Hospice Patients Alliance: Consumer Advocates


While many hospice professionals may not be aware of fraud occurring at their hospice agency, others may be in a position to see situations that just don't seem "right." When you are informed about the regulations governing hospice care, you will view the way patients and their families are treated in a different light. Knowing the regulations, you will recognize immediately when your agency steps across the line. Hopefully, you will never have to deal with this situation, but others may be confronting this type of situation right now.

The individual staff member most able to determine if fraud is occurring in a hospice agency depends upon the type of fraud occurring. Fraud related to an improper denial of required and needed services would be known to the nursing staff, especially the RN case managers. Fraud related to improper billing practices may only be known to office staff in the billing departments.

Government investigators target intentional fraud,
not billing errors

Often, healthcare professionals will tell each other, "Don't report this," or " don't make a complaint about that [fraud] because if you do, the government will shut down the agency and you'll lose your job." Is this true? Well, how many hospice agencies do you know that have been shut down in the USA? Name five. Can't? Well, name four, or three or two. The fact is, the federal government is not in the business of shutting hospice agencies down. They simply want to stop agencies from fraudulently collecting money for services or equipment they don't provide.

The U.S. Office of Inspector General reports that:

".... in recent years, both State and Federal prosecutors have increasingly relied on civil remedies to achieve a full resolution of health fraud cases."

- written by Frank Nahlik, Assistant Inspector General for Investigation, Oversight and Support, (in the OIG June 2000 Annual Report on State Medicaid Fraud Control Units, page 42 available at: http://www.hhs.gov/oig/oi/mfcu/index.htm ) [emphasis added]

This means that if possible, the prosecutors are increasingly accepting settlement payments where agencies pay back what they fraudulently took from Medicaid or Medicare. The government may require plans of correction to prevent the fraud from occurring in the future, and certain individuals who were most responsible may lose their position and face fines, but the government's goal is not to shut down hospice agencies!

The federal government budgets money for health care services to those who need it. The government doesn't want to pay money to make white-collar criminals rich. Are hospice agency administrators who commit white collar crimes "criminals?" Certainly, and these administrators give hospice a bad name, and cause untold suffering for the patients and families who do not receive quality care.

So what is the policy of the federal government, in terms of enforcement and investigations? Let's consider what the head of the US Office of Inspector General says herself:

The following excerpt is taken from a letter to Mr. Dick Davidson of the American Hospital Association, dated June 26, 2000, and written by June Gibbs Brown, Inspector General for the Department of Health and Human Services of the U.S. The letter addresses concerns related to hospitals, but the excerpts below are general and apply to all healthcare agencies in the U.S.

".... First, as we have stated in the past, under the law, ...[health care agencies] are not subject to civil or criminal penalties for innocent errors, mistakes or even negligence. The Government's primary enforcement tool, the civil False Claims Act ("FCA"), covers only offenses that are committed with actual knowledge of the falsity of the claim, reckless disregard of the truth or falsity of the claim, or deliberate ignorance of the truth or falsity of the claim. The FCA simply does not cover mistakes, errors, or negligence. The other major civil remedy available to the Federal Government, the Civil Monetary Penalties Law, has exactly the same standard of proof. The OIG is very mindful of the difference between innocent errors and negligence ("erroneous claims") on the one hand, and reckless or intentional conduct ("fraudulent claims") on the other."

"When billing errors, honest mistakes or negligence result in erroneous claims, the ... [health care agency] will be asked to return the funds erroneously claimed, but without penalties. In other words, erroneous claims result only in the return of funds claimed in error. Nevertheless, inadvertent billing errors are a significant drain on the programs and all parties need to work cooperatively to reduce the overall error rate."

".... providers need to be especially vigilant in identifying erroneous claims. We believe an effective voluntary compliance program can help ... [a health care agency] identify erroneous claims, correct the underlying problems causing the erroneous claims and ensure that any overpayments caused by such erroneous claims are promptly returned to the Government. But again, it should be emphasized that civil or criminal penalty action will not be initiated for billing errors due to inadvertence or negligence." [emphasis added]

"Should a question of improper billing ... , as in all cases, in assessing whether there is sufficient knowledge to trigger civil or criminal penalties, the OIG will look at a variety of factors, including (1) the clarity of the relevant rule; (2) the complexity and novelty of the billing system at issue; (3) the guidance issued by HCFA [edit: now called Centers for Medicare Services (CMS)] and/or its agents (e.g., fiscal intermediaries); (4) the extent to which the provider has attempted to ascertain an understanding of the relevant rule; (5) the quality of the efforts of the provider to train personnel on the billing system; and (6) whether the provider has an effective compliance program in place. This list is merely illustrative in order to give your members an appreciation for the kinds of factors the OIG evaluates when investigating allegations of fraud and should not be construed as an exclusive list of factors."

