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Thought Leadership

An Unwanted Spotlight: DOJ Announces Hospice Fraud Is Top Priority



In this episode, Husch Blackwell’s Meg Pekarske and Jonathan Porter, a former federal prosecutor, discuss takeaways from the recent American Bar Association’s Annual National Institute on Health Care Fraud. Most importantly, they will explore what the hospice industry can expect after hearing the remarks of Lisa Miller, the Department of Justice’s (DOJ) Deputy Assistant Attorney General who oversees the Criminal Fraud Section. According to Miller, data has shown an increase in costs to the Medicare program resulting from claims for hospice care. Therefore, combating health care fraud is going to be a top priority for the DOJ. Be sure to tune in for this important episode. You won’t want to miss it.

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00;00;05;01 - 00;00;31;27
Meg Pekarske
Hello and welcome to Hospice Insights, The Law and Beyond, where we connect you to what matters in the ever changing world of hospice and palliative care. An Unwanted Spotlight: DOJ Announces Hospice Fraud Is Top Priority. Jonathan Porter, my colleague, former federal prosecutor, so glad you can join me for what will be a really interesting conversation. So thanks for being here.

00;00;32;13 - 00;00;34;29
Jonathan Porter
Thanks, Meg. Excited to, excited to talk again.

00;00;35;05 - 00;01;26;02
Meg Pekarske
You're just coming back from presenting at the ABA's annual Broad Institute Health Care Fraud Institute I. It doesn't roll off the tongue for me, but I know you're speaking there. But obviously you went to the conference as well, and so I wanted to connect with you sort of about what jumped out at you. That seemed important. I mean, the big thing, which we'll talk about in a second, is the keynote that was given by someone from DOJ, where on fortunately, hospice was a leader in terms of where their focus is going to be. But but that sort of talk more generally about what was new, what was the same, you know, what's going on in the terms of health care fraud.

00;01;26;22 - 00;03;10;10
Jonathan Porter
Yeah. Good question, Meg. It was a it was a great conference. This is my first time at this particular conference, the ABA National Institute on Health Care Fraud. When I was a federal prosecutor, I got I got in the speaking circuit on health care fraud issues. But it's my first time at this one. It was an excellent, excellent conference. A lot of a lot of leadership from DOJ was there and they talked about priorities and where they're going. I my one of my two panels was with a good friend of mine, Kate Wagner, who's a trial attorney with the Criminal Division Fraud section, Health Care Fraud Unit Strike Force on like National Rapid Response Strike Force. She's a super long title and she she and I did a lot of we spoke on telehealth fraud together. She and I did a lot of telehealth fraud cases together. That appears to be a continue in area of of enforcement telehealth fraud, which is not really telehealth, but it's sort of couched as telehealth. That's going to be a big area going forward. And then a lot of people are asking questions about that. Minnesota False Claims Act trial from from earlier this year. The medical device company. But that that got rung up after a trial. And I think the I think I saw recently the court just entered a judgment of $489 million against this medical device distributor. I think it was people were talking about that. But definitely the deputy assistant attorney general's comments on hospice raised some eyebrows. And the reason we're talking about it, Meg, as soon as as soon as she said that, I sent you an email saying you're not going to believe what what what I just heard.

00;03;10;21 - 00;03;36;07
Meg Pekarske
Yes. No, I when I saw your email, my heart sort of sank because it's not the spotlight that we want to have. And so this is the keynote. It was Lisa miller who is the is it the DOJ's deputy assistant attorney general. So I guess where does that put Lisa and the chain of command?

00;03;37;04 - 00;04;02;28
Jonathan Porter
Yeah. Good question. So she's she's within main justice. She's right below complete. Who's the assistant attorney general Over the over the Criminal division. Lisa miller, long time longtime federal prosecutor. I think she was in Miami for for a long time. She's overseeing the she oversees the entire fraud section, I believe. But that includes the the main justice's health care fraud unit.

00;04;03;17 - 00;04;48;05
Meg Pekarske
And the criminal fraud section. So, yes, yes, serious stuff she's working with, which when you're top of mind for her, that's that's a scary thing. But that's first sort of allay everyone's heart palpitations going on as we're talking about this. Because, you know, when she's raising a hospice, it's in the context of what is a pretty like, unbelievable. No one listening to this podcast is, I'm sure, doing. So. Why don't you give a little color to, you know, she focused on a particular hospice case that was very egregious that obviously everyone would agree like this is very disturbing.

