Hospice Medical Director Kickbacks: When the Pay Follows the Patients

Hospice medical director kickbacks use a physician’s compensation to buy patient referrals under the cover of paying for medical work. The contract promises oversight. The pay rises when the physician sends more patients and falls when the referrals stop. For someone approving the checks, attending the care meetings or managing admissions, the question is concrete: what work did the hospice receive for that money? The answer can connect a physician’s stipend to a hospice fraud case over the claims that followed.

Do Doctors Get Kickbacks for Referrals?

Yes. Civil hospice cases describe alleged monthly stipends, signing bonuses and sham medical-director contracts used to pay doctors for referrals. The physician supplies the patients, the hospice bills Medicare, and compensation rewards the flow of business.

These paid referral arrangements can support a False Claims Act case even when the patient qualified for hospice. The Anti-Kickback Statute addresses the bought referral, not just whether the patient needed care.

Patients get steered, and taxpayers fund the Medicare claims that follow. A physician or finance employee who knows why the payments changed can help us get past the contract to what the hospice was buying.

When a Hospice Medical Director Contract Conceals Sham Payments

Sham payments under a hospice medical director contract become visible when the agreement, the work and the referrals tell different stories. A hospice medical director paid for referrals, not services, may have a contract listing clinical duties while management judges the relationship by the patients it brings in.

The whistleblower complaints against Homestead Hospice make that comparison unusually concrete. One complaint alleged that a physician received $4,000 a month for, at most, three to four hours of work. The whistleblowers challenged the payment in relation to the services actually supplied.

The same complaint described another paid medical director who allegedly served only his own referrals, attended no interdisciplinary team meetings, signed no terminal-illness certifications for other patients and kept no time logs. An executive allegedly wanted to preserve that relationship for a reason the complaint states plainly:

The company was allegedly defending the relationship on the strength of the patients it produced. For an employee who saw the discussions behind a contract renewal, those discussions can explain why the checks continued.

The referral relationship could also run back toward the paid physician. In another Homestead whistleblower complaint, employees allegedly encouraged patients sent by other doctors to turn their care over to a Homestead medical director. Staff were allegedly trained to say the original physician could stay informed while the hospice offered care through one point of contact. The alleged arrangement steered business toward the same doctors who supplied referrals.

What Are the Responsibilities of a Hospice Medical Director?

Medicare requires a hospice to designate a physician as medical director. The daily hospice rate already includes the physician’s administrative and supervisory work, including plan-of-care services.

The physician also exercises clinical judgment in the admission and recertification decision, documenting why the patient’s condition supports certification of terminal illness. That is part of the work behind the title.

The Homestead whistleblowers alleged the opposite: assessments and reassessments billed without being performed, and patients told that a physician had determined they were terminally ill when no physician had made that determination. Patients were allegedly given a medical conclusion without the medical judgment behind it.

Tapestry and Creative Settlements Show the Payment Formula

Tapestry Hospice and Creative Hospice illustrate the same alleged payment formula: more referrals brought more compensation, and a failure to refer brought less. The Justice Department described monthly stipends and a signing bonus in each case.

The Tapestry health care kickback settlement announced in June 2024 was $1.4 million. It resolved allegations that payments to medical directors bought patient referrals. A former employee brought the qui tam case.

In June 2025, the department announced a $9.2 million settlement involving Creative Hospice Care. It again alleged compensation that increased with referrals and decreased without them. The settlement resolved whistleblower cases brought under the Homestead name, including the case behind the complaint passages above. A former employee who marketed Creative Hospice’s services to health care providers brought one of the whistleblower cases.

The repeated feature is the reason the amount changed: the alleged measure was patients sent. A contract promising medical oversight told only part of the story.

Associate and Backup Titles Can Carry the Same Payment

An associate or backup medical-director title can provide a place to put a referral payment on the books. The Compassionate Care Atlanta and STG settlements both addressed alleged arrangements in which the title concealed what the hospice was buying.

Compassionate Care Hospice Group agreed to a $2.4 million settlement in July 2017 concerning its Atlanta subsidiary. The government alleged payments to five physicians to induce referrals and certify patients as eligible. Those payments included compensation to a medical director in exchange for referrals and sham contracts with associate medical directors. Former employees brought the case.

