Rhode Island Hospice Operator Agrees to Pay $19M to Resolve False Claims Allegations

Rhode Island Hospice Operator Agrees to Pay $19M to Resolve False Claims Allegations

Gentiva, successor to Kindred at Home, has agreed to pay $19.428 million to resolve allegations that Kindred at Home and related entities (“Kindred”) knowingly submitted false claims and knowingly retained overpayments for hospice services provided to patients who were ineligible to receive hospice benefits under various federal health care programs, announced United States Attorney Zachary A. Cunha.

Gentiva’s hospice operations, headquartered in Atlanta, Georgia, include entities that previously operated Kindred at Home hospice locations under the names Avalon, Kindred, SouthernCare, and SouthernCare New Beacon, to include a facility in Warwick, Rhode Island.

“My office remains determined to ensure that federal funding for essential health care, like the hospice care at issue in this investigation, goes to the patients who need it, rather than to health care companies who seek to exploit those patients for profit,” said Zachary A. Cunha, United States Attorney for the District of Rhode Island. 

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“Today’s result reflects a concerted effort by this Office and U.S. Attorneys’ Offices around the country, working alongside the Fraud Section of the Justice Department’s Civil Division, and our law enforcement partners, to help to guarantee that Medicare funds are directed where they belong and that high-quality hospice care is available for patients and their families in the future," added Cunha. 

About Case 

The settlement resolves allegations made by the United States and the State of Tennessee in a consolidated complaint filed in 2021 against certain Kindred related entities alleging that, from 2010 until February 2020, the defendants knowingly submitted or caused to be submitted false claims for hospice services provided to Avalon hospice patients in Tennessee who were ineligible for the Medicare or Medicaid hospice benefit because they were not terminally ill.  

The settlement also resolves the complaint’s allegations that the defendants improperly concealed or avoided Avalon’s obligation to repay those hospice claims.

In addition, the settlement resolves allegations that certain Kindred, SouthernCare, and SouthernCare New Beacon hospice locations knowingly submitted, or caused to be submitted, false claims for hospice services provided to patients who were ineligible for hospice benefits under Medicare and other federal health care programs because the patients were not terminally ill.  

Those hospice locations were Kindred’s locations in Warwick, Rhode Island, Beaumont, Texas, and Independence, Missouri; SouthernCare New Beacon’s location in Demopolis, Alabama; and SouthernCare’s locations in Daphne, Alabama, Mobile, Alabama, South Bend, Indiana, and Youngstown, Ohio. The settlement also resolves allegations that those Kindred, SouthernCare, and SouthernCare New Beacon locations knowingly and improperly concealed or avoided obligations to repay the foregoing hospice claims.

Further, the settlement resolves allegations that SouthernCare New Beacon allegedly violated the Anti-Kickback Statute by willfully paying renumeration to a consulting physician, between October 1, 2016 and October 1, 2022, to induce hospice referrals of Medicare beneficiaries to its Gadsden, Alabama location.  The settlement of those allegations stems from a voluntary self-disclosure made by New Beacon Healthcare Group LLC d/b/a SouthernCare New Beacon Hospice.  

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded health care programs. It is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

“The integrity of hospice care is critical to the millions of patients receiving these services,” said Deputy Inspector General for Investigations Christian J. Schrank of the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). “We, along with our law enforcement partners, will continue to ensure that providers who focus on personal financial gain rather than providing medically necessary, high-quality hospice care will be held accountable.”

The Medicaid program is funded jointly by the state and federal governments.  As a result of the settlement announced today, the federal government will receive $18,956,151.32, the State of Tennessee will receive $448,800, and the State of Ohio will receive $23,618.68. 

About Settlement

The settlement includes the resolution of claims in nine lawsuits brought under the qui tam or whistleblower provisions of the False Claims Act by various current and former Kindred employees.  Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.  The share of the settlement to be received by the whistleblowers has not yet been determined.

Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The claims resolved by the settlement are allegations only and there has been no determination of liability.