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False Claims Act Insights - How Hospice Fraud Impacts Legitimate Providers

 
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Episode 44 | How Hospice Fraud Impacts Legitimate Providers

Host Jonathan Porter welcomes Bryan Nowicki, leader of Husch Blackwell’s hospice practice group and host of the Hospice Insights podcast, to discuss the recent wave of hospice fraud enforcement. With hospice fraud dominating headlines in recent months, Bryan shares insights on how massive fraud schemes are impacting the industry and why legitimate providers face collateral damage.

We begin with the fundamentals, examining why hospice has become such a target for fraudsters. Bryan explains what makes the Medicare hospice benefit particularly vulnerable to exploitation and how the structure of hospice care creates opportunities for bad actors.

Next, we discuss shocking examples from recent California investigations, including 15 hospices incorporated on the same day at the same address. Bryan explains how Medicare’s enrollment processes allow this to happen and why a 97% live discharge rate—reported at one hospice under investigation—is a massive red flag for fraud. We also discuss identity theft schemes, where fraudsters allegedly used stolen data from breaches to enroll patients who were never sick and had no knowledge of their enrollment.

We then pivot to the types of False Claims Act theories DOJ typically pursues against legitimate hospice providers—long length of stay, eligibility determinations that don’t meet LCD requirements, and medically unnecessary crisis care or general inpatient care. Bryan clarifies how these investigations differ dramatically from the egregious fraud schemes making headlines.

Bryan discusses the collateral damage these massive fraud schemes inflict on legitimate hospice providers: increased regulatory scrutiny, reputational harm to the entire industry, chilling effects on patient enrollment, unfair competition from fraudsters, and claims processing problems when identities are already being billed.

We close with a sobering reality: whistleblowers and their attorneys are more likely to pursue FCA cases against legitimate hospices with assets rather than shell companies that have moved money offshore. Bryan explains how the prevalence of fraud in the news may paradoxically cause FCA enforcement to focus on the wrong targets.

Jonathan Porter | Full Biography

Jonathan focuses on white collar criminal defense, federal investigations brought under the False Claims Act, and litigation against the government and whistleblowers. He draws on his experience as a former federal prosecutor to guide clients in sensitive and enterprise-threatening litigation. At the Department of Justice, Jonathan earned a reputation as a top white-collar prosecutor and trial lawyer and was a key member of multiple international healthcare fraud takedowns and high-profile financial crime prosecution teams. He also teaches white collar crime as an adjunct professor of law at Mercer University School of Law.

Bryan Nowicki | Full Biography

Bryan has more than 20 years of litigation and regulatory experience, assisting clients on a nationwide basis with complex litigation, compliance, and business matters with a particular focus on hospice, home health agencies, palliative care organizations, hospitals, and skilled nursing homes. Working closely with clients, he develops practical strategies and remediation when they face issues including state and federal investigations, whistleblower complaints, audits, and federal fraud and abuse claims, among other areas.

Read the Transcript

This transcript has been auto generated

00;00;00;00 - 00;00;41;02

Jonthan Porter

Welcome to another episode of Husch Blackwell's False Claims Act Insights podcast. I'm your host, Jonathan Porter. Hospice fraud has been in the news a lot over the last few months. There have been a bunch of reports about fraud going on in states like California, some other types of fraud that are being reported in states like Minnesota. And so today on the podcast, we're going to unpack some of these big reports of fraud that have been in the news so that our listeners can understand what's happening in the world of fraud, how it relates to the False Claims Act, and how there's some interesting unintended consequences of terrible examples of fraud being in the news that

00;00;41;02 - 00;01;04;03

Jonthan Porter

might impact our listeners, which are mostly the legitimate healthcare providers. It's a really interesting story that I want to make sure that we tell today on the podcast, big egregious fraud and how it relates to False Claims Act enforcement. Joining the podcast to talk about hospice fraud is my law partner, Bryan Nowicki. Bryan leads our firm's hospice group.

00;01;04;04 - 00;01;26;14

Jonthan Porter

He's a past guest of this podcast. He came on last year to talk about payment suspensions, which is a really big issue in the world of healthcare and healthcare enforcement. So Bryan came on the podcast, explained the payments, suspension process and how that relates to ongoing investigations into False Claims Act. And a lot of our listeners may know Bryan from his own podcast.

00;01;26;14 - 00;01;55;20

Jonthan Porter

So Bryan is the host of the firm's Hospice Insights podcast, where he explores all sorts of hospice practice questions with our firm's excellent hospice team. Bryan inherited the mantle of podcast host of that podcast from our now retired partner Meg Pekarske, who was very close to both Bryan and I. And so Bryan, welcome back to the podcast. Thanks for telling our listeners a little bit about this big hospice fraud news revelation.

00;01;55;22 - 00;02;15;06

Bryan Nowicki

Yeah, well, thanks for having me on, Jonathan. Again. And yeah, Meg's shoes are hard to fill. I've took over the hosting duties on that podcast, and I have a newfound respect for you. Jonathan, I know when you're on the hosting side of these, that can be difficult. So I really appreciate the work that goes into these and what you're doing.

