Curo Health Services: The Pressure to Keep Patients on Hospice

The Curo Health Services hospice settlement announced in 2017 committed Curo and the Hospice Plus businesses to pay $12.21 million over alleged patient-referral kickbacks. Separate claims against Avalon later put management’s instructions at the center of the case: pressure to admit patients, incomplete information reaching physicians, and payments kept after internal warnings. These hospice fraud cases connect decisions in the corporate office with what nurses, marketers and billing staff saw in their daily work.

Hospice Plus and the Referral Payments

Curo’s Hospice Plus settlement covered alleged payments for access to patients in and around Dallas. The Department of Justice’s April 2017 announcement named Curo and its Hospice Plus business.

The government described two alleged hospice referral kickback schemes. In one, the hospices allegedly paid American Physician Housecalls for referrals through sham loans, a free ownership interest in another business, stock dividends and free rental space. In the other, doctors, nurses, hospitals and long-term care facilities allegedly received cash, gift cards and other valuable items for referrals.

The resulting claims went to Medicare and Texas Medicaid. In the government’s account, the referral payments made those claims false.

The whistleblower complaint describes the smaller transactions inside that business. It alleges that a marketer offered a free power-lift chair to induce a patient to choose Hospice Plus over another agency. A part-time marketer allegedly received a $30,000 annual salary and a $250 bonus for each patient referral. The complaint also describes cash delivered for referrals and bonuses tied to a monthly referral target.

An offer to facilities made the exchange particularly clear:

A competing hospice offering care on its merits has to compete with free staffing as well.

SouthernCare’s Separate Pennsylvania Settlement

SouthernCare’s Pennsylvania case concerned allegedly unnecessary or undocumented hospice care, with its own payment and whistleblowers. On December 13, 2018, the Department of Justice announced a $5,863,426 settlement over claims from January 2009 through December 2014. The government alleged that SouthernCare admitted patients who were not terminally ill, lacked appropriate documentation and kept some patients in hospice for years.

Two former SouthernCare employees brought the cases and were to share approximately $1.1 million from the recovery.

The Curo and Avalon Census Allegations

The United States and Tennessee alleged that Curo and Avalon pressed staff to maximize admissions and census while discouraging discharge of patients who no longer qualified for hospice. Their June 1, 2021 complaint announcement named Curo and its Avalon Hospice business.

Whistleblowers brought the underlying cases, and the governments joined them. Financial targets and incentives allegedly pushed staff to grow the census while physicians making the required certifications and recertifications failed to receive or adequately consider complete, accurate information about patients’ conditions.

That information is central to hospice eligibility. Medicare requires a physician’s prognosis of six months or less if the illness runs its normal course. The benefit runs through two 90-day periods followed by renewable 60-day periods, with certification required for each. The repeated decision is whether the patient’s condition supports continued hospice care.

Hospice payment gives those decisions a financial consequence. Medicare pays for each enrolled day, including days without a visit. Costs tend to be higher at admission and near death, with less costly care between those points. A larger census and longer stays can therefore mean more revenue without a matching increase in work. The government alleged that Curo billed taxpayers for end-of-life health care for patients who were not terminally ill.

The HHS Office of Inspector General examined the incentive in its January 2015 study, Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities. Using Medicare hospice claims from 2007 through 2012, it found longer care and higher payments for beneficiaries in assisted living than in other settings. Those beneficiaries also often had diagnoses requiring less complex care.

That is the industry incentive behind the census. The Curo allegations concerned how management pursued it through admissions, physician information and discharge decisions.

A Medical Director’s Login Without His Review

The whistleblowers’ second amended complaint alleged that staff used the medical director’s login to sign terminal-illness certifications without his review. Two Avalon case managers brought it.

When the Patient Showed No Decline

The same complaint alleged that an operations director instructed a case manager to use the same designation for every Alzheimer’s patient. The case manager questioned whether a patient who remained alert, oriented and able to walk belonged in hospice. When she raised concerns about patients showing no health decline, the complaint describes a direction to increase documentation.

