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Hospice Companies To Pay $12.2 Million To Settle False Kickbacks

April 19, 2017

DALLAS – April 18, 2017 – In a massive kickback scheme, International Tutoring Services, LLC, f/k/a International Tutoring Services, Inc., and d/b/a Hospice Plus; Goodwin Hospice, LLC; Phoenix Hospice, LP; Hospice Plus, L.P.; and Curo Health Services, LLC f/k/a Curo Health Services, Inc. have agreed to pay $12.21 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for patient referrals, announced U.S. Attorney John Parker of the Northern District of Texas.

If the national average of collection on health care fraud is correct with a $1 cost to collect $6, the price to collect $12 million is $2 million. While, in theory, it is a valid return on investment, if more strategy, time and investment were put into play on behalf of a gatekeeping strategy that effectively kept fraudsters out of the system in the first place and committing kickback fraud.

“Scamming the health care system is endemic and drives up the cost of health care, eliminating fraud would be a giant step toward achieving Congress’ goal of affordability,” says John Benson, Verisys CEO. “It would require massive changes to existing flawed systems and challenging the CMS contractors whose very expensive systems just add more cost by engaging in the pay and chase game.

John Benson continues, “We need to have an honest discussion about prevention and it starts with a solid gatekeeping and monitoring strategy, something that Verisys delivers in the commercial sector today. The government needs to stop spending money on magic bullets and start applying common sense solutions.”

Curo Health Services is headquartered in Mooresville, North Carolina and operates eight hospice affiliates across 18 states. In September 2010, Curo Health Services purchased Hospice Plus, Goodwin Hospice, and Phoenix Hospice, and consolidated the hospice companies under the Hospice Plus brand, which operates primarily in and around Dallas, Texas.

The settlement resolves allegations brought by several whistleblowers that Hospice Plus, Phoenix Hospice, and Goodwin Hospice submitted claims to Medicare and Texas Medicaid that were rendered false as a result of the payment of kickbacks through a kickback scheme by the hospices, its owners and employees, and others.

There were two alleged kickback schemes. First, from 2007 through 2012, kickbacks were allegedly paid to American Physician Housecalls, a physician housecall company, in exchange for patient referrals to these hospice companies. The alleged kickbacks took the form of sham loans, a free equity interest in another entity, stock dividends, and free rental space.

Second, from 2007 through 2014, kickbacks were allegedly paid to medical providers, including doctors and nurses as well as hospitals and long-term care facilities, in exchange for patient referrals to these hospice companies. The alleged kickbacks took the form of cash, gift cards, and other valuable items.

We will not tolerate the payment of illegal kickbacks, which unjustly drive up the cost of health care,” said U.S. Attorney Parker. “Any health care provider who seeks to profit illegally at the expense of federal beneficiaries and taxpayers will face consequences.”

The allegations resolved by this settlement were raised in two consolidated whistleblower lawsuits in Dallas, Texas. The lawsuits were filed under the qui tam provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. In settling this matter, Curo Health Services did not admit any wrongdoing or liability.

In addition to reaching a settlement with these defendants, the United States also requested that the Court permit the United States to intervene in and prosecute the fraud claims against two former executives, Dr. Bryan White and Suresh Kumar. The case is captioned United States ex rel. Christopher Sean Capshaw, et al. v. Bryan K. White, et al.; Civil Action No. 3:12-cv-4457 (N.D. Tex.).

The Office of Inspector General of the U.S. Department of Health and Human Services and the FBI assisted in the investigation of this matter. The case is being handled by Assistant U.S. Attorneys Lindsey Beran and Kenneth Coffin.

Juliette Willard Written by Susen Sawatzki
Healthcare Industry Expert
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