Creative Hospice Care: Medical Director Pay That Rose With Referrals

The Creative Hospice Care settlement totaled $9.2 million over allegations that monthly medical director stipends and a signing bonus bought patient referrals. The government alleged that compensation increased when a physician sent more patients and decreased when referrals failed to arrive. For someone who handled physician contracts, marketing or agency finances, the question is concrete: what was the hospice paying the doctor to do?

The Justice Department announced the payment on June 11, 2025. It said the hospice fraud investigation began with a former Creative employee who marketed its services to health care providers. That employee alleged that Creative paid medical directors to send patients its way. Two more whistleblower complaints followed with similar allegations.

Why the Complaints Name Homestead Hospice

One whistleblower’s complaint identifies Creative Hospice Care, Inc. as the legal business name for Homestead Hospice & Palliative Care. The Justice Department’s announcement connects the Creative settlement to three whistleblower lawsuits against Homestead.

Do Doctors Get Kickbacks for Referrals?

The government alleged that Creative paid doctors through medical directorships to obtain patient referrals. The monthly stipend and signing bonus were the payment vehicles. The alleged measure of success was how many patients the doctor sent.

The complaints put specific work behind that question. In Greenville, South Carolina, whistleblowers alleged that one medical director received $4,000 a month for at most three to four hours of work. They described brief team meetings and visits to the agency to sign waiting stacks of certifications, orders and medication changes.

In Florence, they alleged that another director worked only with patients he referred, skipped team meetings and kept no time logs. After he resigned, a manager allegedly explained why the company should bring him back:

The alleged reason for rehiring him was his ability to send patients. That conversation gives the payment records a purpose that a contract’s job title alone cannot explain.

Is Hospice Recruitment at Assisted Living Facilities Fraudulent?

The Homestead whistleblowers alleged that the hospice bought assisted-living referrals with staffing and entertainment supplied to facilities:

A separate complaint described Homestead placing two full-time nursing aides at Sonshine Manor. The whistleblower alleged that they cared for all residents, including people who were not Homestead patients, and sometimes were the only providers working a shift. The hospice was allegedly filling the facility’s staffing gaps to get its referrals.

The economics explain why access to a facility matters. In its January 2015 study, Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities, the Department of Health and Human Services’ Office of Inspector General examined Medicare hospice claims from 2007 through 2012. It found longer care and higher payments for beneficiaries in assisted living than in other settings, often for diagnoses requiring less complex care. The study raised concerns that the payment system encouraged hospices to target those residents. That payment incentive gives a steady referral relationship its value.

What Evidence Is Needed to Prove Fraud?

In the Creative complaints, the evidence connected what the hospice paid its directors, what work they performed, which patients they referred and the Medicare claims that followed.

At the Rock Hill agency, whistleblowers alleged that financial statements showed $8,300 a month in medical director spending while the director’s contract provided for $2,400. The complaint said management did not answer repeated requests to explain the discrepancy. The contract and the agency accounts told different stories about the same expense.

The patient flow also mattered. Another whistleblower alleged that business went back to the doctors the hospice paid:

We examine those connections with an insider: what the physician agreed to do, what the time and meeting records show, which patients arrived, and how the payments changed. The internal explanation for keeping a physician can be as revealing as the amount on the check.

The Creative Hospice Whistleblower Reward

The Justice Department reported that the whistleblowers who brought the three lawsuits received over $1.5 million collectively from the settlement. The employee who marketed Creative’s services had seen the relationship between the company and the providers sending it patients. That vantage helped start the government’s investigation.

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

The Same Payment Design in Other Hospice Cases

Tapestry Hospice of Northwest Georgia reached a $1.4 million settlement in 2024 over alleged hospice referral kickbacks with the same design: monthly stipends and a signing bonus, with compensation rising when referrals increased and falling when they did not arrive.

STG Healthcare of Atlanta’s 2020 settlement included allegations that a physician received pay as a backup medical director without serving as a legitimate hospice physician, and that the company billed for patients he referred. Across these allegations, the recurring question is what the directorship actually purchased: which duties the doctor performed and which business the doctor supplied.

Why a Referral Becomes a Medicare Claim

Medicare pays hospice for each enrolled day, including days without a visit. As MedPAC explains in its March 2026 report, hospices provide more services at the beginning and end of a stay and fewer in the middle. Bringing in a patient can therefore create a continuing stream of payments.

In Creative’s case, the government alleged that the referral arrangements violated the Anti-Kickback Statute and caused false claims under the False Claims Act. The connection ran from the physician’s compensation to the referral and then to government billing. Patients depend on the doctor’s recommendation, while taxpayers fund the care that follows. A payment system that allegedly rewards the doctor for sending patients puts that recommendation at the center of the case.

You Know What the Director Was Paid to Do

If you handled director contracts, referral relationships or the agency’s accounts, speak with our whistleblower experts about what the director was really paid for. We build the case with you and bring in hospice fraud whistleblower lawyers who understand physician compensation and healthcare billing. We stay beside you to turn what you know about the payments into your strongest hospice whistleblower case.