Good Shepherd Hospice: Medical Director Ties and Ineligible Hospice Admissions

Good Shepherd Hospice agreed to pay $4 million to resolve a nursing home referrals fraud case involving allegations that it billed Medicare for patients who were not terminally ill. The government alleged enrollment bonuses and medical-director hiring based on referral connections. Someone inside that admissions process could see how a patient became a census target, a bonus and a Medicare claim.

Good Shepherd was a for-profit hospice headquartered in Oklahoma City, providing services in Oklahoma, Missouri, Kansas and Texas. The Department of Justice announced the settlement on February 6, 2015. Two former employees brought the allegations in a qui tam case under the False Claims Act.

Nursing-Home Referrals and the Hospice Benefit

Medicare hospice eligibility depends on a terminal prognosis of six months or less if the illness follows its normal course. The patient elects palliative treatment, focused on relief from pain, symptoms or stress. During that election, Medicare no longer covers treatment designed to cure the terminal illness.

An ineligible admission puts the patient’s coverage for curative treatment at stake while taxpayers fund hospice care. The government alleged that Good Shepherd enrolled people who lacked the required terminal prognosis. A census target cannot supply that prognosis.

A resident can receive hospice services while living in a nursing home. The facility provides room, board and care unrelated to the terminal illness, while the hospice supplies hospice services.

Medicare pays the hospice a daily amount at the appropriate level of care, regardless of the number of services provided that day. That payment structure makes each enrolled day valuable to the hospice. Nursing-home operators have discretion over which hospices may provide services in their facilities. Access therefore depends on a relationship with the nursing home as well as a source of patient referrals. That is why a facility employee’s knowledge of the arrangement matters.

Admissions Targets and Enrollment Bonuses

The government alleged that Good Shepherd pressured staff to meet admissions and census targets and paid bonuses based on the number of patients enrolled. It specifically identified hospice marketers, admissions nurses and executive directors as employees receiving those incentives.

Those roles span the path from finding a patient to admitting that patient and running the operation. The alleged incentive reached the nurse making the admission as well as the marketer bringing in the referral. The same enrollment could advance the census target and the employee’s bonus.

The government also alleged that Good Shepherd failed to train staff properly on hospice eligibility. Read together, the allegations describe a business giving employees financial reasons to enroll patients while failing to equip them properly to decide who qualified.

Medical Directors Hired for Their Referrals

The government alleged that Good Shepherd hired medical directors based on their ability to refer patients, with particular attention to their nursing-home connections, which it viewed as an easy source of referrals. That puts the hiring decision itself at the center of the referral allegation.

The clinical role matters. A hospice medical director or physician member of its care team certifies and recertifies the terminal prognosis, with clinical findings supporting it. A physician selected for referral ability can therefore sit close to both the source of patients and the eligibility decision.

For a case built around Good Shepherd’s alleged conduct, the medical-director contract and the referral history belong together. We examine the work the contract called for, the services actually performed, the payments and the admissions associated with that relationship. The question is what the company was buying when it hired the physician.

HPH Hospice and the Value of Facility Access

HPH Hospice, also known as Hernando-Pasco Hospice, faced a related allegation involving free services to skilled nursing facilities in exchange for referrals. Its settlement, announced on July 22, 2013, also addressed alleged ineligible enrollment, delayed discharge, misleading records and inflated levels of hospice care.

The comparison makes the value of access concrete. In the HPH case, the alleged exchange involved free services to the facilities. In Good Shepherd’s case, the government focused on medical-director hiring based on referral ability. Both accounts connect a business relationship around the nursing home to patients entering hospice.

The Settlement and Whistleblower Recovery

Each Good Shepherd business in the settlement agreed to enter a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. Those agreements called for procedures and reviews aimed at preventing and promptly detecting similar conduct.

The Justice Department also announced that the former employees would receive a share of the recovery. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Evidence Is Needed to Prove Fraud?

For the conduct alleged in Good Shepherd’s case, the evidence connects the patient’s eligibility, the referral relationship, the admission decision, the enrollment incentive and the Medicare claim. We look for the records that explain those connections and the people who understood them at the time.

We connect clinical assessments and certifications with admissions reports, bonus plans, payroll and referral records. The work is tying what those records say to the same patients and Medicare claims.

Training materials matter here because inadequate eligibility training was one of the government’s specific allegations. They help show what employees were taught while management pressed for admissions. Claims then connect the enrollment decision to the request for Medicare payment.

A nursing-home nurse may know a resident’s condition and how the referral began without seeing the hospice’s bonus plan. A hospice employee handling payroll may know the incentive without seeing the resident’s daily care. We bring those perspectives together to assess the health care fraud case. Your knowledge of what happened inside the facility is a reason to talk with us, even when you see only part of the business relationship.

You Saw What Drove the Admissions

If you saw nursing-home connections drive hospice admissions, or enrollment bonuses outrun the clinical judgment, talk with our whistleblower experts about what happened. We build the case with you and bring in healthcare fraud whistleblower lawyers who understand hospice eligibility and referral arrangements. We stay beside you as the account you bring becomes a case grounded in the patients, payments and decisions you know.