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Justice Department declines to intervene in HCR ManorCare hospice lawsuit

The U.S. Justice Department has declined to intervene in four False Claims Act lawsuits against HCR ManorCare, alleging the provider admitted patients to hospice care who were not eligible for the service.

A group of former employees of HCR ManorCare's Heartland Hospice, accused the hospice of running a scheme in which it falsified patients' life expectancies so that they qualified for hospice reimbursement under Medicare Part A, and kept them on the program after their medical conditions had stabilized rather than discharging them as required under Medicare rules. They alleged Heartland employees were fired if they did not admit a certain number of new hospice patients.

The Justice Department conducted its own investigation into the whistle-blowers' allegations before declining to intervene. The agency declined to comment on the decision.

The plaintiffs in the case can still move forward with their complaints, which were consolidated in U.S. District Court in Toledo, Ohio. The government will still receive updates on the case and could still become involved in the future, according to court documents.

Other hospice providers haven't had the same outcome. In January 2009, the Justice Department reached a $24.7 million False Claims Act settlement with Birmingham, Ala.-based SouthernCare Hospice stemming from a lawsuit accusing the provider of seeking reimbursement for patients treated at its hospice facilities that did not qualify for Medicare's hospice benefit.

The Justice Department late last year backed out of a similar case it brought in 2015 against HCR ManorCare's skilled-nursing operation. The lawsuit accused the company of fraudulently overbilling Medicare for millions of dollars. That happened after a federal judge excoriated the government for its handling of the case and ruled a witness lacked credibility.

HCR ManorCare recently announced it is filing for bankruptcy and plans to shift ownership and leadership to its landlord.

Tara Bannow covers hospital finance for Modern Healthcare in Chicago. She previously covered all aspects of healthcare for the Bulletin, a daily newspaper in Bend, Ore. Prior to that, she covered higher education for the Iowa City Press-Citizen. She earned a bachelor’s degree in journalism in 2010 from the University of Minnesota.

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