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Hospice Owner Charged with Medicaid and Medicare Fraud

Hospice Owner Took Patients Who Were Not Dying, Charged with Medicaid and Medicare Fraud

medicare fraudThe owner and proprietor of a hospice service in Illinois has been charged with Medicaid and Medicare fraud for overbilling the federal government and taking patients who were not actually dying.

Federal prosecutors allege that Seth Gillman, 45, administrator for and co-owner of Passages Hospice, LLC, provided hospice care for patients who did not need it, so that he could receive higher reimbursements from Medicaid and Medicare. According to a statement from US Attorney Zachary Fardon’s office, Gillman provided care for “some patients who did not have terminal illnesses or who were enrolled far longer — sometimes for several years — than the required life expectancy of six months or less.”

The criminal Medicaid/Medicare fraud complaint was filed January 24th.

The complaint alleges that Gillman trained Passages’ nurses to look for signs that would qualify a patient for general inpatient hospice care. Passages does not provide hospice care in a specific location, but instead offers in-home or nursing home services, in which a hospice nurse goes to the patient, rather than having the patient transferred to a hospice location.

Mr. Gillman was able to inflate his prices by using “general inpatient hospice care” as a recommendation – Medicare reimbursements for that classification are $671.84 per patient per day, while more routine care in a patient’s home is just $151.23.

Prosecutors also allege that Gillman paid himself $830,000 in bonuses between 2006 and 2011.

Federal requirements for hospice care say that the patient must be diagnosed both by his or her physician, as well as the hospice’s physician, as having a life expectancy of six months or less. Some hospices will provide services for longer because of misdiagnosis.

Between 2006 and 2011, Passages was paid $95 million from Medicare and $30 million from Medicaid for 4,769 patients. Passages’ patient survival rate for longer than six months was higher than the national average – most hospices average about 11.8% patients who survive longer than 6 months, while Passages had 22% survival.

Prosecutors do not estimate the potential fraudulent billing amounts in the complaint, but did say that a physician who reviewed 13 patient files for the government found 9 cases where the patient was not eligible for Medicare hospice benefits. In those cases, Passages improperly billed for 503 days of general inpatient care.

Gillman was charged with one count of healthcare fraud and one count of obstructing a federal audit. If convicted of the charges, he faces a maximum sentence of 10 years in federal prison for the healthcare fraud charge, and 5 years for the obstruction charge. Each charge also carries a potential $250,000 fine.

The Strom Law Firm Can Help Protect Medicaid and Medicare Fraud Whistleblowers

If you are personally aware of a fraud that has been committed by your current or former employer, a competitor or otherwise, from tax evasion to Medicaid and Medicare fraud, contact the Qui Tam attorneys at the Strom Law Firm today for a no cost consultation to discuss the facts of your case and whether filing a qui tam may be appropriate. We understand the complexity of the False Claims Act, and can help you with your case. We offer free, confidential consultations so contact us for help today. 803.252.4800.

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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