Passages Hospice in Illinois: When Higher Care Levels Paid Bonuses

In the Passages Hospice Illinois fraud case, the government alleged that the company billed for general inpatient hospice care patients did not need. Its account connected higher payments with management bonuses, nursing-home arrangements and patient files changed for an audit. Taxpayers bore the cost of the alleged hospice fraud: higher bills for care patients did not need. The money followed health care and referral decisions before a claim reached Medicare.

What Are the Criteria for a GIP Hospice?

General inpatient hospice care covers pain control or symptom management that cannot be managed in another setting. The need for that level of care is separate from the terminal prognosis that qualifies someone for hospice in the first place.

Medicare hospice requires a doctor to certify that the patient likely has six months or less to live if the illness runs its normal course. Admission and recertification concern that prognosis. General inpatient care, usually called GIP, concerns the patient’s need for more intensive care on the days billed.

The financial incentive was substantial. In its review of general inpatient billing, the Department of Health and Human Services’ Office of Inspector General put Medicare’s 2012 daily payments at $672 for GIP and $151 for routine care. Those historical rates show what the higher designation was worth during the Passages period.

Medicare pays routine hospice care by the enrolled day, including days without a visit. Billing at a higher level of care changes the payment attached to that day. The clinical reason for the higher rate belongs in the patient’s record, and the billed days have to follow that need.

What the Billing and Patient Files Showed

The government described a sharp rise in Passages’ average monthly GIP payments, from $4,437 during mid-2006 through mid-2008 to $946,743 in 2011.

Its claims-data analysis also described approximately 22% of the company’s patients between 2006 and late 2011 receiving more than six months of hospice care, including 28 patients with more than 1,000 days.

The physician’s certification, the nurse’s observations and later reassessments show what supported continued care. For GIP billing, the additional question is what symptoms required the higher level on the particular days claimed.

An employee who knew the patient can explain what those records mean. A nurse may remember an assessment that did not match the care designation. A billing employee may recognize that the designation continued across successive claims. Connecting those views brings the patient’s actual care back into an account otherwise expressed as days and dollars.

How Bonuses Reached the Care Decision

The government described Passages’ bonus arrangements as tying compensation to placing patients at the more expensive level. The roles matter because the people directing clinical work could also benefit from the designation that raised the bill.

The Owner’s GIP Bonus System

The government described an owner’s bonus system that encouraged nursing directors and assistant nursing directors to place patients on GIP when they did not need it. The owner rewarded himself, too: he authorized $833,375 in bonuses to himself between March 2009 and April 2011.

The bonus formula tells employees which result management wants. The patient assessment tells them which level the patient needs. Where those pull in different directions, the instructions to staff become part of the billing story.

The Nursing Supervisor’s Higher-Care Bonuses

The government reported that the director of certified nursing assistants received more than $300,000 in bonuses from 2009 to 2012 based on the number of patients placed at the higher level of service. The compensation reached nursing supervision, where instructions could affect how staff described a patient’s condition.

A separate whistleblower complaint against Agape Senior Community shows the kind of direction a nurse might receive. The whistleblowers alleged that staff were told to prolong GIP by moving to another diagnosis:

The allegation puts the desired billing result ahead of the clinical explanation. In a case about care-level pressure, the employee who heard the instruction can explain why a chart changed and who wanted the change.

What Happened When the Audit Asked for Files

The government also described Passages altering patient files requested by TrustSolutions, a Medicare audit contractor. The requests covered August and September 2009 and another round in 2010.

An audit depends on the history the provider gives it. If staff change that history for the reviewer, the submitted file can tell a different story from the one the nurse recorded while caring for the patient. The original entry, the changed entry and the instruction to revise it connect the clinical work to the response management wanted the auditor to see.

Someone who worked on the audit response may know which files were selected, who reviewed them and what staff were told to replace. That knowledge can explain how unsupported care became supported on paper.

The Marketing Head’s Gifts to Nursing-Home Staff

The government reported that Passages’ head of marketing offered nursing-home staff event tickets, electronic music players, televisions and gift cards for referrals. The gifts reached people positioned to send patients to the hospice.

The government separately alleged payments to nursing homes: approximately eight facilities had arrangements in 2010 under which Passages paid $250 for each patient-day of GIP. A gift tied to a referral and a facility payment tied to the billed level create different incentives. One rewards sending the patient. The other keeps paying as higher-level days accumulate.

Payments for hospice referrals operate in a market where nursing homes can limit which hospice providers they allow to serve residents.

Passages also had a connection to Asta Healthcare Company, which operated Asta Care Center nursing homes: a Passages owner was Asta’s agent and secretary. Passages’ billing records showed patients admitted to Asta nursing homes.

Access to residents can be valuable even before a hospice bills a higher level of care. In its 2015 study, Medicare Hospices Have Financial Incentives To Provide Care in Assisted Living Facilities, the Inspector General found longer hospice stays and higher payments in assisted living facilities than in other settings, often for diagnoses requiring less complex care. The report captures the attraction:

The Passages allegations add a payment directly tied to GIP days.

The Same Care-Level Problem in a Civil Case

Covenant Hospice agreed to a $10,149,374 settlement announced in June 2015 over allegations that it billed general inpatient care when routine home care was appropriate. The Justice Department said the medical records did not support the need for the higher level.

The comparison makes the civil whistleblower issue concrete. The question reaches beyond whether a patient belongs in hospice. It also reaches what the provider charged for that patient’s care and what the clinical record supported.

The Inspector General’s national review found the same billing problem across providers. Its March 2016 report projected $268.1 million in improper GIP payments for 2012, representing 26% of spending on that level. Hospices commonly billed GIP when patients had no uncontrolled pain or unmanaged symptoms.

How Do You Identify Hospice Fraud?

Hospice insiders may recognize fraud in pressure to assign unnecessary GIP, payments for referrals or patient files rewritten for an audit. In the Passages account, the bonuses and facility arrangements explain why the designation mattered to people beyond the billing department.

Different hospice insiders see different parts. Nursing staff know the symptoms and the care. A supervisor may know the bonus formula and the instructions passed to the team. Marketing staff know what was offered for referrals. Billing and audit staff can connect the care designation to claims and the versions of the file sent outside the company.

Our work is to connect that firsthand knowledge to the false payments and the decisions behind them. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw How the Care Level Was Chosen

If bonuses, referral gifts or rewritten patient files shaped the GIP billing you saw, speak to one of our whistleblower experts about how the care level was chosen. We work with you to build your strongest hospice whistleblower case around those healthcare decisions. We bring in hospice fraud whistleblower lawyers who understand clinical records and Medicare billing, and stay beside you through the case.