In recent years, Gentiva Health Services, the successor to Kindred at Home, one of the country’s largest hospice providers, agreed to pay $19.428 million to resolve allegations spanning multiple states and a decade of alleged misconduct. The settlement resolved allegations that, from 2010 until February 2020, Kindred and related entities knowingly submitted false claims for hospice services provided to patients who were not terminally ill and then concealed or avoided their obligation to repay those claims.
The settlement covered hospice locations operating under the names Avalon, Kindred, SouthernCare, and SouthernCare New Beacon, across facilities in Tennessee, Rhode Island, Texas, Missouri, Alabama, Indiana, and Ohio.
The case was not brought by regulators who stumbled across a billing anomaly. It resolved claims in nine lawsuits brought under the qui tam provisions of the False Claims Act by current and former Kindred employees. The people closest to what was happening inside those hospices were the ones who took it to court.
What is Hospice Care and What Does the Law Require?
Hospice is end-of-life care designed for patients who have chosen comfort over cure. Rather than pursuing aggressive treatment for a terminal illness, hospice patients receive palliative care: pain management, symptom relief, and support for their families during a difficult time.
Medicare patients are considered terminally ill and hospice-eligible when they have a life expectancy of six months or less if their illness runs its normal course. To admit a patient to Medicare-covered hospice, a physician must certify that this standard is met. That certification is the legal foundation for every claim submitted to the government.
When a patient certified as terminal lives for months or years beyond that projection without any change in their underlying condition, the certification was likely false, and every claim submitted on that patient’s behalf was a false claim under federal law.
The fraud usually involves the following:
- A hospice provider enrolls patients who are not dying
- It collects daily reimbursements from Medicare that can run to hundreds of dollars per patient
- It continues billing for months or years
Each day billed generates a new false claim, each false claim carries civil penalties, and the government can recover up to three times the amount it wrongfully paid.
How Hospice Fraud Schemes Operate
Hospice fraud rarely happens by accident. The patterns that appear across DOJ enforcement actions are consistent enough to reflect deliberate business practices.
In the Good Shepherd Hospice case, which settled for $4 million, the government alleged that the company pressured staff to meet admissions and census targets and paid bonuses to hospice marketers, admissions nurses, and executive directors based on the number of patients enrolled. The government further alleged that Good Shepherd hired medical directors based on their ability to refer patients, focusing particularly on medical directors with ties to nursing homes, which were seen as an easy source of referrals.
In the Saad Healthcare case, which settled for $3 million, the government alleged that between 2013 and 2020, Saad submitted false claims to Medicare for 21 patients who did not meet the eligibility requirements for the Medicare hospice benefit, despite knowing those patients were ineligible. Two former employees filed the qui tam lawsuit that put the case in motion.
In the Gentiva/Kindred settlement, the Anti-Kickback Statute added another dimension. The settlement resolved allegations that SouthernCare New Beacon paid remuneration to a consulting physician between 2016 and 2022 to induce hospice referrals of Medicare beneficiaries to its Gadsden, Alabama, location.
Paying for referrals, whether to physicians, recruiters, or patient marketers, violates federal law regardless of whether the underlying patient qualifies for hospice. When the patient does not qualify, the referral payment and the resulting false claims compound the legal exposure.
The Harm Goes Beyond Wasted Taxpayer Dollars
Because hospice care is palliative rather than curative, this fraud shortchanges both patients and taxpayers. Taxpayers are charged for care that the program was never meant to cover, and patients can be denied potentially life-saving treatments if they have been falsely deemed terminally ill, because Medicare does not cover curative treatments for beneficiaries who have elected the hospice benefit.
A patient enrolled in hospice under a false certification may not even know they are enrolled, or may not understand what it means for their coverage. In some prosecuted cases, patients themselves testified that they were never told they had been placed on hospice. The financial harm to the government is also real: those resources represent care that genuinely eligible patients and their families cannot receive.
Who Can Report Hospice Fraud?
The employees who see hospice fraud most clearly are often the ones whose jobs depend on the practices they observe:
- Admission coordinators given enrollment targets
- Nurses who document patients who do not meet terminal criteria
- Billing staff processing claims for patients discharged alive after years in hospice
- Medical directors or providers pressured to certify patients they have never examined
Any of these individuals may have the direct, personal knowledge that forms the basis of a False Claims Act qui tam lawsuit. When a qui tam action is successful, the whistleblower may be eligible to receive a percentage of the government’s recovery.
Contact a Whistleblower Attorney
If you work in hospice care and have witnessed patients enrolled who do not meet Medicare’s terminal illness criteria, billing submitted for ineligible patients, or payments made to physicians or marketers in exchange for referrals, you may be in a position to file a qui tam lawsuit. These cases are fact-intensive, and the filing requirements are specific, so working with a whistleblower attorney before taking any action protects both your claim and your legal rights.
Contact Keller Grover today to speak with a whistleblower attorney about what you have seen. Our team handles False Claims Act cases and can walk you through your options before you make any other moves.