Hospice, home healthcare owners paying for fraud allegations

Healthcare fraud allegations have led to a settlement for a hospice and jail time and more than $1 million in financial implications for the owner of a home healthcare agency, according to the U.S. Department of Justice (DOJ).

Hospice of the Comforter Inc. of Altamonte Springs, FL, has agreed to pay $3 million to resolve allegations that from December 2005 to December 2010 it submitted false claims to Medicare for services provided to patients who were not eligible for the Medicare hospice benefit. And the Farmington Hills, MI, owner of Quantum Home Care was sentenced to 60 months in prison and more for his role in a $13.8 million Medicare fraud scheme.

Hospice of the Comforter “allegedly directed its staff to admit all referred patients without regard to whether they were eligible for the Medicare hospice benefit, falsified medical records to make it appear that certain patients were eligible for the benefit when they were not, employed field nurses without hospice training, established procedures to limit physicians’ roles in assessing patients’ terminal status and delayed discharging patients when they became ineligible for the benefit,” according to the DOJ.

The allegations arose from a lawsuit filed by a former hospice employee, Douglas Stone, under the whistleblower provisions of the False Claims Act. As part of the settlement, the hospice has agreed to enact procedures and reviews to quickly detect and prevent conduct similar to what was cited in the case, United States ex rel. Stone v. Hospice of the Comforter Inc. Also, the hospice’s former chief executive officer, Robert Wilson, has agreed to a three-year voluntary exclusion from Medicare, Medicaid and other federal healthcare programs. 

“Hospice care is a sacred trust from which no provider should fraudulently profit,” U.S. Department of Health and Human Services Inspector General Daniel R. Levinson said in a press release. “Claiming tax dollars for people who are not terminally ill—and therefore ineligible for hospice care—cannot be tolerated.”

In a statement on the company’s website, Jo Simonini, chairman of the hospice’s board, said, “Since the very beginning, we have been proactively cooperating with the government and elected to settle this matter without the admission of any liability because we believe that doing so is in the best interest of our patients, families, employees and community.”

Quantum Home Care’s owner, Javed Rehman, has been sentenced to 60 months in prison and two years of supervised release, and he also has been ordered to pay $1.7 million in restitution with his co-defendants, Tausif Rahman and Muhammad Ahmad. The sentence stems from Rehman’s July 12 guilty plea to one count of conspiracy to commit healthcare fraud.

The three men purchased the home health agency in mid-2009, according to the DOJ, citing court records. “Rehman paid kickbacks to recruiters to obtain Medicare beneficiary information used to bill Medicare for home health services—including physical therapy and skilled nursing services—that were never rendered,” the DOJ said in a news release.

As administrator of Quantum, the justice department said, Rehman submitted false and fraudulent claims to Medicare based on falsified files created by his co-conspirators. Medicare subsequently paid the company $1.7 million for physical therapy and skilled nursing services purportedly rendered between mid-2009 and late 2011. This amount was part of a total of $13.8 million that Medicare paid Quantum and three additional home healthcare companies acquired by Rahman and Ahmad between 2008 and 2009.

Ahmad pleaded guilty to one count of conspiracy to commit healthcare fraud and is scheduled to be sentenced May 14. Rahman pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of money laundering. He is scheduled to be sentenced May 21.

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Lois Bowers

Lois A. Bowers was senior editor of I Advance Senior Care / Long-Term Living from 2013-2015.