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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Oklahoma

Wednesday, November 19, 2014

Hospice Company Owner Found Guilty Of Committing Medicare Fraud, Conspiracy, Obstruction Of Federal Audit, And Making False Statements

Oklahoma City, Oklahoma – A federal jury in Oklahoma City found PAULA KLUDING, 39, from Chandler, Oklahoma, the owner of Prairie View Hospice, Inc., an Oklahoma corporation located in Chandler, guilty on 39 separate counts relating to Medicare fraud, conspiracy, obstruction of a federal audit, and making false statements in health care matter, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

PATRICIA CARTER, 43, from Tecumseh, Oklahoma, was the general manager of Prairie View Hospice and was indicted along with Kluding in this case. Carter pled guilty on November 3, 2014, to one count of obstruction of a federal audit and testified at the trial.

According to evidence presented at trial, Prairie View Hospice was in business to provide hospice care to Medicare beneficiaries. Hospice care consists of providing health care, medication, medical equipment, and other goods and services to terminally ill patients. From July of 2010 through July of 2013, Kluding conspired with others to conceal the true medical condition of Prairie View Hospice’s patients and the true quality and quantity of health care services they were receiving in order to “pass” a Medicare audit and to fraudulently obtain money from Medicare. Specifically, certain medical documents were falsified to make it appear that nurses had visited patients or conducted necessary assessments when such visits and assessments had not, in fact, been made. Nursing notes were also falsified to make it appear that patients were in worse health than they actually were in order to justify to Medicare the patient’s continued hospice care. In addition, Prairie View Hospice, acting through Kluding, sent the falsified documents to a Medicare subcontractor in response to requests to audit patient files and in support of claims for Medicare reimbursement.

The trial lasted for four and half days and the jury deliberated about six hours before returning a guilty verdict on all counts.

At sentencing, Kluding faces up to 5 years imprisonment and a fine of $250,000 on each count, as well as paying restitution to the government. Carter faces 5 years imprisonment and a fine of $250,000. The government also seeks forfeiture of all proceeds obtained by Kluding from the criminal acts. Sentencing will take place in approximately 90 days.

This case is the result of an investigation by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Jessica Perry.

Updated December 15, 2014