How Unscrupulous Hospice Operators Are Stealing Millions From Medicare
Policy + Politics

How Unscrupulous Hospice Operators Are Stealing Millions From Medicare


In the latest in a flurry of high-profile Medicare and Medicaid fraud cases, one of the nation’s largest skilled nursing, senior living and rehabilitation providers has agreed to pay the federal government $53.6 million to settle a half dozen lawsuits charging that some of its facilities submitted false Medicare claims for unnecessary or never delivered services and provided grossly substandard nursing care.

The Pennsylvania-based mega company, Genesis Healthcare, and many of its subsidiaries were held responsible for a panoply of dirty tricks to bilk the government’s health care programs for seniors and the poor. Those included billing Medicare for hospice services for patients who were not terminally ill and therefore ineligible for end-of- life care, the Department of Justice announced  last Friday.

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Hospice care is available under Medicare to the most vulnerable of patients -- usually desperately ill people with only six months to live. The government spent $15.1 billion alone in 2013 to provide the service to roughly 1.3 million patients. Under federal rules, the patient or a guardian must sign an election statement accepting the hospice care, and the attending physician must certify that the patient is terminally ill and beyond a cure.

Between April 2010 and March 2013, Genesis’s Creekside Hospice facility in Las Vegas and two other skilled nursing facilities knowingly submitted false claims to Medicare for hospice services for patients who were not terminally ill. They also billed the government for bogus physician evaluation management services, according to one of the six lawsuits brought against the company.

This appears to be part of a pattern. The Office of Inspector General of the Department of Health and Human Services reported last September that some unscrupulous hospice operators, doctors and staff were aggressively recruiting patients for their programs to maximize profits – even when in some cases the patients shouldn’t be in hospice. The improper and fraudulent activities amounted to hundreds of millions of dollars.

"It's disturbing when healthcare companies bill Medicare and Medicaid to care for vulnerable patients, but provide grossly substandard care and medically unnecessary services just to boost company profits," Steven Ryan, special agent in charge for the Department of Health and Human Services’ Office of Inspector General, said in a statement.

Related: Doctors and Nurses Charged in Massive $900 Million Medicare Fraud

Genesis, with more than 500 skilled-nursing facilities in 34 states, got into trouble after purchasing a number of post-acute care providers during the past several years that had been engaging in dubious practices long before the acquisitions. Besides the hospice scam, the company’s Skilled Healthcare subsidiaries provided therapy to some patients longer than necessary or billed Medicare, Medicaid and the military health program TRICARE for more therapy than patients received, according to the Justice Department.

One of Genesis’ companies also submitted false claims to Medicare and California’s MediCal program for nursing home services that were grossly substandard or “worthless” and were ineligible for payment.

Former President Barack Obama made cracking down on Medicare and Medicaid fraud a high priority in his second term. That resulted in federal and state law enforcement agencies stepping up their efforts and making a series of high-profile arrests and prosecutions. Last summer, the Obama administration told Congress that it had prevented $42 billion of improper payments to doctors and other medical providers in fiscal 2013 and 2014 by using more sophisticated detection methods and more aggressive law enforcement.

Related: Audit Uncovers $124.7 B of Overpayments and Fraud in Medicare and Medicaid

During the past two and a half months, the Justice Department and the FBI made 60 announcements of arrests, convictions, settlements and prison sentences stemming from investigations of efforts to defraud Medicare and Medicaid.

On June 13, for instance, Kathleen Kelly-Tuorila, the office manager and medical biller for a Del Rio, Texas, medical supply company, was sentenced to 17 years in prison for her role in improperly billing Medicare and Medicaid for $3.5 million worth of powered wheelchairs and scooters.

Court testimony reveals Kelly-Tuorila and her boss used names of physicians to support claims for reimbursement “when the named physician never prescribed a powered wheelchair for the customer and, in some instances, did not even know the customer, and had never had them as a patient.”

Related: Crackdown on Medicare Fraud Is Producing Some Impressive Results  

On the same June day, Wilbert James Veasey Jr. of Dallas was sentenced to 210 months in federal prison and ordered along with two others to pay a total of $23.6 million in restitution to Medicare and Medicaid. The three were charged with improperly recruiting individuals with Medicare coverage to sign up for Medicare home health care services. In some cases, homeless people living in shelters were recruited for the scam and paid $50 to take part.

On May 19, Wyoming psychologist Gibson Condie was indicted on 234 counts of health care fraud involving about $6.8 million of fraudulent bills that were submitted to Wyoming Medicaid.

Federal prosecutors charged that Condie’s Big Horn Basin Mental Health Group routinely reported “an inappropriate and baseless mental health diagnosis,” sometimes for patients he never treated.