The Knoxville-based, for-profit hospice chain says it disputes the allegations brought out in a whistleblower lawsuit, but settled the case to avoid costly litigation.
Caris Healthcare, LLC will pay $8.5 million to settle false claims allegations that it knowingly kept overpayments for patients who were ineligible for Medicare hospital benefits because they were not terminally ill, the Department of Justice said.
A federal complaint alleged that the Knoxville-based, for-profit hospice chain admitted patients whose medical records showed did not have terminal illness as part of an effort to meet the aggressive admissions and census targets set by the company.
The complaint also alleged that Caris' leadership was made aware of the overpayments, but ignored internal audits and warnings from staff.
"Caris not only continued to submit hospice claims to Medicare for the patients, but also took no meaningful action to determine whether it had previously received improper payments for these and other patients that should have been returned to Medicare," DOJ said.
"Today's settlement is an important reminder that compliance programs and activities cannot exist in name only," Acting Assistant Attorney General Chad A. Readler of DOJ's Civil Division said in a media release.
"When a healthcare provider is put on notice that a patient is ineligible for a particular Medicare benefit or service, the healthcare provider cannot turn a blind eye to that information but, instead, must take reasonable steps to stop the improper conduct and to determine whether that conduct resulted in prior overpayments," Readler said.
Caris, which operates 28 offices in Tennessee, Virginia, Missouri, South Carolina and Georgia, disputed the allegations brought out in a whistleblower lawsuit, but settled the case to avoid costly litigation.
"In recent years, litigation involving hospice providers has increasingly focused on the eligibility of patients to receive hospice services and often amounts to a second-guessing of the care provided to those patients, years after the fact," Caris said in a statement to the media.
"The settlement of the lawsuit brought under the False Claims Act (FCA) resolves these very sorts of allegations regarding care provided by Caris to a small fraction of patients between 2010 and 2013."
Caris Healthcare founder and board member Norman McRae said the hospice provider "has the utmost confidence in its processes for determining patient eligibility for hospice and in the clinical judgment of those within our company on the frontlines of providing care to our patients."
The settlement resolves allegations filed in a whistleblower lawsuit by a registered nurse who was a former employee at Caris Healthcare. The whistleblower will get $1.4 million of the settlement.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.