American Senior Communities: Therapy Already Covered by the Hospice Benefit

In the American Senior Communities hospice therapy fraud case, the company agreed to pay $5,591,045 to resolve allegations that it charged Medicare separately for therapy already covered by residents’ hospice benefits. The case began with a former employee of a hospice company doing business with the nursing-home operator.

American Senior Communities LLC provides skilled nursing and long-term care services throughout Indiana. The former hospice-company employee brought the False Claims Act case. The whistleblower’s connection to the billing ran through the hospice’s business relationship with the nursing-home operator.

Why Therapy Covered by Hospice Matters

Medicare’s hospice benefit includes physical and occupational therapy and speech-language pathology. A hospice receives an all-inclusive daily payment through Medicare Part A for covered hospice care, regardless of how many services it provides that day. Therapy within that coverage belongs inside the hospice payment.

The resident’s hospice election matters because it changes how Medicare pays for treatment of the terminal illness and related conditions. For therapy aimed at managing those conditions, the hospice benefit is the payment route. That is why the clinical purpose of a visit matters to this billing allegation.

That arrangement can operate inside a nursing home. The resident stays in a facility that provides room, board and care, while a hospice oversees hospice services. Staff from different businesses may work with the same resident, and their responsibilities can overlap.

The nursing facility has its own payment rules. Under Medicare’s skilled nursing facility consolidated billing, therapy ordinarily sits within the facility’s bundled payment arrangements. Terminal-condition hospice services follow the hospice benefit. A therapist’s presence in the building does not settle which provider should receive Medicare payment for the service.

American Senior Communities’ alleged extra charge crossed that boundary. Taxpayers were being asked to fund therapy already included in the hospice benefit.

The Therapy Contractor and the Medicare Biller

The business supplying the therapist and the business receiving Medicare payment can be different. Under the facility’s bundled payment arrangement, Medicare pays the nursing facility, and the facility’s contract determines payment to an outside supplier. A separate therapy business can therefore have staff treating residents without having a separate claim on Medicare for every visit.

CMS’s consolidated-billing rules also reach beyond where a treatment happens. Taking a resident offsite does not by itself take the service out of the facility’s bundle. Therapy remains subject to consolidated billing even during a stay that Part A does not cover. Those features make billing responsibility more specific than the name on a therapist’s paycheck or the room where the care occurred. Hospice adds the question at the center of this case: whether the service already belongs within the resident’s hospice coverage.

What Evidence Is Needed to Prove Fraud?

For a health care fraud case involving hospice therapy, useful evidence connects the resident’s hospice election, the therapy actually provided and the Medicare claim. We examine those connections with the people who know the care or the billing, including what the business knew when it submitted the charge.

The hospice election and plan of care connect a resident to the covered treatment. Comparing them with the facility’s claim can show a separate charge for that care. The provider submitting the claim matters here: a therapist can describe the care while a separate business makes the billing decision.

A hospice employee may know the election and care plan. A therapist may know why a treatment was ordered and what happened during the visit. A billing employee may know how the same service appeared on a claim. The value is in bringing those views together around the same resident and service date. That is the work our whistleblower experts do with an insider who sees only part of the transaction.

What the Therapy Record Can Reveal

In the separate case against RehabCare and Kindred Healthcare, the government’s amended complaint alleged that pressure to reach high-paying therapy categories changed what staff counted as skilled treatment:

The same complaint described a program director’s email about pushing newly admitted residents into the highest therapy category. The director told a manager that this was clinically inappropriate for some medically compromised residents at a hospice level of care, who struggled to reach the higher therapy levels. That put the concern inside the company’s own communications: the payment target and the residents’ condition were pulling in different directions.

Those allegations concerned what staff represented as skilled therapy. American Senior Communities’ concerned a separate Medicare charge for therapy already covered by hospice. Both make the clinician’s account valuable: what the resident received, why they received it and how the service became a claim. The same word on a bill can conceal very different decisions inside a provider.

The Settlement and Medicare’s Estimated Loss

The Justice Department announced American Senior Communities’ settlement on August 10, 2022. The investigation estimated Medicare’s loss at $2,795,522. The company agreed to pay twice the estimated loss to settle the case.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In a hospice therapy matter, the starting point is the insider’s knowledge of how the care, coverage and claims fit together.

You Know the Care Behind the Claim

If you saw a facility bill Medicare for therapy that hospice already covered, speak with our whistleblower experts about building your strongest hospice billing whistleblower case. We build the case with you and bring in healthcare whistleblower lawyers who understand nursing-facility and hospice billing. You have a partner from the first account of what happened through the pursuit of a recovery.