The March 2020 settlement involving STG Healthcare of Atlanta was $1.75 million. The government alleged that a physician paid as a backup medical director did not serve as a legitimate hospice physician, while the hospice billed for the patients he referred.

Why a Physician’s Referral Base Has Value

A physician’s nursing-home relationships can bring a hospice access to a continuing patient stream. In its 2015 Good Shepherd Hospice settlement announcement, the Justice Department alleged that the company selected medical directors for their ability to refer, particularly their ties to nursing homes.

The Good Shepherd whistleblower complaint alleged that continued employment as a medical director depended on bringing in referrals.

Hospice’s payment model explains the attraction. Medicare pays for each enrolled day, including days without a visit. Care costs tend to be higher around admission and death, with a less expensive period between them. A referral can therefore bring a series of daily payments.

The Office of Inspector General examined that incentive in Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities, published in January 2015. Its analysis of Medicare claims from 2007 through 2012 found longer care and higher payments for beneficiaries in assisted living than in other settings. For routine home care in assisted living facilities, it put the visits beside the payment:

The finding helps explain the business value of a physician’s referral network: the patients sent can shape both the hospice’s revenue and the work required to earn it.

Physician Equity and Dividends Can Carry Referral Pay

Medical-director compensation can extend into company ownership and distributions. In the January 2021 Allstate Hospice and Verge Home Care settlement, the government alleged monthly directorship payments above fair market value for the services physicians actually provided.

The alleged benefits also included interests in Allstate sold to five physicians, substantial quarterly dividends, travel and sporting-event tickets. The settlement was $1,847,279. The government’s allegations involved both the Anti-Kickback Statute and the Stark Law in an arrangement spanning a hospice and a home health agency.

An employee handling ownership distributions may see referral pay that never appears in the medical-director compensation account. We examine what the physician received across the arrangement and what the business expected in return.

The 2017 Hospice Plus and Curo settlement showed another route through a physician business. The government alleged sham loans, a free equity interest, stock dividends and free rental space supplied to American Physician Housecalls as kickbacks.

Hospice Physician Charity Donations and Referrals

Hospice physician charity donations can carry payment for referrals through an organization the physician established. The recipient of the check can be the charity while the physician supplies the patients.

The Justice Department alleged that Vitas Health Corporation Midwest contributed $15,750 to the Swan For Life Cancer Foundation in return for 23 hospice referrals from the physician who established it. Vitas agreed to a $200,000 settlement announced in December 2016.

The alleged bargain turned a cancer charity into a way to pay for patients. Someone reviewing donations or marketing spending could see a payment that would never appear on the physician’s payroll.

What the Contract, the Books and the Patient Records Show

The strongest account connects the promised work, the actual payments, the referral decisions and the resulting Medicare claims. Those connections can be spread across finance, admissions and the clinical team.

The Homestead complaint supplied a particularly useful accounting comparison. Whistleblowers alleged that the Rock Hill, South Carolina agency’s financial statements showed $8,300 a month in medical-director spending, while the medical director’s contract provided for $2,400 a month.

A clinician may see that the review never happened. An admissions employee may know which physician sent the patient. A finance employee may see the payment change. Each sees a different part of the same relationship. We connect that knowledge to the records showing who approved the arrangement and why it continued.

The signature itself can require closer examination. In a separate complaint against Curo Health Services, a whistleblower alleged that operations managers allowed staff to use the medical director’s login and electronically sign terminal-illness certificates without the doctor seeing the patient or reviewing the medical record. A physician’s name on a certificate can conceal who actually entered it.

The claims for the referred patients complete the connection to Medicare. We trace the payments and referrals to the government bills they produced.

Medical Director Kickbacks and Whistleblower Rewards

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Creative Hospice case, the Justice Department reported that three whistleblowers received more than $1.5 million collectively.

Physicians, finance staff and employees handling referrals may know why a contract was offered, which duties went unperformed or what caused a payment to change. Those are the details we work through with hospice whistleblowers when assessing a case.

When You Know What the Stipend Bought

If you know a medical-director contract bought referrals, speak with our whistleblower experts about the payments and the patients. We build your strongest case with you and bring in healthcare fraud whistleblower lawyers who understand physician compensation and hospice claims. We stay beside you from that first account through the case.