On July 8, 2020, the United States Attorney’s Office for the Middle District of Florida announced that Hope Hospice agreed to pay $3.2 million to resolve a qui tam whistleblower action under the federal False Claims Act (FCA). The settlement resolved allegations that Hope Hospice knowingly submitted false claims to Medicare for hospice services for patients who were not terminally ill. The Hope Hospice settlement is the latest in a string of hospice-related settlements this year, including two settlements in March 2020—one with STG Healthcare for $1.75 million, and one with AseraCare for $1 million.  Hospice-related investigations typically focus on the following areas: the compensation paid by the hospice provider to medical directors; gifts to referral sources; and admission criteria.

As for compensation paid to medical directors, hospice providers should ensure that any such compensation arrangement fits within an Anti-Kickback Statute (AKS) safe harbor.  The most common safe harbor for hospice providers to avail themselves of is the personal services and management contracts safe harbor, which requires, among other things, that the arrangement be set out in writing, signed by the parties, be for a term of at least one year, and that the compensation paid to the medical director be set in advance, consistent with fair market value, and not determined in a manner that takes into account the volume or value of any federal healthcare program referrals or business.

Hospice providers should also ensure that gifts or other remuneration to referral sources do not run afoul of AKS regulations. While there is no de minimis exception to the AKS, the OIG has generally taken the position that “nominal” gifts do not cause concern under the AKS. Although the OIG has not defined “nominal” for purposes of the AKS and, therefore, any gift to a referral source or potential referral source could potentially implicate the AKS, things such as modest lunches or marketing trinkets such as pens, coffee mugs, or paper weights, are not likely to garner serious AKS scrutiny.

Finally, hospice providers should ensure that their admissions criteria satisfies the Medicare hospice eligibility requirements, which require that an individual must be certified as being “terminally ill,” meaning that the individual’s life expectancy is 6 months or less “if the illness runs its normal course.

The attorneys at Chilivis Grubman represent healthcare providers of all types and sizes, including hospice providers, in connection with government investigations and False Claims Act litigation.  If you need assistance with such a matter, please contact us today.