Hospice Referral Kickbacks: When Patient Referrals Are for Sale

Hospice marketing fraud can turn a medical director’s stipend, a facility’s free staffing or a recruiter’s promises into a way to buy patients and bill Medicare. The question is what someone received for sending the patient and which Medicare claims followed. If you know why a doctor’s pay changed when referrals stopped, or why a hospice picked up a nursing home’s expenses, you may know what the contract leaves out: what the hospice was actually buying.

What a Hospice Referral Kickback Buys

A hospice referral kickback buys influence over where a patient goes. The benefit can reach a physician, a marketer, a facility, an employee who steers referrals or the patient being recruited. Cash is only one way to pay. A salary for duties that nobody performs, free services or a contribution to a referring physician’s charity can carry the same bargain.

Buying referrals is a form of hospice fraud that can reach claims for patients who really did need hospice care. The money arrangement and the patient’s prognosis are separate parts of the case. In the civil settlements below, the Department of Justice alleged that payments to referral sources caused false claims. Taxpayers fund the claims, while patients face health care decisions influenced by someone else’s payment.

The useful map follows the benefit all the way through:

Why the Referral Is Valuable

Medicare pays for routine hospice care by the enrolled day, including days without a visit. The hospice receives payment for a package of care related to the terminal illness, including services, drugs, equipment and supplies. Its costs tend to be greater at admission and near death, with a less expensive stretch in between. A referral can bring a stream of payments whose length matters as much as the first admission.

The care setting matters too. In its study of Medicare claims from 2007 through 2012, the Department of Health and Human Services Office of Inspector General found longer hospice stays and higher payments for assisted-living residents than for beneficiaries in other settings. Its summary put the payment and the visits side by side:

The payment kept coming even when no one visited. That is the financial attraction of a long stay, and why a facility full of potential patients matters to a hospice.

Medicare’s routine payment has a higher early rate and a lower later rate. It still pays by the day. Continuous home care, by contrast, pays according to qualifying hours of crisis care. General inpatient care and inpatient respite have their own daily rates. An arrangement that promises a facility extra staffing can therefore reach both the referral decision and the level of care billed afterward.

Do Doctors Get Kickbacks for Referrals?

Yes. The government has alleged that hospices paid medical directors monthly stipends and signing bonuses for referrals. In those cases, compensation allegedly rose when more patients arrived and fell when referrals stopped.

Tapestry Hospice of Northwest Georgia agreed to a $1.4 million settlement in 2024. A former employee started the whistleblower case. The government alleged that monthly stipends and a signing bonus induced medical directors to send patients to Tapestry, with compensation increasing or decreasing according to referrals. The government also alleged that the arrangements caused false claims.

Creative Hospice Care’s $9.2 million settlement in 2025 described the same alleged pattern. The employee whose complaint began the investigation had marketed Creative’s services to healthcare providers. That role matters: the person building referral relationships could see what the company was offering to obtain them.

The invoice may call it medical director work. The person approving the payment may know that the amount depended on patients sent. When referrals stop and the pay falls, that person can explain what management was buying.

The medical-director title also puts the physician near the certification decision. When payment buys referrals and clinical judgment is compromised, the compensation file and the patient file can describe different parts of the same arrangement.

Free Services Can Buy a Facility’s Referrals

A hospice can buy a referral by taking an expense off the facility’s books. The benefit need never appear on an invoice as a referral fee. Free staff, discounted services and excess payments were among the suspect nursing home arrangements identified in the inspector general’s 1998 hospice fraud alert.

HPH Hospice’s $1 million civil settlement in 2013 included allegations that it provided free services to skilled nursing facilities in exchange for referrals. The settlement also addressed alleged ineligible admissions, delayed discharges, misleading patient records and billing at higher rates than the hospice was entitled to receive. The allegations reached both Medicare and Medicaid.

Someone familiar with the facility’s staffing can explain which costs the hospice was absorbing.

The inspector general’s enrollment audit also showed how room-and-board payments could give a hospice an advantage in recruiting nursing-home patients. The chain hospices OIG reviewed received only part of the facility’s rate from Medicaid but paid the facility the full amount it had received before hospice enrollment. Competing hospices that passed along only what Medicaid paid were at a disadvantage.

A whistleblower complaint involving LifePath Hospice describes how a staffing promise could get ahead of the patient’s needs. The whistleblower alleged:

The alleged promise was made to the facility administrator. The need for that level of care belonged to the patient. The referral relationship could determine the staffing commitment before a clinical need did.

Hospice Marketing Fraud Can Reward Longer Stays

Hospice marketing fraud can combine a misleading sales pitch with commissions that reward continued enrollment. The inspector general documented that combination in its 1997 audit of hospice enrollments. A nationwide chain had a large sales staff whose commissions depended on the length of a patient’s stay. Its marketing materials downplayed or ignored the terminal-prognosis requirement. The audit said these practices created a climate conducive to enrolling patients who were not terminally ill.

