Health Law Highlights

The Risk of Criminal Charges in Hospice Fraud Cases

From Hospice News, by Holly Vossel:

Hospice providers face significant regulatory risks related to False Claims Act (FCA) violations, with potential criminal charges in instances of suspected fraud, waste and abuse. While most FCA cases don’t result in criminal charges, the resolution process can be complex and challenging for providers.

The burden of proof in most civil hospice fraud cases is relatively low, making it easier for the government to establish evidence of wrongdoing. However, the burden of proof in federal criminal fraud investigations is higher, requiring evidence of intent to defraud and willfulness.

Fraud cases can result in severe penalties for hospice owners, including prison sentences, heavy fines, revocation of Medicare certification, and being barred from the industry. An example is the case of Dr. Shiva Akula, former owner of Canon Healthcare, who was convicted for FCA violations totaling nearly $47 million.

Regulatory oversight of the hospice industry has increased due to concerns about fraud, waste, and abuse. This has been driven by the proliferation of new hospices and fraudulent billing practices. The Centers for Medicare & Medicaid Services (CMS) has implemented a “36-month” rule forbidding any change in majority ownership during the 36 months after initial Medicare enrollment.

The hospice industry is experiencing a surge in audit activity, with providers focusing more on documentation to prove patient eligibility and medical necessity of services. While increased audits do not necessarily indicate fraud, a high prevalence of billing errors can signal potential wrongdoing to regulators.