Kindred Hospice: The Patients on the Rolls and the Money Kept

In the Kindred Hospice settlement, Gentiva agreed to pay $19,428,570 to resolve allegations of billing for ineligible hospice patients and keeping the resulting overpayments. For an employee who questioned an admission, recommended a discharge or raised an audit finding, the second allegation matters: what did the company do about money it had already received? The government alleged that taxpayer money intended for terminally ill patients paid for hospice care for people who did not qualify.

The Justice Department announced the settlement on July 17, 2024. It resolved claims in nine hospice fraud lawsuits brought by current and former employees. Kindred’s Warwick, Beaumont and Independence locations were part of a larger resolution that also covered Avalon, SouthernCare and SouthernCare New Beacon operations.

Kindred, Gentiva, and the Companies in the Agreement

Gentiva was the successor to Kindred at Home. The settlement agreement explains that Curo joined the Kindred at Home enterprise in July 2018 and that certain settling entities became part of the Gentiva enterprise in August 2022. Avalon, Kindred, SouthernCare and SouthernCare New Beacon were operating names within that history.

For someone who worked at a Kindred branch, the company’s name in the case may differ from the one on the office door.

Kindred Hospice Branches and the Ineligible Patient Claims

The government alleged that Kindred kept patients who were not terminally ill enrolled at its Warwick, Beaumont and Independence branches, billed Medicare for their care and kept the overpayments. Current and former employees brought the whistleblower cases behind the shared settlement.

The agreement assigns portions of that settlement’s federal amount to each branch’s allegations. Warwick, Rhode Island, accounts for $2,768,416 for conduct from 2015 through 2017.

Beaumont, Texas, accounts for $2,765,586 for conduct from 2016 through 2018. Independence, Missouri, accounts for $1,434,798 for conduct from July 2015 through December 2018.

What Kept Patients on the Rolls?

The Avalon allegations describe pressure on both admission and discharge decisions. In the Tennessee part of the case, the government alleged admissions and census pressure, discouraged discharges, incomplete or inaccurate information reaching certifying physicians, and internal warnings followed by a failure to return payments.

The payment model explains why those decisions matter. Medicare’s hospice benefit requires a physician’s certification of a prognosis of six months or less if the illness runs its normal course. Admission and recertification decisions determine whether that medical basis supports the stay.

Choosing the Medicare hospice benefit also means giving up Medicare coverage for curative treatment of the terminal illness. As the Office of Inspector General at the Department of Health and Human Services explains, inappropriate enrollment can leave a patient unknowingly forgoing needed treatment.

Routine home care pays by the enrolled day, and costs tend to be higher at admission and near death than in the middle of a stay. Keeping someone enrolled keeps the daily payment coming.

The same inspector general’s office examined that incentive in its January 2015 report, Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities. Its analysis of Medicare claims found longer stays and higher payments for assisted living residents than for beneficiaries in other settings. The report put the payment incentive plainly:

In Avalon’s case, the government alleged that the pressure reached the medical information used to justify enrollment. Its account of the Tennessee complaint said certifying physicians did not receive or adequately consider complete and accurate information about patients’ conditions.

A whistleblower’s complaint against Curo alleged a particularly concrete way the patient record could be manufactured:

The allegation places the chart beside the staffing record. A note describing a nurse’s work can be checked against whether that nurse was working.

The Money Kept After Warnings

The government’s Avalon complaint alleged that internal complaints and audits identified patients who were ineligible, yet the defendants kept the Medicare and Medicaid payments. The alleged failure continued beyond the original admission decision. The government said the company had been warned and still held on to the money.

Caris Healthcare’s settlement shows the same pattern in another hospice business. Caris agreed to pay $8.5 million in 2018 over allegations that included continued billing and retained overpayments after internal audits, nurses and its chief medical officer raised eligibility concerns. In both cases, the government said the hospice had been warned and kept the money.

The Other Locations and the Gadsden Referral Arrangement

The settlement covered Avalon’s Nashville and Chattanooga operations and SouthernCare New Beacon in Demopolis, Alabama. It also resolved eligibility and retained-payment allegations at SouthernCare in Daphne and Mobile, Alabama, South Bend, Indiana, and Youngstown, Ohio.

Gadsden concerned a different practice. The government alleged that New Beacon Healthcare Group and Curo Health Services paid a consulting physician to induce Medicare hospice referrals to SouthernCare New Beacon’s Gadsden, Alabama location.

The Gadsden allegations followed New Beacon’s voluntary disclosure. They concerned payments for hospice referrals allegedly violating the Anti-Kickback Statute, with consulting agreements as the vehicle. The question was what the physician received for sending patients to the hospice.

What Evidence Is Needed to Prove Fraud?

We connect the patient’s condition, the certification, the claim and what happened after a warning. We examine how those records fit together: the assessment a nurse made, the information the physician received, the discharge recommendation management rejected, and the payments retained after an audit identified a problem.

Clinical staff may know what changed between an assessment and the finished chart. Admissions staff may know how census targets affected decisions. Billing and compliance staff may know whether an eligibility finding reached the people responsible for repayment. Connecting the patient record to the Medicare claim makes those different views useful together.

For a hospice fraud whistleblower, the value lies in explaining the decisions behind the paperwork. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What Happened After the Warning

If you saw eligibility concerns buried, discharge decisions overridden or an audit followed by continued billing, tell our whistleblower experts what happened inside the hospice. We work with you to build the case around those decisions, bring in hospice fraud whistleblower lawyers who understand clinical records and repayment failures, and stay beside you through the case.