Hospice Co. Pays $1.2M To Settle 2 Whistleblower Suits

February 9, 2018

Law360 (February 8, 2018, 9:45 PM EST) -- The federal government has settled two suits with a Pennsylvania hospice care provider for a total of $1.2 million to resolve allegations against the company that it knowingly admitted and kept patients who did not qualify for hospice care in order to bill Medicare and Medicaid for their long-term treatment, the government announced on Thursday.

Both whistleblower suits — one by a former nurse and one by two certified nursing assistants — alleged that Horizons Hospice LLC routinely admitted patients who were not expected to die within the next six months and therefore were not eligible for hospice care, but the company billed the government for their treatment anyway.

“Medicaid and Medicare are programs intended to provide care and assistance to the most vulnerable members of our communities, including seniors,” said U.S. Attorney Scott W. Brady in a statement. “Those who seek to defraud these programs will be vigorously pursued by my office. This settlement is another step forward in that fight.”

The government intervened in the suits against Horizons, which has since changed its name to Hospice 365, in October 2017.

The first suit, filed in 2012 by registered nurse Angela Thomas, estimated that 50 percent to 75 percent of the patients at Horizons’ Pittsburgh office while she worked there did not qualify for hospice care. The then-medical director, Oliver Herndon, “signed any form put before him,” Thomas alleged. Thomas stopped working at Horizons in October 2011.

In the second suit, nursing assistants Sue Mizak and Linda Wermlinger made similar allegations about the company’s practices for admitting patients and also described a number of other allegations, including a kickback scheme in which Horizons provided free medical equipment in exchange for patient referrals.

Robert Davant of Davant & Associates, attorney for Mizak and Wermlinger, told Law360 on Thursday, “I’m happy that the government stepped in and we were able to recover as much as we were. There was a lot of money missing, though.”

Davant estimated that the total fraud amounted to around $10 million.

Counsel for Horizons and Thomas did immediately not respond to request for comment on Thursday

Horizons’ Chief Operations Officer Mary Stewart pled guilty in 2016 to fraud related to the clinic’s habit of admitting patients who were not terminally ill and was sentenced to 15 months.

Herndon was later arrested and pled guilty to running a pill mill at a different clinic and was sentenced to seven years in prison.

The government is represented by David Lew, Paul E. Skirtich, Rachael L. Mamula, Colin J. Callahan and Michael A. Comber of the United States Attorney's Office, Western District of Pennsylvania.

Thomas is represented by Andrew Stone of Stone Law Firm LLC.

Mizak and Wermlinger are represented by Robert M. Davant of Davant & Associates.

Horizons is represented by Stephen Stallings.

The cases are United States v. Horizons Hospice, case number 2:12-cv-00315, and United States v. Horizons Hospice, case number 2:13-cv-01688, both in the U.S. District Court for the Western District of Pennsylvania.

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