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Press Release

Hospice Facility and Its Manager/Majority Owner to Pay Approximately $5.86 Million to Resolve Continuous Home Care Hospice Fraud Allegations

For Immediate Release
U.S. Attorney's Office, Southern District of Mississippi

Jackson, Miss. - St. Joseph Hospice Entities, which consists of 13 hospice facilities in Mississippi, Louisiana, Texas and Alabama, and Patrick T. Mitchell, its majority owner and manager, have agreed to pay the United States $5,867,518 under the False Claims Act to resolve allegations that they submitted false claims for delivery of continuous home care hospice services to patients who were not entitled to receive continuous care hospice level treatment, announced United States Attorney Gregory K. Davis, Special Agent in Charge Derrick L. Jackson with the U.S. Department of Health and Human Services - Office of Inspector General, and FBI Special Agent in Charge Donald Alway.

Continuous home care hospice services, sometimes called crisis care services, are provided to hospice-eligible patients in moments of crisis resulting from acute medical symptoms. This level of care is available to a patient when the patient’s acute medical symptoms require immediate and short-term skilled nursing services, allowing the patient to remain in his/her home during a very difficult time. Medicare pays for continuous care hospice services at a rate that is nearly 6 times that of the daily rate for routine home hospice care. The continuous home care reimbursement rate is the highest daily rate a hospice can bill Medicare. Because continuous home care hospice services are limited to moments of crisis and have stringent criteria, they are rarely used.

During the government’s investigation, it was discovered that St. Joseph Hospice was an outlier in its use and billing of continuous care hospice services. The government found that there were a significant number of patients who received continuous care hospice services when there was no crisis, and thus, they were not eligible for such services. The result of this misuse of the continuous home care hospice benefit was millions of dollars of false claims submitted to and paid by the government.

"While the government finds it necessary to provide this very important benefit to its citizens during a time of crisis, it is sometimes the case that companies and/or individuals will abuse the provision of this service through aggressive marketing practices, thrusting patients into services they really do not need in order to increase the company’s reimbursement rate and its bottom line," said United States Attorney Gregory K. Davis. "We will continue to investigate and root out this and other types of healthcare fraud. This is a very important aspect of the work we do, particularly given that healthcare fraud costs taxpayers tens of billions of dollars a year." In addition to saving taxpayer dollars, the United States Attorney believes that such efforts will be important in continuing to stem the tide of rising health care costs.

"St. Joseph Hospice Entities allegedly maxed out Medicare’s hospice benefit to make as much profit as possible," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The Office of Inspector General will continue to work aggressively to eliminate this type of greed in our health care system."

"This type of fraud steals from government programs designed to assist deserving patients," stated Donald Alway, Special Agent in Charge of the FBI in Mississippi. "Our success in this case is an excellent example of the effectiveness of collaboration between federal agencies, and evidence of our commitment to protect the American taxpayer and the integrity of our federal assistance programs."

The allegations in this case arose from a lawsuit filed by 3 whistleblowers, who were former employees of the company, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. Such private citizens are referred to as relators. The relators in this case will receive a little more than $1 million from the recovery announced today. The case is styled as United States v. St. Joseph Hospice, et al., Case No. 1:12cv393 (S.D. Miss.).

The investigation and settlement were the result of a coordinated effort among the Office of the United States Attorney for the Southern District of Mississippi, the Federal Bureau of Investigation and the U.S. Department of Health and Human Services - Office of Inspector General. The United States was represented by Assistant United States Attorney Angela Givens Williams.

In addition to the payment of the settlement amount, St. Joseph Hospice Entities has agreed to submit to ongoing monitoring by HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.

Updated September 3, 2015