Hospice Plus: Sham Loans, Free Staff, and Paid Referrals

In the Hospice Plus lawsuit, the hospice companies agreed to pay $12.21 million to settle allegations that they bought patient referrals with sham loans, free rent, cash and gifts. The whistleblowers’ complaint puts those arrangements inside the business: a marketer paid for each referral, a chair offered to a patient, and a full-time aide offered to a facility that could send more patients. The alleged bargain put honest hospices at a disadvantage and left Medicare and Texas Medicaid paying for care obtained through bought referrals.

The Department of Justice announced the settlement on April 18, 2017. It said Hospice Plus, Phoenix Hospice and Goodwin Hospice submitted claims to Medicare and Texas Medicaid that became false because of kickbacks. Several whistleblowers brought the allegations.

This hospice fraud case followed the money used to bring patients in.

The Companies Behind the Hospice Plus Name

Hospice Plus and its owner, Curo Health Services, were among the companies that settled. At the time of the announcement, Curo operated eight hospice affiliates across 18 states.

Curo purchased Hospice Plus, Goodwin Hospice and Phoenix Hospice in September 2010 and consolidated them under the Hospice Plus brand. The government’s announcement described that brand as operating primarily in and around Dallas, Texas, and Curo as headquartered in Mooresville, North Carolina.

Sham Loans, Equity, Dividends and Free Rent

The first alleged arrangement bought referrals from American Physician Housecalls, a physician housecall company, from 2007 through 2012. The government described sham loans, a free ownership interest in another entity, stock dividends and free rental space supplied in exchange for referrals to the hospices.

That is a broader financial relationship than a payment handed over for a single patient. An ownership interest and dividends put value into the relationship through the business itself. The government’s allegation was that these benefits purchased access to patients.

The forms of payment matter to an insider. Someone handling a loan, a lease or an ownership distribution may see a different part of the arrangement from the person receiving the referrals.

Do Doctors Get Kickbacks for Referrals?

Doctors were among the referral sources the government alleged Hospice Plus, Phoenix Hospice and Goodwin Hospice paid with cash, gift cards and other valuable items. This second alleged scheme ran from 2007 through 2014 and also reached nurses, hospitals and long-term care facilities.

The whistleblowers’ amended complaint describes how these exchanges allegedly worked. It alleged that marketers were instructed to give more expensive gift cards to facility administrators and directors of nursing, and less expensive cards to charge nurses and nursing staff. It also described meals, happy hours and free manicure-pedicure events for referral sources.

A Chair in Exchange for Choosing Hospice Plus

The complaint alleged that a nurse marketer offered free power-lift chairs to debilitated patients in exchange for choosing Hospice Plus over another hospice. It described about four or five occasions from 2009 to 2012. Once a patient agreed, the marketer would call an executive to arrange delivery.

The alleged bargain reached the patient directly: choose this hospice and receive the chair. The complaint also said the chair offers encouraged facilities to send other patients with the same need. A patient gift could therefore help bring in more than the patient receiving it.

An Aide Until the Referrals Fell Short

Hospice Plus allegedly offered facilities extra staff in return for more referrals. The complaint described nurses and certified nurse’s aides helping with facility work, including care for patients who were not enrolled with Hospice Plus. It stated the referral condition plainly:

The complaint then described a specific example at The Forum at Park Lane, an assisted living and skilled nursing facility. Hospice Plus allegedly supplied a full-time aide and later told the facility it needed eight Hospice Plus patients to keep that aide. Reaching fourteen would bring a second full-time aide. When the facility failed to reach the lower target, the complaint alleged, an executive pulled the aide out.

In that account, the extra aide went away because the referrals fell short. The person arranging shifts could see the same bargain that the marketer was selling.

A Salary With a Price Attached to Each Referral

The complaint alleged that the nurse marketer became a part-time employee at $30,000 a year, with a $250 bonus for each patient referral. It also described a monthly referral target and bonus payments tied to meeting it.

Cash could pass through the marketer as well. In a meeting with a care manager at a nursing staffing agency, an executive allegedly offered cash for referrals and told her she could collect the money from him or have the marketer deliver it. The alleged payment system reached people outside the hospice who could direct patients to it.

Why Facility Referrals Were Worth Buying

Medicare pays routine hospice care by the enrolled day, including days without a visit. For a facility sending patients who meet the hospice eligibility standard, each referral can start a stream of daily payments. A facility relationship can bring repeated referrals, while the cost of serving those patients depends on the care they need.

The HHS Office of Inspector General examined the economics in its January 2015 study, Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities. Reviewing Medicare hospice claims from 2007 through 2012, it found that beneficiaries in assisted living received hospice care for longer and generated higher payments than beneficiaries in other settings. Its findings included this comparison:

The study explains the financial attraction of the facility channel. The Hospice Plus complaint supplies the alleged bargain within it: labor for the facility, referrals for the hospice, and government payments for the enrolled patients.

Hospice referral kickbacks can make resulting Medicare claims false even when the patient received appropriate hospice care. Here the allegation concerned how the hospice obtained the referral. The payment relationship deserves attention alongside the patient’s chart.

The same connection between compensation and referrals appeared in Tapestry Hospice’s June 2024 settlement. The government alleged that medical directors’ compensation rose when they referred more patients and fell when they failed to refer. A payroll title tells less than the condition attached to the pay.

The Whistleblower Cases

The whistleblowers started the cases that brought the alleged arrangements to the government. 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?

In a hospice kickback case, evidence connects the benefit offered to the patient referral and the referral to a Medicare or Medicaid claim. We examine those connections and who approved the arrangement. The Hospice Plus allegations make those connections concrete: business benefits for a referral company, an aide tied to a facility’s patient count, and compensation tied to a marketer’s referrals.

The complaint also alleged that the nurse marketer helped billing staff obtain signed physician orders needed to support claims. That puts marketing and the billing records in the same story. A person who knows why a payment was made may also know where the referred patient’s claim went.

For hospice fraud whistleblowers, that knowledge can connect an expense in the accounts to the decision behind it. We work with you to identify what your view of the business adds to the case.

You Know What the Payment Was For

If you saw staffing, gifts or business payments depend on hospice referrals, speak to one of our whistleblower experts about the arrangement. We build the case with you and bring in hospice fraud whistleblower lawyers who understand referral payments and healthcare billing. We stay beside you as the case moves from what you saw inside the business to pursuing a recovery.