A patient allegedly showed no decline from Alzheimer’s disease, after which a nurse practitioner changed the diagnosis in face-to-face notes to COPD and directed the case manager to document it that way. The complaint alleged that the nurse practitioner failed to write an order formally changing the diagnosis in the medical chart. The mismatch later surfaced in a chart audit.

The complaint also described notes prepared in the names of absent nurses:

The same filing alleged backdated admission and discharge elections, and patients induced to leave hospice before expensive hospital visits so the hospice could shift those costs. It also alleged prescription drugs collected from patients’ homes and redistributed to other patients, and in-kind services to facilities used as kickbacks.

For hospice billing, the connection is concrete: the patient’s condition, the certification, the care documented and the claim have to tell the same story. In this complaint, staff described decisions that allegedly made those accounts diverge.

Internal Warnings and Money Kept

The government’s Curo complaint alleged that internal complaints and audits identified ineligible patients, yet the defendants kept the Medicare and Medicaid payments. That puts the management response alongside the original admission: what the company learned, who learned it and what happened to the money afterward.

A similar allegation appeared in the Caris Healthcare settlement. The government alleged that Caris continued billing after internal audits, its chief medical officer and nurses raised eligibility concerns, and took no meaningful action to identify earlier overpayments. The repeated pattern is a warning inside the business followed by a decision to leave payments in place. An audit employee or finance manager can know that part of the story even without making the original clinical assessment.

The Gentiva Resolution and Avalon’s Share

The later Gentiva resolution settled claims across a group of hospice businesses for $19,428,570. The signed settlement agreement, announced in July 2024, included Curo and Gentiva. It allocated $5,551,200 of the federal settlement to the Avalon Nashville and Chattanooga eligibility and retained-overpayment allegations covering January 1, 2010 through February 20, 2020.

The agreement also covered eligibility and retained-payment allegations at SouthernCare in Daphne and Mobile, Alabama, along with its South Bend, Indiana, and Youngstown, Ohio, locations. SouthernCare New Beacon in Demopolis, Alabama, and Kindred locations in Warwick, Rhode Island, Beaumont, Texas, and Independence, Missouri, were also included.

At SouthernCare New Beacon in Gadsden, Alabama, the government alleged a different mechanism: physician consulting payments intended to induce Medicare referrals. New Beacon had disclosed that arrangement to HHS-OIG. The shared settlement reached both who qualified for hospice and how patients were sent there.

The ownership history explains the changing names. In an April 2018 announcement filed with the SEC, Humana, TPG Capital and Welsh, Carson, Anderson & Stowe announced an agreement to acquire Curo for approximately $1.4 billion. Curo later joined Kindred at Home. Some of the settling businesses subsequently became part of Gentiva.

For someone inside the company, the provider name on a claim can be more useful than the brand on the building. The Avalon portion of this agreement follows identified Nashville and Chattanooga provider numbers and the claims billed through them.

What Evidence Is Needed to Prove Fraud?

The useful records connect what management knew to what the hospice billed. In the Curo cases, that means linking patient condition and physician review to management instructions, claims and retained payments. The allegations point to certifications, medical-director access, nursing notes, chart audits, census incentives, referral arrangements and the response to internal warnings. Each shows a different decision inside the hospice.

A healthcare worker may know which observations disappeared from a chart. A marketer may know what a facility received for referrals. A corporate employee may know that an audit reached management while payments stayed on the books. Our work with hospice fraud whistleblowers connects that inside knowledge to the company decisions and government payments it can explain. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw the Instructions Behind the Census

If you saw admissions targets override patient assessments or audit warnings leave payments untouched, talk with our whistleblower experts about what happened inside your hospice. We build the case with you and bring in hospice fraud whistleblower lawyers who understand eligibility, referrals and retained overpayments. We stay beside you as the evidence from your daily work becomes a case for recovering the government’s money.