AJC Watchdog: First Alert

Keeping watch on those who hold the public trust and money

Did hospice know patients weren't dying? Jurors will decide

An eye-popping $200 million is at stake when jurors Wednesday take up the question of whether a national hospice company knowingly defrauded taxpayers by billing Medicare for patients who weren't dying.

Now, the jurors must decide, essentially, if the company knew the claims were false or didn't care to figure that out. If the jury decides against the company, it is liable for three times the damages the federal government sustained - potentially the biggest ever penalty for a hospice company. The whistle-blowers would get some of that money.

Justice Department attorneys called the company's claims "reckless and repeated (yet lucrative) business practices that resulted in the loss of millions of taxpayer dollars." The department also has pointed out that when patients go on hospice, they give up regular medical care that might cure their illnesses.

AseraCare asked Judge Karon Owen Bowdre to set aside the jury's verdict on whether the claims were false, saying that wasn't legally sufficient evidence. Predicting when someone will die, they said, isn't an exact science. The company, which operates 60 facilities in 19 states, also wants the judge to throw out the government's exhibits calculating the amount of the loss because the expert witnesses wasn't properly disclosed. It was "trial by ambush," the company argued.

Across the nation, the Justice Department has been targeting hospices with civil fraud lawsuits. The Medicare hospice benefit is for patients with less than six months to live, but patients at some of the targeted facilities had hospice care for years.

The case is being closely watched by the hospice industry.

The root of the problem, said Perry Farmer, founder of Crossroads Hospice, which has facilities in the Atlanta area, is not whether or not someone is dying but rather the payment system for hospice care. Hospices are paid a per diem depending on the level of care - not for each service that is rendered. But he said the government should have measures for the quantity and quality of care. That will discourage hospices from cherry-picking patients who don't need many services and also prevent patient dumping, where hospices "knee jerk and dismiss patients who get too expensive," he said.

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About the Author

Lois Norder is Senior Editor for Investigations in the newsroom at The Atlanta Journal-Constitution.