"We hope that the foregoing has made it clear that the OIG's law enforcement efforts are not directed toward erroneous claims. Rather, they are focused on false or fraudulent claims that are submitted with the requisite level of intent or knowledge to trigger civil or criminal penalties." [emphasis added]

"Should you have questions or need of further assistance regarding this issue, please feel free to contact D. McCarty Thornton, Chief Counsel to the Inspector General, at (202) 619-0335."

June Gibbs Brown
Inspector General

The above excerpt is taken from a letter to Mr. Dick Davidson of the American Hospital Association, dated June 26, 2000, and written by June Gibbs Brown, Inspector General for the Department of Health and Human Services of the U.S. The letter addresses concerns related to hospitals, but the excerpts are general and apply to all healthcare agencies in the U.S. Emphasis and "[health care agency]" added.

Government prosecutors push for reimbursement,
not agency closure

So should hospice employees be fearful of reporting problems at their hospice? Definitely not. Why? Because simple errors in billing are not going to result in criminal charges being brought. Even when intentional fraud occurs in a hospice, the federal government simply orders the agency to pay back the overbilled money. This has happened numerous times, and the hospice agency continues to provide hospice care to the public. The U.S. government is actively promoting the availability of hospice services to the public.

The U.S. government does not want to shut any hospice down, and they haven't made a practice of doing so. Anyone who tells you they are going to shut the agency down is simply trying to get you to keep quiet and become an accomplice to the fraud. Did you know that if you have knowledge of fraud and don't report it, you are liable for criminal charges to be brought against you and your license?

Private insurance companies
seek reimbursement and cooperation

Fraud also occurs with respect to private insurance companies. If the patient's private insurance pays for the hospice services, the insurance company may be being defrauded. Each insurance company has its own "Fraud Investigation Units" which track down and find fraudulent claims by health care agencies who are billing for services not rendered. Fraudulent claims drive up the cost of health care insurance for all of us, in addition to being illegal. Reporting health care fraud to a private insurance company or the federal government can help keep health care costs down for everyone. When private insurance companies discover fraud, they normally seek a settlement with the hospice agency and simply require that the agency pay back the money fraudulently taken. It is rare for prosecutions to occur. Doubt that? Name one hospice agency prosecuted for defrauding a private insurance company. Hasn't made the news because hospice agencies settle behind the scenes when they're caught.

Employees are used as scapegoat
When agency fraud discovered

It is important to remember that it IS the practice of hospice agencies to blame the employees whenever the agency gets caught in a violation of standards or laws. If you want proof of that, request a copy of State inspection reports for any hospice that has been cited for violations of the standards of care (many have). You will always read that the hospice agency's plan of correction involves "re-education" and "increased training" for employees so that violations do not occur again. You will never read that the hospice agency states it will "re-educate or "re-train" the hospice top level administators themselves, because the hospice administrators will never admit officially that they themselves were the originators and perpetrators of the fraud!

Risk Management Departments

Ever wonder what "risk management department" managers do? Seem to be a "mysterious" bunch? Well, if you feel that way, you're not alone. Risk managers do just what the name implies: manage risk. But they manage risk to the hospice agency, not to the hospice employee. For example, many health care employers tell their employees, "we have company insurance for malpractice liability" so if any problem arises, our attorneys will take care of the case...you don't have to have your own health care liability policies."

Agency Malpractice/Liability Insurance
Protects the Agency, Not You

Well, guess what? Any time there is a serious risk of legal liability for a hospice or other healthcare agency, (due to fraud or malpractice) the agency will look for a scapegoat. Employees who commit serious errors or who can be blamed for serious errors that occur, are often terminated from employment. Then the agency's liability policies/attorneys protect the agency, not the former employee. That's the point to remember, if there's a major problem and the agency chooses to blame you, you will be the former employee, not a current employee.

So the liability/malpractice insurance for the agency may not cover your actions. The agency attorneys (insurance company attorneys as well) will protect the agency, whatever it takes, because that will save the insurance company and the agency lots of money. They may act to protect you if it is in the agency's best interests to do so, but if they do so, it will not be motivated by real concern about you. Actions taken in the "crisis" of being caught in fraud will be motivated totally by business considerations, i.e., what will save the agency the most money and reduce any other risk to the agency. Health care agencies have even been known to defend a malpractice case involving an employee and then turn around and sue their own former employee as the scapegoat to get the money back, and if you don't have your own insurance, then the bills could force you into bankruptcy, personally. The nursing journals often mention stories where employers did not stand behind the nurse. Make sure you don't become the scapegoat for your hospice agency.

