Record settlement reached with Vitas hospice Post scrutinized

Federal officials announced late Monday a $75 million settlement with South Florida-based hospice provider Vitas, calling it the biggest ever in the industry under the False Claims Act to settle charges the company inflated charges and overbilled taxpayers.

“Today’s resolution represents the largest amount ever recovered under the False Claims Act from a provider of hospice services,” said Acting Assistant Attorney General Chad A. Readler of the U.S. Justice Department’s civil division.  “Medicare’s hospice benefit provides critical services to some of the most vulnerable Medicare patients, and the Department will continue to ensure that this valuable benefit is used to assist those who need it, and not as an opportunity to line the pockets of those who seek to abuse it.”

In 2012, The Palm Beach Post reported for-profit Vitas, based in Miami, billed the government for patient stays in Palm Beach County that averaged 40 percent longer than those of non-profit competitors. The newspaper also showed hospice services were being marketed at assisted-living facilities as a service for people who might not necessarily die — or even get better — though federal law required a diagnosis of six months or less to live.

A year later, the Justice Department filed a 51-page complaint under the False Claims Act alleging Vitas bilked Medicare in South Florida and elsewhere by charging for people who were not terminally ill and sending “crisis care” bills for patients that nurses said were at church, bingo or the beauty parlor.

The settlement with Vitas and parent company Chemed Corp. also resolves three lawsuits filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.

The settled claims represent allegations only, with no determination of liability, officials said.

Attempts to seek comment from Vitas officials were not immediately successful.

Three decades after becoming a Medicare benefit, hospice care had emerged as its fastest-growing cost at more than $15 billion annually by 2014, The Post reported.

Hospice care was designed to provide pain control and other “palliative” care for those diagnosed with terminal illness, with the idea of making them as comfortable and peaceful as possible if they chose not to pursue costly or painful last-ditch attempts to cure a disease. A hospice can refer to a building, though most patients receive care in their homes or in nursing or assisted-living facilities.

At first, nearly all hospice providers were non-profit organizations, but over time, for-profit companies like Vitas assumed a majority share of the market.

In one memo, according to the government, a Vitas vice president interrogated a Texas employee about a decreasing number of patients in “crisis care” — which can cost the government $742 more per day than standard home care.

“Would you give me your thoughts on what caused this drop and what will you be doing to correct in January?” the memo said, according to the complaint. “I will need this analysis by the end of the day today.”

Update: Vitas CEO Nick Westfall offered a statement Tuesday:

“After fully cooperating with the Department of Justice (DOJ) and defending ourselves vigorously against the allegations, VITAS Healthcare confirms it settled the investigation without any admission of wrongdoing.  This civil litigation concerned professional disagreement between physicians in reaching a terminal prognosis as well as physician judgment in determining appropriate levels of care.  This settlement is made in compromise of disputed claims covering slightly less than eleven years of care provided to patients from July 24th, 2002, through May 2nd, 2013, and maintains VITAS’ disagreement with the DOJ’s claims.

“We’ve elected to settle the civil litigation without any admission of wrongdoing to avoid the cost and uncertainty of protracted litigation. We continue with our commitment, since the inception of the hospice benefit, to provide a comprehensive offering of compassionate, high-quality care to patients and families across the country.”

Update 2:  In a telephone interview  with The Palm Beach Post Tuesday, Chemed CEO Kevin McNamara said the $75 million settlement over a decade of billings should be  kept in perspective with more than $1 billion in annual revenues at the nation’s largest hospice provider.

The company’s focus remains “to do what’s best for the patient,” he said.

Nationally, Vitas’s average length of patient stay is about 83 days, below the national average of 87 days,  he said.

He said the Texas memo refers to a decreasing profit margin in crisis or continuous care, as opposed to numbers of patients. In Florida, the difference in costs can be more than $500 a day, he said.

 

 

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