Harmony Care Hospice: An Eligibility Case That Reached the Owner

In the Harmony Care Hospice settlement, the South Carolina provider and its owner agreed to pay $1,286,999 over allegations of billing Medicare for ineligible hospice patients. Two former employees brought the case. Their complaint described changing diagnoses, disputed signatures and payments for referrals, the decisions behind a claim that a bill alone would never explain. The resolution reached the owner personally, both through the payment and through federal oversight.

The Department of Justice announced the settlement on November 20, 2012. This hospice fraud case concerned the South Carolina company and a whistleblower case in the District of South Carolina. The complaint identifies Harmony locations in Lake City, Hartsville, Clinton and Columbia. The whistleblowers worked in its Lake City office, one as a licensed master social worker and the other as an administrative assistant to the clinical director.

When the Chart Kept a Patient in Hospice

The whistleblowers alleged that Harmony treated chronic illness as enough to admit or keep a patient, even without a terminal diagnosis. According to their complaint, the clinical director told staff that illnesses such as dementia or congestive heart failure could qualify someone for hospice and wanted patients who could stay for at least two years.

Medicare hospice eligibility requires a physician-certified prognosis of six months or less if the illness runs its normal course. The benefit can continue through later certifications while the patient remains eligible, as Medicare’s hospice coverage manual explains. That makes the basis for admission and each recertification central to hospice eligibility fraud.

The complaint gave a patient-level example. One patient’s stated terminal illness allegedly moved from general debility to coronary artery disease, back to general debility, then to arteriosclerotic cardiovascular disease, and back to general debility again. The whistleblowers alleged that the changes helped avoid detection and increase government reimbursement. The diagnosis on the chart kept changing. The patient kept qualifying on paper.

Physician orders raised a separate problem. The administrative assistant alleged that she witnessed the clinical director forging a doctor’s signature and reported it to human resources. The complaint also described a medical director telling the clinical director not to slip improper orders to him for signature and demanding discharge of nonterminal patients admitted with general debility.

The Patient’s Election Was Part of the Alleged Scheme

The whistleblowers alleged that Harmony promoted housekeeping and help with personal errands while downplaying the terminal-illness requirement. They said patients did not understand what they were signing, or had not signed at all:

A hospice election changes the patient’s Medicare coverage for the terminal illness and related conditions. The hospice takes responsibility for that care, and the patient gives up Medicare payment for curative treatment of those conditions outside the benefit. In the alleged scheme, the document supporting payment also recorded a choice the patient said they had never made. The patient had something to lose alongside the taxpayer.

Referral Fees and a Facility’s Aide

The complaint alleged hospice referral kickbacks in both cash and services. Harmony allegedly paid employees $138 for each hospice patient they referred to Harmony or Beacon Hospice, which the complaint identified as a hospice under the same owner.

The whistleblowers also alleged that Harmony supplied Suncrest Residential Care Home with a certified home health aide in return for hospice referrals. The aide was available eight hours a day for residents who, the complaint alleged, neither needed nor qualified for the service. It also alleged that patients referred through this arrangement did not qualify for hospice because they were not terminally ill.

The arrangement described in the complaint gave the referring facility staff time and gave the hospice patients. A referral-payment record and an aide schedule tell the part of that story the diagnosis field leaves out.

Why Keeping a Patient Meant Keeping the Payment

Medicare pays routine hospice health care by the enrolled day, including days without a visit. Care costs tend to be higher around admission and death and lower in between. Daily payment rewards keeping a patient enrolled through that less intensive middle period.

The Department of Health and Human Services’ Office of Inspector General examined that incentive in its 2015 report, Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities. It analyzed Medicare hospice claims from 2007 through 2012 and found that hospices typically provided fewer than five hours of visits a week while receiving about $1,100 a week for each beneficiary receiving routine home care in assisted living. The report put the incentive plainly:

That program-wide finding explains the financial attraction of a referral relationship that brings in patients for extended stays. In Harmony’s case, the whistleblowers supplied the company-specific allegation: staff were instructed to keep patients whose chronic illnesses did not support hospice eligibility. The referral, the patient record and the paid days belong in the same account of how hospice billing becomes a false claim.

The Owner’s Personal Payment and Integrity Agreement

Harmony’s owner and chief executive officer was individually liable for $200,000 within the joint settlement. The resolution also reached how the business would be monitored afterward.

The company and owner agreed to a five-year Corporate Integrity Agreement with the Inspector General’s office. In the settlement announcement, the Inspector General said that both had agreed to federal monitoring and reporting requirements designed to prevent the problems from recurring.

For someone who raised concerns inside the company, that distinction matters. The complaint alleged that nurses took eligibility concerns to the owner and other managers and were told it was a matter of how admissions were documented. The settlement’s response reached the person running the business as well as the company submitting the claims. A personal share of the payment and personal oversight obligations addressed different parts of that responsibility.

What the People Inside Could See

Harmony’s case began with a social worker and an administrative assistant. Their complaint connected patient conversations, staff meetings, physician orders and referral arrangements. A patient saying they never elected hospice means more when someone else knows how the election form appeared in the file.

The complaint also alleged pressure to increase medication orders because the hospice was not spending enough on medications.

Other hospice cases show why management instructions and internal warnings matter. In the Hospice Care of Kansas settlement, the government alleged that compensation tied to census and admissions, delayed discharges and instructions to describe patients misleadingly produced false claims. The pressure reached the clinical employees writing the record.

In the Caris Healthcare settlement, the government alleged that internal audits, nurses and the chief medical officer raised eligibility concerns, yet billing continued and the company retained overpayments. Harmony’s complaint likewise described warnings reaching management. The value of an insider’s account is the connection between what management heard and what it directed staff to do.

DOJ said Harmony’s two former employees would share in the government’s recovery. A whistleblower case under the False Claims Act can pay the person who brings the case 15% to 30% of what the government recovers.

You Know How the Patient Stayed Enrolled

If you know who changed the diagnosis, supplied the signature or directed staff to keep a patient, talk with our hospice whistleblower experts. We build your strongest hospice whistleblower case from your knowledge of the admissions and payments, bring in hospice fraud whistleblower lawyers with the relevant healthcare experience, and stay beside you through the pursuit of a recovery.