You may ask, what happens if you have your own malpractice/liability insurance covering you and you alone? Well, the insurance company has its attorneys act to protect you so that the insurance company doesn't lose money on a settlement or judgment against you. Having your own malpractice/liability insurance gets you an attorney focused solely on what will reduce the loss to the insurance company and that translates into looking out for your best interests. However, it should be noted this type of insurance normally does not cover fraud or any criminal acts, so that if you are made the scapegoat and the insurance company believes you did commit fraud or were involved, they may not cover you or help you as expected.

Another concern some health care professionals have is that the insurance company may settle the case rather than going to trial, because it thinks that it will save more money by settling than by going to trial. If that occurs, a settlement is made and you have to live with that on your record. Doctors who get sued often have their malpractice insurers telling them to settle out of court and exert tremendous pressure on the doctors to settle, even though many times the doctor believes that he or she did nothing wrong. So there are different sides to the issue. If you have serious questions about these types of issues, it is advisable to contact a competent attorney for guidance.

The surest way to reduce "risk" to a hospice agency (after a problem or fraud is discovered) is to find a hospice employee to blame, someone who knew what was going on and was in a position to report it or stop it. The administrators won't mention that they themselves steered the employee in the direction of committing fraud; they're not that foolish. And do administrators outright "tell" employees to commit fraud? If they can do so, they will avoid telling the employee directly to commit fraud; really clever white collar criminals will instead maneuver employees into committing fraud for them, sometimes by misinforming them, or by telling them half truths. They will create the impression that committing fraud will benefit the agency and agency's mission. They may tell them that what the employee is doing is "perfectly legal" .... "we've checked this all out with the agency attorneys, and they assure us that this is perfectly legal."

However, if the agency is caught and an employee is questioned, if an employee tries to defend herself and states that, "they told me to do it" the administators will always deny it. Guaranteed! Who's left holding the bag, so to speak? ... the employee, of course.

So, you're not doing yourself or your family any favors by keeping quiet when you know about fraud. Ever hear of a health care professional getting their license yanked? It does happen, especially if a crime is involved. But have you ever heard of a hospice nursing manager or administrator losing her license? Let us know if you have, because we haven't. State Boards of Nursing will "go after" the lowly nurse who provides the care to the patients, but will block any attempt to have a nurse manager disciplined. Employees have lost their license and their jobs in such cases, while the agency and its nurse managers got off lightly with no serious consequences at all.

If you keep quiet when fraud occurs, you're betraying the very patients and families the hospice is supposed to serve. Fraud increases the financial burden of health care to every citizen of the U.S. And who benefits? The rogue administrators and corporate owners (for-profit corporations) who pay themselves handsomely when they live it up at the expense of the dying while the rest of society pays for that fraud.

Qui Tam Claims Enable You to Collect
A Reward: A Percentage of Money Recovered

You should also know that the government provides a very substantial reward to whistleblowers who help the government get their money back. If you report to the government about fraud at your employer and the government recovers the funds, you are entitled to a percentage of the money that you helped the government get back. However, in order to get that reward, you need to file what is called a "qui tam" claim using an attorney expert in such claims to guide you. You can find more information on "qui tam" claims at http://www.quitam.com or search for "attorneys" and "qui tam" on the internet.

Reporting violations of the regulations or law by the hospice you work at can be a difficult step for an employee to take. Yet, if you wish to live with a clear conscience with regard to society and to your patient care responsibilities, it may be necessary. Every single patient and family you deal with expect you to be truthful and to protect their best interests. If you were the patient, wouldn't you expect honesty and integrity from those who take care of you?

You can find information on how to report serious health care fraud below:

When hospices defraud the federal Medicare Program:

When hospices defraud the State Medicaid Program:

State Medicaid Fraud Control Unit Addresses

When hospices defraud Private Insurance Health Plans
or Managed Care plans, you can contact the private insurance company directly and ask for the address or telephone number of their "Fraud control unit," or call the National Health Care Anti-Fraud Association (NHCAA) at 202-659-5955 and ask them for the address and telephone number. You can also ask NHCAA for the telephone number and address by e-mail at: fraud@nhcaa.org. They are not set up to take the actual complaint at their site, but can give out the individual addresses and telephone numbers you need to report fraud committed by a hospice against a private insurance company. Their website is located at: www.nhcaa.org.

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