Chemed and Vitas: A Sales Target for a Medical Crisis

In the Chemed and Vitas False Claims Act settlement, the companies agreed to pay $75 million to resolve allegations that they billed Medicare for ineligible hospice patients and inflated levels of care. The government’s account connected admission bonuses and crisis-care targets to the claims submitted to Medicare. For someone who knows the admissions decisions, the nursing work or the billing, that connection is the heart of the case.

Chemed Corporation, based in Cincinnati, acquired Vitas in 2004. The Department of Justice announced the settlement on October 30, 2017, describing allegations covering 2002 through 2013. The alleged practices reached both the decision to enroll a patient and the decision about which level of care to bill.

Hospice Eligibility and the Admission Bonus

The government alleged that Vitas billed Medicare for hospice patients who were not terminally ill. It also alleged that the companies rewarded employees for increasing the number of patients receiving hospice services without regard to whether those patients qualified or would have benefited from continued treatment aimed at curing their illness.

As the Justice Department explained in its announcement, the benefit serves patients who elect palliative treatment for a terminal illness and have a life expectancy of six months or less if the disease follows its normal course. Palliative health care focuses on relief from pain and stress. The patient gives up curative treatment for that illness in choosing the hospice benefit.

We see a particular wrong in the government’s allegation: employees could earn an admission bonus while the patient’s need for a different course of treatment went disregarded.

The earlier government account, published in May 2013, described bonuses tied both to enrollment and to longer stays. It also gave a concrete example. According to the department’s description of the complaint, Vitas admitted a patient who showed no sign of a terminal condition, while its own records described the patient as healthy for her age.

For an insider, the admission record and the incentive behind it belong together. The chart speaks to the patient’s condition. A bonus tied to enrollment speaks to what the business rewarded. We examine how those incentives affected the decisions to admit patients and bill for their care.

Continuous Home Care and the Higher Daily Payment

The second allegation concerned continuous home care, also called crisis care. The government alleged that Vitas billed Medicare for this care when it was unnecessary, never actually provided, or delivered in a way that failed Medicare’s requirements.

The settlement announcement described four Medicare hospice care levels. Continuous home care is for acute symptoms causing a brief medical crisis. The earlier announcement explained its practical purpose: immediate, short-term skilled nursing services that allow the patient to remain at home.

That clinical distinction changes the payment. The Justice Department described continuous home care as the highest daily hospice rate, paying hundreds of dollars more per patient than routine hospice services. Whether a patient qualifies for hospice and whether that patient needs crisis care are separate questions, with separate consequences for the bill.

According to the government, Chemed and Vitas set goals for the number of crisis-care days billed to Medicare. They allegedly used aggressive marketing and staff pressure to increase those claims without regard to whether patients needed the care or received it.

A medical crisis with a sales target.

We see who loses in that allegation: taxpayers fund the inflated claims, while honest hospices bill routine care at the lower rate.

The allegation turns on what drove the care category: the patient’s acute symptoms, the services delivered and the business’s demand for more billable days. It puts the nursing record beside the billing record and the instruction to increase volume. Each tells a different part of the story.

Three Days of Crisis Care, With Bingo in the Chart

In its filing announcement, the department described an alleged mismatch between the billed care and the patient’s records. Vitas allegedly billed three consecutive days of crisis care even though the records did not indicate that the patient needed it and showed the patient playing bingo during part of that time.

The useful detail is the comparison across those same days. According to the government’s account, Medicare received crisis-care claims that the chart kept at the time failed to support. A clinician or billing employee who understands both records can explain why the claim and the care tell different stories.

How the Whistleblower Cases Came Together

The settlement resolved the United States’ lawsuit and three whistleblower lawsuits. The government joined the whistleblower cases.

What the Hospice Settlement Resolved

The civil settlement covered the government’s allegations about both ineligible patients and continuous-home-care claims.

Vitas also entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.

The commercial decisions remain the useful part of this case for someone working in hospice: what admissions earned bonuses, what care days counted toward a goal, and what the patient records showed when Medicare was billed. Those are decisions an employee may recognize from ordinary work.

What Other Hospice Cases Show About the Evidence

In AseraCare’s 2019 hospice case, the court identified a medical opinion not honestly held as a possible basis for a false claim. That puts the clinician’s actual belief alongside the words on the certification.

For a hospice insider, that means looking at what supported the prognosis when the patient was evaluated. Our account of False Claims Act trials examines how that evidence can support a case.

Care Alternatives’ hospice case concerned serious documentation failures and whether they mattered to payment. The court examined the support for the claims alongside what the government knew.

The records supporting eligibility belong beside the information that reached the payer. We examine what Medicare was told, when it was told, and how that information related to the claims. The case can turn on the content of that communication and the clinical support for payment.

What the Records Inside a Hospice Can Show

The evidence connecting the chart, the claim and what management knew is the practical thread through the Chemed and Vitas allegations. Together, those records and decisions connect the clinical work to the payment sought.

We examine an admission decision beside the condition documented at the time. For a crisis-care claim, we compare the billed days with the acute symptoms and the nursing services described in the records. An instruction to increase volume matters because it may explain why the claim took the form it did.

The person who knows the patient may see the clinical mismatch. The person who handles billing may see the care category submitted. Someone involved in admissions or management may understand how bonuses and targets affected the decision. We bring those perspectives together with the records, so the case reflects how the hospice actually worked.

What Share Is Possible?

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

Speak to one of our whistleblower experts about what your hospice knowledge could support.

You Know What Drove the Hospice Bill

If you saw admission bonuses or crisis-care targets override what a patient’s chart supported, talk with our whistleblower experts about the hospice billing you know. We build the case with you and bring in healthcare fraud whistleblower lawyers who understand hospice eligibility and Medicare care-level billing. We stay beside you as your knowledge of the care becomes a case about the claims.