00;04;49;04 - 00;07;28;09
Jonathan Porter
Yeah, So it was interesting. So Lisa miller, when she was giving her remarks as as a lot of DOJ senior officials do, is that they'll give their their areas of enforcement that they see coming. And she mentioned telehealth fraud, pandemic fraud, and then she mentioned hospice fraud. And the example that she gave in hospice fraud is the is the the prosecution of the Marina group in Texas. So it was the largest known hospice fraud scheme prosecuted to date $150 million in fraudulent claims to Medicare for hospice and homeless services. And and this was a very the facts that that Lisa miller gave showed showed some pretty egregious conduct. What caught my ear was the claim that certain patients were told that they were dying when in fact they were not. I think that's probably what put that case into the criminal category instead of the false claims that civil false claims that category when when patients the apparently a lot of patients testified there were a lot of language barriers and the patients were, I guess, deceived into into thinking that they were dying. Lisa miller quoted one one patient who testified at trial who talked about how they were how they were in in shock when someone came into the hospital room and told them that they only had 3 to 6 months to live and how that led to thoughts of of suicide so that the family wouldn't have to to watch them die. And that was apparently a, you know, fake diagnosis. When I heard that, it took me back to a different podcast. Meg the the Dr. Death podcast from from season two, where were DOJ prosecutor, this Detroit oncologist named Farid FATA, who got 45 a 45 year sentence. What Dr. FATA was doing, he was an oncologist and fake, you know, diagnosed people who did not have cancer with cancer and gave them chemotherapy and all this stuff, like some of the most egregious conduct I've ever heard of in the health care space. That's why they did a, you know, a whole podcast about them. These married group people sound like that level of awful where you're convincing people that they're that they're dying when they're not. I think that's what sort of separates that out. And to be honest, Meg, I'm not sure you're the hospice industry guru. I don't think. I don't know that that's happening all that often.

00;07;28;18 - 00;11;56;12
Meg Pekarske
Yeah. No. And I think that that when I read her statement, which we're going to link in the podcast notes, because when you ever get government officials, they have to clear what they're saying. And so her keynote is written out and we're going to link to it so you can read it for yourself. But I think the disconnect that we in the industry and doing this for 23 years now is that the net sometimes gets cast wider than it should. And so, you know, no one is doing this right. No one I've ever work with is doing something like this. But, you know, we've worked on, you know, many DOJ matters where you're you know, we're fighting about a long length of stay patients and sort of this, you know, this very challenging area around prognostication and where that line is. And you know that I think when I hear, you know, hospice fraud is going to be a spotlight, I can be assured that no one who's doing what those people are doing are going to call me. But when DOJ does that right, lots of letters go out. Lots of kids can go out because and you can speak to those since you, you know, had this job. Right. The DOJ has priorities. You said in main justice, you know, those flow down and I want to make a career for myself. And these are the priorities. And we know there's a lot of whistleblower activity. And so, you know, if Main justice is saying hospice fraud is a problem, you know, no one's just thinking about that really egregious case. They're thinking about, you know, things that come up in my life every day, which is, you know, very difficult patients to prognosticate, really being challenged by making sure that Medicare beneficiaries have access to the benefit that they need. And then the chilling effect that enforcement has and sort of where does that line go? And I think in particular, what stuck out that Lisa said was, you know, the spotlight is in part, you know, while there's been a lot of growth of hospice and it's like, well, to me, of course there is right. I mean, hospice started as a grassroots movement. It is now very mainstream. We have, I think, probably more older people geriatric people in our country than we've ever had. People are dying of chronic illness because they're living a very long time and with medical advances and other things. So of course we're going to have higher utilization and more people acting this benefit when people just say, well, and CMS says this too, like we have so much growth in hospice, there must be we're spending more money on this, there must be something wrong. And it's like but the demographics are sort of, you know, also answer that. And and I guess as a side note to that and we talked about this beforehand, Jonathan, but a big report came out that was sponsored or funded in part by various national associations about the cost savings of hospice and cost savings generally increase as someone is on hospice for a longer period of time because they think there's this disconnect that it's always profiteering. If people are on hospice for a long period of time when actually not only are patient outcomes better in terms of quality of life and those kinds of things, but actually it does save the government money. And so so as a as an advocate for for the industry for so long, my concern was get go after these bad guys, like go get it. Lisa But then it's like, yeah, but if I ever have to face Lisa, obviously you'll be facing Lisa, not me with our clients. But like could the concern of how do you make sure we're focused on where there is really bad activity and maybe you can tell me your thoughts around when there's a directive sort of like this. This is going to be a priority. Like how do you approach that? Because there are just a lot of people if you don't know a lot about hospice, the optics could be like, Oh, someone was on service for several years. That seems fraudulent, right?

