U.S. Goes After National Hospice Chain for Allegedly Swindling Medicare

The US has filed a complaint in a whistleblower suit against AseraCare Hospice, the Department of Justice announced on Jan. 3, alleging that the hospice provider misspent millions of taxpayer dollars intended for Medicare patients who qualify for hospice care through a prognosis of six months or less to live.

“When a business admits a Medicare recipient to hospice care, that individual is no longer entitled to receive services that would help to cure his or her illness,” the DoJ said in a statement. “Instead, the individual receives what is called palliative care, or care that is aimed at relieving pain, symptoms or stress of terminal illness, which includes a comprehensive set of medical, social, psychological, emotional and spiritual services.”

The government alleges in its suit that the company, a for-profit business with approximately 65 hospice providers in 19 states, violated the False Claims Act by knowingly submitting false claims for Medicare dollars for providing care to patients who were not terminally ill.


“Medicare benefits, including the hospice benefits, are intended only for those individuals who are appropriately qualified,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama, in a statement. “We must protect the public welfare and tax-funded benefits programs.”

The original whistleblower suit was filed by Dawn Richardson and Marsha Brown, former AseraCare Hospice employees. The False Claims Act allows private citizens aware of fraud to file whistleblower suits on behalf of the US and to share in any recovery, according to the DOJ; now that the US has intervened, pending its ability to prove the defendant knowingly submitted false claims, it is entitled to recover three times the damage that resulted along with a penalty of $5,500 to $11,000 per claim.

“Congress intended that the hospice care benefit be used during the last several months of an individual’s life,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “We will continue to recover misspent Medicare funds from companies that abuse the hospice benefit.”


In response to the Department of Justice’s complaint, AseraCare Hospice’s general counsel David Beck said the allegations are “without merit” and that the company “operates in full compliance with the law.”

“Consistent with hospice providers nationwide, AseraCare Hospice has evolved in recent years to treat more terminally ill patients with unpredictable disease progressions,” said AseraCare Hospice President and Chief Medical Officer David Friend, M.D. “Each one of our hospice patients is in our care because two independent physicians have certified his or her eligibility and because the individual has made a decision to focus on care and comfort when a cure is not possible.”

The company also mentioned federal guidance that “there is no limit on how long an individual may receive hospice care as long as he or she meets eligibility criteria,” citing former Centers of Medicare and Medicaid Services administrator Nancy Ann DeParle, who wrote that “in no way are hospice beneficiaries restricted to six months of coverage.”

A previous SHN article looked into the $14 billion hospice industry’s large Medicare enrollment.

Written by Alyssa Gerace