Canon Healthcare: Billing Again for Care Already in the Daily Rate

Canon Healthcare hospice fraud allegations concerned unnecessary general inpatient care, separate physician bills for work already covered by the daily hospice payment, and home visits billed as a doctor’s work when no doctor performed them. For someone inside the hospice, the telling detail may be the extra physician claim attached to a day Medicare had already paid for.

Canon Healthcare operated a hospice with offices in the New Orleans area, Baton Rouge, Covington and Gulfport, Mississippi. In its August 6, 2021 account of the billing allegations, the Justice Department said the owner oversaw day-to-day operations and instructed employees to bill medically unnecessary general inpatient services to maximize reimbursement.

The alleged extra physician bills made this a health care billing case about what Medicare had already bought, what a billing code represented, and who actually performed the work.

What Are the Criteria for a GIP Hospice?

General inpatient care, usually called GIP, covers pain or symptoms that cannot be managed in another setting. It is a higher-paying level of hospice care, with a clinical reason for each billed day. Inpatient respite serves a different purpose: relief for the caregiver.

The payment structure matters. A hospice receives a daily payment for an enrolled patient, and the care level changes that payment. The alleged hospice billing fraud at Canon used a more expensive inpatient level when, according to the government, the patient’s needs did not support it. The billing instruction increased what Medicare was asked to pay for the day.

Hospice eligibility and the need for inpatient symptom management are separate questions. A patient can qualify for hospice while needing routine care rather than GIP. In that situation, the nursing observations and symptom-management records explain the appropriate payment level. The patient’s terminal diagnosis alone does not explain why the higher rate continued.

That is why the government’s allegation about the owner’s instructions matters. It connects a decision inside the business to the level of care put on the claim. A nurse may know what the patient needed, while a biller sees the level the company charged.

Physician Services Already Inside the Daily Payment

The government alleged that Canon separately billed physician evaluation and management services that were already included in the GIP daily payment. The same inpatient care generated a hospice payment and an additional request for physician services the government said that payment already covered.

The code details make the allegation concrete. The Justice Department described Canon routinely billing CPT 99233 alongside GIP. In the government’s account of the claims, that evaluation and management code required two of these components: a detailed interval history, a detailed examination, or medical decision-making of high complexity. The code described clinical work, not simply the patient’s presence in an inpatient bed.

CPT 99236 and the Same-Day Stay

CPT 99236 raised a separate mismatch between the service described and the stay billed. According to the Justice Department’s account, the code was for inpatient admission and discharge on the same calendar day, with a stay of at least eight hours but less than 24 hours. The physician had to be present, perform the initial care, and document the admission, discharge and hours of care.

The government alleged that Canon routinely used that code for beneficiaries who remained on GIP for more than 24 hours. From approximately January 1, 2013 through August 25, 2017, Canon submitted approximately 1,053 claims under the code, for which Medicare paid approximately $223,601.

The same-day code allegedly described a stay that ran longer. And the government said the physician services billed under both codes belonged inside the GIP payment in the first place.

For an insider, the connection runs from the actual admission and discharge to the physician’s documentation and the claim. We look at those records together with the hospice payment and the instructions that produced the separate bill. The important detail is what the extra charge asked Medicare to buy.

Is Knowingly Billing for Services Not Provided an Example of Fraud?

Yes. Knowingly billing Medicare for services not provided is healthcare fraud. The government alleged that Canon claimed home visits as a doctor’s work when a doctor did not perform them. The provider identified on the claim mattered as much as the visit code.

The Justice Department said Canon submitted approximately 1,949 home-visit claims under CPT 99350 from approximately January 1, 2013 through August 25, 2017. Medicare reimbursed Canon approximately $316,384 for those purported physician visits.

The industry payment model explains why a visit claim deserves its own examination. In Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities, the Department of Health and Human Services’ Office of Inspector General analyzed Medicare hospice claims from 2007 through 2012. Its finding puts the relationship between payment and visits plainly:

The study shows the economics of paying for days of hospice care while delivering individual visits. Canon’s alleged extra physician bills asked Medicare to pay for a particular clinician’s work on top of that daily payment, yet the government said no doctor performed those home visits.

When the Care Level Outruns the Patient’s Needs

Other hospice cases show how the inpatient rate can become detached from the care a patient needs. In the Covenant Hospice settlement announced June 18, 2015, the company agreed to pay $10,149,374 over allegations that it billed GIP when routine home care was appropriate. The government said medical records did not support the inpatient level.

A separate whistleblower complaint involving Interim Hospice alleged how a symptom could be supplied to fit the desired billing level:

The allegation describes the claim driving the chart. Staff were allegedly given a symptom to use regardless of the patient’s condition. That is the sort of instruction a clinician can recognize from inside the operation, before it becomes a line on a Medicare bill.

In its March 2016 GIP study, the Office of Inspector General projected $268.1 million in inappropriate Medicare payments from a medical-record review of a stratified random sample of 565 GIP stays in 2012. Hospices commonly billed the inpatient level when patients lacked uncontrolled pain or unmanaged symptoms. The study found both stays where GIP was unnecessary throughout and stays where the need ended before the GIP billing did.

How to Identify Hospice Fraud?

Identifying the billing pattern means connecting what the patient needed, what the clinician did, what the note says, and what Medicare was asked to pay. Canon’s allegations make those connections unusually concrete: the inpatient level, the separately billed physician work, the length of the stay, and the clinician behind a home-visit claim.

A nurse’s account of the patient’s symptoms and a coder’s account of the claim can describe the same problem from different sides. Our work with hospice insiders brings that knowledge together with the billing instructions and the payments at issue. The useful account explains how the claim came to say something different from the care.

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

You Saw the Care Behind the Claim

If you saw inpatient billing outlast the patient’s symptoms or physician claims that did not match the visits, speak to one of our whistleblower experts about what happened inside the hospice. We work with you to build your strongest hospice whistleblower case, bring in hospice fraud whistleblower lawyers who understand daily payments and physician billing, and stay beside you through the case.