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Vitas Healthcare to pay $75 million in False Claims Act case

Vitas Healthcare and its parent company Chemed Corporation have reached a record settlement in a federal False Claims Act case. Vitas and Chemed admit no wrongdoing but have agreed to settle the case for $75 million.

"Today's resolution represents the largest amount ever recovered under the False Claims Act from a provider of hospice services," said an acting assistant attorney general for the Department of Justice's Civil Division.

Vitas Healthcare, the nation's largest for-profit hospice care provider, runs hospice facilities in 14 states across the nation, including Connecticut, New Jersey and Pennsylvania.

The DOJ filed suit in 2013, claiming that Vitas knowingly billed Medicare for hospice services for patients who did not qualify because they were not terminally ill. It also alleged that the company submitted Medicare claims for home care services that were either unnecessary or were not provided at all.

Under Medicare, hospice care is available to terminally ill patients who elect to receive palliative treatment for their pain and stress rather than to continue curative treatment. To qualify, patients must have a life expectancy of six months or less, assuming the disease runs a normal course.

Between 2002 and 2013, the DOJ claims, Vitas provided hospice care to patients who were not considered terminally ill. This was allegedly done because employees were being rewarded with bonuses based on the number of patients receiving hospice care.

Medicare hospice providers can be reimbursed for any of four levels of care, including continuous home care services, which are reimbursed at the highest rate. To qualify for these services, patients must be suffering from acute symptoms for a limited period of time. The DOJ claims that Vitas pressured staff to increase continuous home claims regardless of their merit. The company also used aggressive marketing tactics to increase volume in this area.

Vitas's CEO told reporters that the case involved disagreements between physicians regarding whether certain patients were terminally ill.

"Healthcare providers who knowingly overbill our programs simply to increase their profits need to be put on notice that such conduct will not be tolerated," said a spokesperson for the Department of Health and Human Services in the Kansas City Region.

In addition to paying the $75 million, Vitas has also agreed to enter into a five-year corporate integrity agreement with the HHS Office of Inspector General.

This situation was brought to light via three whistleblower lawsuits. The DOJ intervened in those cases, and the settlement ends the agency's lawsuit and the whistleblower lawsuits. The amount of the whistleblowers' share in the settlement has yet to be determined.

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