Arcadia and Saint Mariam Hospice: When the Hospice Supplied the Diagnosis

Arcadia Hospice Provider Inc. and Saint Mariam Hospice Inc. submitted about $3,917,946 in Medicare claims backed by false terminal-illness diagnoses in a hospice physician certification fraud scheme, according to the Justice Department. Hospice employees supplied diagnoses, and the physician adopted them without speaking to the patients’ primary physicians. The business seeking payment was supplying the medical story that made its patients eligible. Medicare and the taxpayers funding it paid for health care justified by false diagnoses.

The two hospices operated in Pasadena, California. The certifying physician was from Santa Paula, and the conduct ran from July 2016 through February 2019. Medicare paid approximately $3,289,889 on the claims. This case illustrates a specific task behind hospice fraud: turning a diagnosis into a certification, then using that certification to bill.

Who Determines Eligibility for Hospice?

A hospice physician certifies terminal illness, joined for the initial benefit period by the patient’s attending physician when the patient has a qualifying attending physician. Later periods require the hospice physician’s recertification. Medicare’s standard is a prognosis of six months or less if the illness runs its normal course.

That judgment has to rest on the patient’s condition. Under Medicare’s certification requirements, clinical information must support the prognosis and accompany the certification. The physician’s narrative must describe the individual patient’s circumstances and reflect the physician’s review of the medical record or examination. A generic statement reused across patients cannot do that work.

The benefit has two 90-day periods followed by successive 60-day periods, with certification required for each. In hospice eligibility fraud, the repeated decision matters: the same patient can generate a succession of claims, each resting on a renewed clinical judgment. The people preparing the record can influence what the physician sees at each renewal.

From a Staff Diagnosis to a Medicare Claim

At Arcadia and Saint Mariam, the Justice Department said claims relied on a physician adopting employee-supplied diagnoses whether they were true or not. He was not the patients’ primary care physician and had not spoken with those physicians about their conditions. His false evaluations, certifications and recertifications supported the claims Medicare paid.

The information moved in the direction the hospice needed: from its employees to the physician, then onto paperwork supporting payment. The physician’s clinical approval was the connection between the diagnosis and the bill.

An insider may know who selected the diagnosis, which patient records accompanied it and what the physician was told before signing. We examine that sequence against the certification and the claims that followed. A nurse’s original assessment, a later revision and a message explaining the change can show how the patient’s condition became a different story on paper.

The referral business was another part of the government’s account. DOJ separately alleged that a recruiter received illegal payments for bringing patients to the hospices. Those hospice referral kickback allegations concern how patients arrived. The physician’s role concerned how they became eligible on paper. An intake employee and a clinician may therefore see different decisions behind the same claim.

Why the Certification Keeps the Money Coming

Routine home care pays the hospice for enrolled days, including days without a visit. That makes continued eligibility valuable to the business. The connection between the patient record and the Medicare claim extends beyond the initial admission to every later period the physician certifies.

In its January 2015 study, Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities, the HHS Office of Inspector General analyzed Medicare hospice claims from 2007 through 2012. It found longer stays and higher payments for beneficiaries in assisted living than in other settings. Its explanation of the payment incentive was direct:

That study examined assisted-living care. The connection to this case is the payment structure: a false certification can open a stream of daily payments, and a false recertification can keep it open. The clinical judgment is also a revenue decision for the hospice that assembles the paperwork.

When the Signature Becomes a Routine

In a separate case against Evercare Hospice, a whistleblower alleged that a medical director signed certifications in batches without reviewing the clinical information. The complaint described what the employee saw during care-team meetings:

The allegation put an observable practice behind the signed documents: an employee could describe how the approvals happened, including the missing review.

Evercare agreed to an $18 million settlement announced in July 2016 over allegations of billing for patients whose records did not support terminal illness. Both accounts turn on what the physician reviewed before signing. In the Pasadena case, DOJ described diagnoses supplied by hospice employees. In the Evercare complaint, the whistleblower alleged a signing process that skipped clinical review.

What an Insider Can Explain

The strongest account connects the patient’s condition, the information sent to the physician and the bill sent to Medicare. Nurses may know what changed between their assessment and the certification packet. Intake staff may know who supplied the diagnosis. Healthcare billing staff may know which claims followed.

We work with the insider to connect those views. We use chart revisions, physician messages and claim histories to establish who made the decisions and what information they had.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the Diagnosis Reached the Doctor

If you saw a hospice choose diagnoses, change clinical records or steer certifications to keep billing, speak to our whistleblower experts about those decisions. We build the case around your knowledge of those decisions, bring in hospice fraud whistleblower lawyers who understand certification and Medicare billing, and stay beside you throughout the case.