CINCINNATI (AP) -- The Department of Justice has sued Chemed Corp., saying it and its Vitas hospice business submitted tens of millions of dollars in false Medicare claims for patients who were supposed to be receiving emergency services.
The department says Vitas Hospice and Vitas Healthcare submitted claims for services that weren't needed, weren't provided, or were provided to patients who weren't eligible under Medicare requirements. It says the companies set goals for the number of crisis-care days to be billed and pressured their employees to submit more claims so it would get more revenue. The agency said Medicare payments for crisis care can be hundreds of dollars greater than typical hospice care payments.
Vitas is the largest U.S. hospice care chain, and Chemed said the claims go back to 2002, two years before it acquired the company. Chemed said it will fight the lawsuit "vigorously."
Shares of Chemed lost $14.27, or 17.5 percent of their value, to $67.52 in afternoon trading.
The Justice Department says Medicare reimburses hospice care for patients who are suffering from a terminal illness and who are expected to live six months or less if the disease progresses at its normal rate. Patients receiving hospice care are treated for pain and stress and symptoms but don't receive treatment for their illnesses. Those patients can get "crisis care" if they need immediate, short-term care from nurses or else hospitalization will be required.
The department says the crisis care rate is the highest daily rate a hospice can bill Medicare.
"The government contends that Chemed and Vitas violated the False Claims Act and misspent tens of millions of taxpayer dollars from the Medicare program," the department said in a news release.
Cincinnati-based Chemed said the government can seek statutory penalties, costs, and triple damages. Those are typically allowed in whistleblower lawsuits.
"Chemed and Vitas have made significant investments in controls, systems and procedures to uphold the highest industry standards and to maintain compliance with all regulatory requirements," the company said. "Our compliance efforts are designed to ensure our services are provided only to eligible patients."