American Senior Communities Settles Hospice-Related FCA Case

​​​​Skilled nursing company American Senior Communities (ASC) has settled a False Claims Act case for nearly $5.6 million following reports by hospice employees who cared for their residents.

The U.S. Department of Justice alleged that the Indiana-based company billed Medicare separately for services that should have been covered by the hospice benefit. The hospice workers filed a qui tam complaint against ASC in the U. S. District Court for the Southern District of Indiana.

“Whistleblowers are critical to protecting public funds from fraud, waste, and abuse,” said U.S. Attorney Zachary A. Myers in a statement. “Health care providers who submit false claims or otherwise violate state and federal regulations when billing the United States Government will face consequences.”

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In a qui tam action, a whistleblower, called a“relator” by the courts, files a False Claims Act suit on behalf of the government and possibly receives a portion of any funds recovered by the government via the lawsuit, typically ranging from 15% to 25%.

In agreeing to the settlement terms, ASC denies all liability under the False Claims Act. Investigators from the U.S. Department of Health & Human Services Office of the Inspector General (OIG) did not uncover any evidence of injury or harm to patients because of the alleged conduct, according to the Justice Department.

Regulators, including the U.S. Centers for Medicare & Medicaid Services (CMS), have been looking more closely at health care organizations’ billing for services delivered to hospice patients.

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Medicare between 2010 and 2019 paid a total $6.6 billion to non-hospice providers for services provided to hospice beneficiaries, according to a February report from the OIG.

While hospices themselves do not bill Medicare for these non-hospice services, OIG recommended that CMS study whether hospice reimbursement reform is needed to address duplicate payments.

Medicare Conditions of Participation (CoPs) allow health care providers to receive payments for items or services that are considered unrelated to a hospice patient’s terminal illness and related conditions.

However, CMS has taken a longstanding position that virtually all the care needed by a terminally ill patient should be covered through the hospice benefit, and that payments outside the benefit should be “exceptional, unusual, and rare.”

CMS as of Oct. 2020 implemented new rules pertaining to relatedness.

Hospices must provide Medicare beneficiaries with a written statement called a “Patient Notification of Hospice Non-Covered Items, Services, and Drugs” detailing the treatments that are determined to be unrelated to their terminal illness and not covered by the hospice benefit.

The rule gives patients and families the right to request the notice when they elect the Medicare Hospice Benefit, and hospices must provide the addendum within 72 hours of the request.

“Health care providers that submit inappropriate claims to Medicare to boost their own profits compromise the integrity of this important federal health care program,” said OIG Special Agent in Charge Mario Pinto. “We will continue to work tirelessly, alongside our law enforcement partners, to ensure the appropriate use of taxpayer dollars and hold those who violate the law accountable.”

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