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Press Release

United States Settles False Claims Act Suit Against Good Shepherd Hospice Inc. and Related Entities

For Immediate Release
Office of Public Affairs

Midwest Hospice Chain Allegedly Billed Medicare for Ineligible Patients

Today, Good Shepherd Hospice Inc., Good Shepherd Hospice of Mid America Inc., Good Shepherd Hospice, Wichita, L.L.C., Good Shepherd Hospice, Springfield, L.L.C., and Good Shepherd Hospice – Dallas L.L.C. (collectively Good Shepherd) agreed to pay $4 million to resolve allegations that Good Shepherd submitted false claims for hospice patients who were not terminally ill.  Good Shepherd is a for-profit hospice headquartered in Oklahoma City which provides hospice services in Oklahoma, Missouri, Kansas and Texas.

“The Medicare hospice benefit is intended to provide comfort and care to patients nearing the end of life,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “We will continue to aggressively pursue companies that abuse the hospice benefit to improperly inflate their profits.”

The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from pain, symptoms or stress) for a terminal illness and have a life expectancy of six months or less if their illness runs its normal course.  When a Medicare patient receives hospice services, that individual is no longer entitled to Medicare coverage for care designed to cure his or her illness.

The government alleged that Good Shepherd knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill.  Specifically, the United States contended that Good Shepherd engaged in certain business practices that contributed to claims being submitted for patients who did not have a terminal prognosis of six months or less, by pressuring staff to meet admissions and census targets and paying bonuses to staff, including hospice marketers, admissions nurses and executive directors, based on the number of patients enrolled.  The United States further alleged that Good Shepherd hired medical directors based on their ability to refer patients, focusing particularly on medical directors with ties to nursing homes, which were seen as an easy source of patient referrals.  The United States also alleged that Good Shepherd failed to properly train staff on the hospice eligibility criteria. 

“Health care fraud puts profits above patients, and steals from taxpayers,” said U.S. Attorney Tammy Dickinson of the Western District of Missouri.  “In this case, company whistleblowers alleged that patients received unnecessary hospice care while Good Shepherd engaged in illicit business practices to enrich itself at the public’s expense.  Today’s settlement fairly resolves those issues and puts measures in place to prevent similar conduct in the future.”

In addition, as part of the settlement, each Good Shepherd entity agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG), which will provide for procedures and reviews to be put into place to avoid and promptly detect conduct similar to that which gave rise to the settlement. 

“Being a hospice provider in the Medicare program is a privilege, not a right,” said Special Agent in Charge Mike Fields of the HHS-OIG Dallas Region.  “Hospice providers that seek to boost profits by providing hospice services to Medicare beneficiaries who are not terminally ill compromise both the health of its patients as well as the integrity of Medicare.  Our agency will continue to hold such hospice providers accountable for their actions.”

The settlement resolves allegations filed by relators Kathi Cordingley and Tracy Jones, former employees of Good Shepherd, under the qui tam or whistleblower provisions of the False Claims Act, which authorize private parties to sue for fraud on behalf of the United States and share in the recovery.  The relators will receive approximately $680,000.

This suit is part of the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  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 this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Missouri and HHS-OIG.  The claims asserted against defendants are allegations only and there has been no determination of liability. 

The lawsuit is captioned United States ex rel. Cordingley and Jones v. Good Shepherd Hospice, Mid America, Inc., No. 4:11-cv-1087 (W.D. Mo.). 

Updated May 1, 2017

False Claims Act
Health Care Fraud
Press Release Number: 15-150