizona, L.C., et al., No. 1:10-cv-280 (D. Md.).

Hospice of Arizona, L.C., American Hospice Management, LLC, and American Hospice Management Holdings, LLC deny the allegations.

United States Attorney Rod J. Rosenstein commended the investigative work performed by the Department of Health and Human Services Office of the Inspector General. Mr. Rosenstein also thanked Assistant U.S. Attorney Roann Nichols and Christelle Klovers of the Department of Justice’s Civil Division, who handled the case for the government.


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