Home Care Hospice in Philadelphia: False Patient Records, Real Medicare Payments

The Home Care Hospice Philadelphia fraud case produced a civil settlement that let the government retain approximately $8.8 million in restrained accounts over allegations of false patient records and Medicare billing for unnecessary or unprovided hospice care. The Justice Department’s announcement also described cash payments and property transfers from the defunct provider’s owners and operators. For someone who knew the patients, the central allegation was recognizable: the records supporting payment told a story the care could not support.

Two former employees brought the whistleblower case after discovering the alleged hospice fraud. The civil resolution reached ownership and management as well as the Philadelphia, Pennsylvania company. The alleged scheme took taxpayer money meant for patients approaching the end of life.

The False Records Behind the Medicare Claims

The government alleged that Home Care Hospice submitted fabricated records for patients who were not terminally ill, and for crisis care that was unnecessary or never delivered. The settled False Claims Act allegations covered January 2003 through September 2008.

The eligibility allegation concerned the reason a patient entered and remained in hospice. Medicare’s benefit requires a prognosis of six months or less if the illness runs its normal course. As Medicare’s hospice coverage manual explains, physician certification supports that clinical judgment. A fabricated account of the patient’s condition reaches beyond a nursing note into the basis for payment.

The crisis-care billing allegation concerned the care itself. A claim could say that the patient needed intensive services when the patient did not, or say that the hospice delivered services it never provided. The government’s civil account alleged both. The patient’s need and the staff’s actual work are separate parts of the same claim.

Continuous home care is the benefit’s crisis service at home, paid by the hour. In its Odyssey civil settlement announcement, the Justice Department described care for an acute crisis requiring skilled nursing at home. It paid the highest hospice rate, several hundred dollars a day more than routine services. That payment difference explains the incentive to bill crisis care the patient never needed.

The government said Home Care Hospice used false records to make unsupported claims look payable. Patients who did not qualify for end-of-life care became the basis for billing it.

Clinical Supervision and the Patient Chart

Clinical supervision connects the patient’s condition, the care ordered and the work documented. For a nurse or clinical manager looking at the allegations in Home Care Hospice’s civil case, the important comparison is between what the patient needed, what staff actually did and what the finished chart said.

A separate civil complaint against Odyssey Healthcare shows how specific that discrepancy can become. A nurse whistleblower alleged that Odyssey billed continuous care for one patient while assigning the same nurse to other hospice patients. The complaint described patients in different wings of a nursing home receiving care from the same nurse during the billed time.

A claim records the service the provider says it delivered. The assignment record can show where the nurse was expected to be. We examine those together with the clinical notes and instructions from supervisors. An employee who worked that shift may understand the discrepancy long before an outsider can see it in the paperwork.

Why Enrolled Days Mattered to the Business

Routine hospice payment follows enrolled days, including days when no staff member visits. That makes admissions, continued enrollment and the cost of caring for each patient central to the business. Home Care Hospice’s alleged false eligibility records mattered because they supported entry into a benefit that kept paying across the stay.

The care is not equally intensive throughout that stay. Milliman’s 2019 report, Hospice Medicare Margins, found that in 2017 nursing and social-worker visits were more intensive near admission and death than across the stay overall, in both nonprofit and for-profit hospices.

The report explained the financial incentive under the older routine home care payment system:

Medicare changed that structure in January 2016, introducing a higher routine rate at the beginning of a stay and additional payments for certain visits near death. The older flat-rate incentive is the one relevant to Home Care Hospice’s alleged conduct period. The study helps explain why the admission record and continued enrollment could be commercially valuable well beyond the day a clinician signed them.

How Does the Medicare Hospice Cap Work?

The Medicare hospice aggregate cap limits a provider’s annual payments using a cap amount and its count of Medicare beneficiary shares. The calculation attaches to the provider number. Admission, discharge and transfer patterns can therefore affect the amount the provider can keep.

The beneficiary-counting rules account for patients whose care spans hospices or cap years. The census therefore matters to both care and payment.

In a separate Odyssey complaint, a whistleblower alleged that patient transfers within Philadelphia served a financial purpose. The complaint described the motive in the language of the payment calculation:

That alleged use of transfers gives a finance or intake employee a concrete pattern to recognize: patient movement serving a payment calculation. The relevant business records include the census, transfer dates, provider numbers and cap calculations, alongside the clinical reason given for the move.

Medical-Director Payments and Referrals

Medical-director arrangements connect physician oversight with the sources of new patients. The physician’s clinical judgment supports hospice certification. A referral kickback allegation asks what the payment actually bought: medical work or access to patients.

The Odyssey whistleblower’s complaint alleged that medical directors and associate medical directors typically doubled their referrals after going under contract. It also described how management evaluated the role:

The alleged bargain becomes clearer when the contract sits beside the performance review. A medical title described the position, while marketing activity supplied the measure of performance. For an insider who sees physician payments, referral reports or evaluations, those records can explain what the hospice expected in return for the money.

The Owners’ Cash and Property Settlement

The Home Care Hospice civil resolution, announced July 6, 2017, reached the people running the company and assets held outside it. The settling group included the executive director and co-owner, the development executive, the de facto co-owner, and the CEO and president.

The accounts described above had been frozen through a separate civil court action filed in 2008. The executive director and development executive also agreed to pay $400,000 in cash. The de facto co-owner and CEO agreed to pay $425,000. The defendants also agreed to transfer assets to the United States, including the owners’ interests in condominium properties.

The government alleged that the de facto co-owner, executive director and development executive knowingly caused Medicare to pay false bills backed by fabricated records. It also alleged that the company and all four owners and managers improperly benefited from those payments.

The resolution followed the money from Medicare claims into accounts and property. It also followed responsibility beyond whoever entered the last line in a patient’s chart.

The CEO’s Exclusion

Home Care Hospice’s CEO and president agreed to a ten-year exclusion from federal health care programs on July 6, 2017. HHS-OIG described allegations involving patients improperly certified as terminally ill, unsupported continuous care and falsified documents used to conceal the conduct.

The alleged cover-up put the CEO’s handling of healthcare records at the center of the exclusion.

What Evidence Is Needed to Prove Fraud?

Our whistleblower experts connect what you saw inside the hospice to its patient records, staffing and Medicare claims. Home Care Hospice’s civil case centered on allegedly fabricated records and unsupported care. If you recognize an admission the assessment could not support or a chart changed to make a bill work, that is a reason to speak with us.

Different employees see different parts. Nurses know the patient’s condition and the care delivered. Billers see the service level and dates sent to Medicare. Intake and finance staff can see patient movements and payment calculations. Managers may know who directed a change or received an internal warning. Our work is to connect that knowledge to the claims and the people responsible for them.

The Home Care Hospice settlements included whistleblower awards arising from the former employees’ suit. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Chart Left Out

If you saw a patient’s condition rewritten or care billed beyond what staff delivered, talk with our whistleblower experts about what happened inside the hospice. We build your strongest hospice whistleblower case with you and bring in hospice fraud whistleblower lawyers who understand eligibility records, crisis-care billing and management’s role in the claims. We stay beside you from the first account of what you saw through the pursuit of a recovery.