00;11;56;28 - 00;14;47;15
Jonathan Porter
I think that sort of what what comes out of this is hopefully if there are other people running hospices where they're telling patients that they have cancer when in fact they don't, by all means, let's go. Let's go. Stop that. I mean, I think we're all on the same page, that we shouldn't be we shouldn't be okay with non cancer patients being told they have cancer and stuff like that. So, you know, we need to if to the extent that there are others, other marina groups out there and they need to be stopped, let you know, hopefully they're they're going to go do that. The question is for the for the next rung down for for, you know, hospice providers who are, you know, being aggressive in terms of aggressive but not like awful, truly awful. What happens what happens to those hospice providers? And I think that's the that's the more interesting question is, is the criminal division going to be pushing for prosecutions of the folks where you don't have egregious facts like these or or are we going to end up in a situation where those are going to be handled with more and more false claims out cases? You know, one of the one of the interesting things when when a DOJ official speaks at a public forum like this and the the the remarks get put on DOJ website, the whistleblower bar was there. They were at that conference. They had their own their own session when we broke out, they were there. They were listening to. Lisa mILLAR And they're reading these, these remarks and what, what the whistleblowers are smart, smart attorneys. They, they try to figure out where is DOJ really going to invest? Because what they want is DOJ to intervene in these false claims at key times. And and that means that because that means more dollars for for them, it's just normal, you know, rational decision making. And so what I think the product of this is going to be is whistleblowers, whistleblowers, whistleblower attorneys, buying, finding whistleblowers and saying, look, DOJ is about to invest in in investigating hospice. It's not just this. It's the, you know, New Yorker article that came out. It's you know, it's a general, you know, more spending on hospitals as our patients, as our Americans get older and older. I think that there's just going to be more whistleblower retention in this space. I think that's probably the biggest thing to come out of this. I don't expect there to be, you know, a 500 defendants string of indictments issued in the next few months in the hospice space. I think it's more likely that this is a this is going to be something latched on to by by the whistleblower.

00;14;47;15 - 00;16;32;04
Meg Pekarske
BARR Interesting. Something I think everyone, whether we like it or not, I think that this is here to stay for a while. And it's really sad, too, for this to to be the reality that we're in. But it is what it is. And, you know, I think that there's a lot of change afoot in the hospice industry in terms of lots of consolidation going on. Even, you know, in the nonprofit sector, people coming together. There is, I think some people are not going to be able to survive into the future. And I think, you know, hospice used to look like while there was a fairly low bar of entry and maybe you have people that are not committed to the mission. And I think hopefully that my life away after a while now because, you know, you're going to get audited right away when you start business here. I mean, there's just going to be other things that might shape the industry. So what we have is a group of, you know, sophisticated health care providers who are really solving problems and improving quality of life for all of us. Your role and I'm so glad you joined our team because the perspective and expertise you bring is just really unmatched in terms of, you know, how we can, you know, help clients who who may unfortunately have to deal with some of these situations down the line. I don't want to say it's fun times because it's not fun times, but it always is great that you have the right people on your team to make sure that we can be that steady hand for our clients. So anyway, it is interesting times. I guess I'll leave it at that.

00;16;32;06 - 00;16;54;14
Jonathan Porter
I know I get that, you know, DOJ focusing on the hospice industry. Bad, bad for fear for your clients, but you know, I hopefully our team, hopefully your clients know that our team is here ready to not only advise on the on the front end but to help if they find themselves receiving a civil investigative demand or subpoena or something like that.

00;16;55;04 - 00;17;57;10
Meg Pekarske
Yeah. So you're on speed dial. So. Right. Speed dial. It's a it's a phone tree. So, you know, I'm on someone's phone tree, then you're on mine. And so anyway, only a phone call away. So. Well, thanks so much for for sharing sort of the inside of what the conference was like and and I can't wait till we talk next, Jonathan, because it's probably going to be June, but so so anyway but while I have a great day and and thanks for listening everyone. And until next time. Well that's it for today's episode of Hospice Insights, The Law and Beyond. Thank you for joining the conversation. To subscribe to our podcast, visit our website at or sign up wherever you get your podcasts. Till next time, may the wind be at your back.