Hospice Care Provider Pays Nearly $6 Million to Resolve False Claims Act Allegations

PHILADELPHIA - U.S. Attorney William M. McSwain announced today that SouthernCare, Inc., a hospice care provider, has agreed to pay $5,863,426 to the federal government to resolve allegations that the company violated the False Claims Act by submitting claims to Medicare for hospice care that was medically unnecessary or lacked documentation.

The settlement resolves allegations in two separate complaints filed in federal court in the Eastern District of Pennsylvania by whistleblowers under the qui tam provisions of the False Claims Act.  These provisions allow private citizens to bring civil actions on behalf of the United States and share in any recovery.  The whistleblowers, Dawn Hamrock and Patricia Beegle, will share approximately $1.1 million of the recovery between them.  Both whistleblowers were former employees of SouthernCare.

In their qui tam complaints, the whistleblowers generally alleged that SouthernCare provided hospice care to patients who were not eligible under the Medicare program.  To be eligible, hospice care must be reasonable and necessary, a physician must certify that the patient’s life expectancy is six months or less, and the provider must satisfy other documentation requirements.  The whistleblowers alleged that SouthernCare admitted patients into hospice who were not terminally ill and lacked appropriate medical documentation showing such an illness.  The company allegedly treated some patients for many years. This settlement agreement resolves the allegations arising from SouthernCare’s facilities in Pennsylvania from January 2009 through December 2014.

“My office takes whistleblower allegations very seriously, and we will hold accountable anyone who defrauds taxpayers,” said U.S. Attorney McSwain. “The False Claims Act gives us a powerful tool to do that.  We thank Ms. Hamrock and Ms. Beegle for playing a vital role in the resolution of this case.  Together with their lawyers, these two citizens provided essential assistance to the government.  Without the willingness of relators to shed light on allegations of fraud, preserving government program funds would be far more challenging.”

“Unnecessarily admitting people into hospice is particularly dangerous, as it can cause patients who are not terminally ill to stop seeking treatments for recovery,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.    “HHS-OIG will continue to work with the U.S. Attorney’s Office to ensure federally funded healthcare resources are used appropriately.”

There has been no determination of civil liability. The settled civil claims are allegations only.

This case was handled by Assistant United States Attorneys Michael S. Macko and Anthony D. Scicchitano, with investigative assistance from auditor George Niedzwicki and the U.S. Department of Health and Human Services Office of the Inspector General.