When the marketer’s earnings depend on how long a patient remains, the later payments matter as well as the referral payment.

External referral buying and internal hospice admission quotas reach different decision-makers. Referral payments reach people who send patients in. Census bonuses and admission targets put pressure on employees who decide whether to admit or retain them. In HPH’s case, the government alleged that management targets drove ineligible admissions while separate free-service arrangements bought facility referrals. An insider may see both pressures converge on the same patient.

Referral-Source Staff Can Receive the Benefit Personally

The person steering a patient can receive the benefit personally, outside the facility’s own agreement with a hospice. That makes the employee’s relationship with the hospice worth understanding alongside the institutional contract.

In a whistleblower complaint against Serenity Hospice and Palliative Care, the whistleblower alleged that the owner treated CareMore staff to dinners, concerts and limousine rides to keep the hospice in their good graces. The people receiving the hospitality worked at the referral source.

The same complaint alleged that Serenity executives wanted someone who would accept all CareMore referrals, and offered additional compensation inside the hospice to handle them. The alleged benefits reached the people maintaining the outside relationship and the person managing admissions inside. Expense approvals, correspondence and patient referral histories can explain how those parts fitted together.

A facility name on a referral form can conceal the personal relationship behind it.

A Physician’s Charity Can Receive the Money

A contribution can reach a referring physician’s interests without a check made out to the physician. The Department of Justice alleged that Vitas Health Corporation Midwest contributed $15,750 to the Swan For Life Cancer Foundation, a charity established by a referring physician, in return for hospice referrals. The company settled those allegations for $200,000.

In the government’s account, the charity received the contribution. The physician sent the patients. The alleged purchase of referrals ran through a donation, so looking only for checks made out to the physician would miss it.

Patient Inducements Can Hide the Enrollment

Hospice patient inducements can begin with promised household help while the hospice gains a patient to bill for. The Centers for Medicare & Medicaid Services describes offers of free cooking, cleaning and home health services in its Medicare Hospice Fraud Prevention Toolkit. People accept the offer without knowing they are being enrolled in hospice, and scammers bill Medicare in their names.

CMS describes recruitment through door-to-door visits, advertising, calls, texts and email. An intake employee may see the gap between what the recruiter promised and what the enrollment paperwork says. The sales pitch, the election paperwork and the resulting bills tell different parts of the same transaction.

The LifePath complaint alleged a more deliberate disguise: staff were instructed to avoid the word hospice around certain potential patients, hide their name tags and claim they came from a home health agency. The patient was being sold one service while the paperwork enrolled them in another.

This reaches the patient’s care as well as the government’s money. CMS says fraudulent billing can leave medical records inaccurate and delay or prevent care. Hospice itself is a serious treatment choice: the Medicare benefit is for someone whose life expectancy is six months or less if the illness runs its normal course, with care focused on comfort instead of curing the terminal illness. Selling household help while quietly enrolling someone makes that choice for them.

An Eligible Patient Can Still Be a Bought Referral

An eligible patient can still arrive through a bought referral. The payment for that referral and the clinical reason for admitting the patient raise different questions.

For hospice eligibility fraud, the clinical record explains why the patient was admitted or recertified. The HPH allegations included instructions to make patients appear eligible in their medical records and procedures that discouraged discharge. The relevant story is what staff saw, what they wrote and what management told them to do with those observations.

For hospice billing fraud, the billed care level and services have to connect to the patient’s needs and the care delivered. General inpatient care and continuous home care bring different payment requirements from routine care. A staffing promise to a referral source and the staffing actually supplied can therefore matter to the billing account as well as to the referral account.

What Evidence Is Needed to Prove Fraud?

Proof of a hospice referral kickback connects the benefit to the patients and the claims. Our whistleblower experts work through that connection with you, including what the payment was called, what work actually happened and who made the decisions.

The person who approved a payment may know why it changed. An intake coordinator may know who insisted that a referral be accepted. A nurse may know what the patient needed and what the chart was later made to say. A biller may know which services and dates reached Medicare. Internal messages and compliance findings can connect those separate views to the people who made the decisions.

That is the value a hospice fraud whistleblower brings: the explanation behind records that otherwise sit in separate parts of the business. A qui tam case under the False Claims Act can pay the whistleblower 15% to 30% of what the government recovers.

You Know What the Hospice Was Buying

If you worked in hospice marketing, intake, billing or a referring facility, speak with our whistleblower experts about the referral arrangement you know. We build the case around what the hospice was buying and what you saw, with hospice fraud whistleblower lawyers who know referral kickback cases. We stay your partners from that first conversation through the case.