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Department of Justice
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Thursday, June 18, 2015

Covenant Hospice Inc. to Pay $10.1 Million for Overcharging Medicare, Tricare and Medicaid for Hospice Services

On June 18, Covenant Hospice Inc. agreed to pay $10,149,374 to reimburse the government for alleged overbilling of Medicare, Tricare and Medicaid for hospice services, the Department of Justice announced today.  Covenant Hospice Inc. is a non-profit hospice care provider which operates in Southern Alabama and the Florida Panhandle. 

“The hospice benefits provided by federal health care programs are intended to provide comfort and care to patients nearing the end of life,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to ensure that these benefits are used for their intended purposes.”

The Medicare, Tricare and Medicaid hospice benefits are available for patients who have a life expectancy of six months or less if their disease runs its normal course.  Patients admitted to a hospice stop receiving care to cure their illnesses and instead receive medical care focused on providing them with relief from the symptoms, pain and stress of a terminal illness.

Medicare, Tricare and Alabama and Florida Medicaid reimburse for four different levels of hospice care: routine home care, continuous home care, inpatient respite care and general inpatient care.  The routine home care level is the lowest reimbursement rate and the highest reimbursement rate paid by the federal health care programs is for general inpatient care.  The level of care provided to a patient is subject to change based upon a variety of factors, including the patient’s condition and needs, and the availability of family members or other caregivers to meet those needs.  The reimbursement for general inpatient care is greater than that provided for routine home care based upon the expectation that patients requiring the former level of care have more acute medical and psychosocial needs that must be provided in an inpatient setting and are more costly to treat.  It is the responsibility of the hospice provider to ensure that a patient’s medical record contains the appropriate documentation to support the level of hospice care that is billed. 

“Careful and correct claims for reimbursement from critical federal health care programs are essential to the health of our economy,” said U.S. Attorney Pamela C. Marsh of the Northern District of Florida.  “Those public servants who worked hard to investigate the conduct and obtain this settlement deserve our deepest gratitude.  We will continue our efforts to ensure that federal dollars intended for compassionate care and legitimate patient needs are protected.”

Today’s settlement resolves allegations that between Jan. 1, 2009, and Dec. 31, 2010, Covenant Hospice Inc. improperly submitted hospice claims for general inpatient care that should have been billed at the routine home care level for Medicare, Tricare and Medicaid patients.  The government alleged that Covenant Hospice Inc.’s medical records did not support the medical necessity of the general inpatient care.

The federal government will recover $9,597,118.44 for Covenant Hospice Inc.’s overbilling to Medicare, Tricare and Medicaid, and Alabama and Florida will collectively recover $552,255.56 as a result of overbilling of their respective Medicaid programs.  The Medicaid program is jointly funded by the federal and state governments. 

This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Northern District of Florida, the Department of Health and Human Services’ Office of the Inspector General, the Defense Health Agency of the U.S. Department of Defense, the Alabama Attorney General’s Office and the Florida Attorney General’s Office.

Updated June 25, 2015