00;02;15;08 - 00;02;27;06

Bryan Nowicki

And as you can imagine, if you've read the headlines, our hospice team has been quite busy given what's been going on out west. And I think it's creeping around other parts of the country. So I'm glad to be able to talk with you about this.

00;02;27;08 - 00;02;48;03

Jonthan Porter

Thanks, Bryan. Yeah, let's start with the fundamentals. So for listeners who may not be familiar with how hospice care works, can you explain why hospice in particular has become such a target for the egregious fraudsters out there? What is it about the hospice Medicare benefit that makes it particularly vulnerable to exploitation?

00;02;48;06 - 00;03;11;21

Bryan Nowicki

Sure. So I've been doing hospice work for probably 20 years. I've been an attorney for 30, and even in the time I've been doing that, there's been quite a change with hospice. Now, just some fundamentals of that. Hospice care is provided through Medicare to patients who have a physician saying certifying that they have a life expectancy of six months or less.

00;03;11;21 - 00;03;37;12

Bryan Nowicki

So it truly is designed to care for those people in the last months of life, alleviate their pain, improve quality of care, and importantly, hospice care goes to the patient. So if you're thinking about, oh, let's stop by the hospice building that doesn't exist from a patient's perspective, the care is provided wherever the patient resides their home, their nursing facility, assisted nursing facility.

00;03;37;15 - 00;04;10;13

Bryan Nowicki

So you don't have like a brick and mortar place that folks can go to and see how the patients are doing and test and make sure that they're actually treating patients. So that is a bit of an opportunity that I think people have capitalized on the fraudsters. And we've seen over the past 20 years the number of hospices and the amount of revenue or I guess Medicare payments to hospices has grown significantly from a few billion to tens of billions of dollars.

00;04;10;16 - 00;04;34;03

Bryan Nowicki

And I think people again, opportunist saw, hey, there's a lot of money flowing to hospices. Let's get a piece of that. We don't have to have a brick and mortar place. It's this nebulous. Do you have six months to live kind of standard, which is a prediction and a lot of opportunities for people to say, let's start something on paper and deal with these nebulous standards and try to make some quick money.

00;04;34;05 - 00;04;40;06

Bryan Nowicki

So I think that's why it kind of got the attention of people who are looking for ways to scam the government.

00;04;40;09 - 00;05;04;21

Jonthan Porter

Thanks, Bryan, I appreciate that. For those who don't know, the story of hospice as a thing that Medicare wants to pay for is actually really interesting. We probably do an entire history episode, Bryan, about the history of hospice. Unfortunately, I learned this firsthand when my mom was sick and dying, and she put on hospice and had just this unbelievable experience that got her end in a really nice and peaceful way, made everything really easy.

00;05;04;21 - 00;05;24;23

Jonthan Porter

So I've got a lot of respect for hospice, but what a lot of people may not realize is that hospice is not something that's been around a long time, and we've had medical specialists, all these labs and everything for a long time. Hospice relatively a recent phenomenon. And it's because we've gotten really good on the medical side of getting people to live longer.

00;05;24;23 - 00;05;42;16

Jonthan Porter

And so people are living longer, even with these really bad diseases that we know are going to end their lives. And we want this nice buffer to get people comfortably to the end. So hospice is a really great thing. But like you said, Bryan, there's a lot of ways for people to rip off the benefit, and that's for talking about today.

00;05;42;16 - 00;06;09;04

Jonthan Porter

So the people who are ripping off the benefit, one thing you mentioned, Bryan, is that hospice goes to the patient. That was certainly my mom's case. Hospice came to my mom's house, my parents house, and cared for her while she was in my childhood house in her final days. But what's interesting is in all the reporting out of California, I read about this where there's an incidence of 15 hospices incorporated on the same day at the same address.

00;06;09;04 - 00;06;20;28

Jonthan Porter

It was a single office suite, and then nice. How does that even work? Are there no processes that would check against something like that before the hospice can start billing Medicare?

00;06;21;00 - 00;06;44;05

Bryan Nowicki

There are process in place, and looking at this from the perspective of the good guys who we represent, there's been a bit of frustration that there are a number of data points available to CMS for them to follow up on, and in our view, I guess in my view, to be able to target fraudsters a little more precisely than they have been, they've used a rather wide net.

00;06;44;05 - 00;07;07;03

Bryan Nowicki

So when you try to enroll a hospice, you got to submit an application that provides a lot of information and address information and who your leaders are. And I'm familiar with what you just described. I think Doctor Oz held a press conference outside a building that he said housed, I don't know, was it 50 or 60 hospices? And people certainly can scratch their heads.

00;07;07;03 - 00;07;32;22

Bryan Nowicki

A gas station housed a hospice, but I think it's what I described earlier that they're not necessarily looking for a brick and mortar facility to verify that exists. Now a hospice has to have an office location, but you don't need much. It might not be unusual or impossible to have multiple hospices in one location. What you just described, though, is way beyond what anybody could reasonably expect.

00;07;32;25 - 00;07;41;22

Bryan Nowicki

So I think the clues and the evidence of the fraud has been out there. CMS is now very aggressively pursuing all of those kinds of leads.

00;07;41;24 - 00;08;02;18

Jonthan Porter

Yeah, Brian, I think the key there is the existence of a bunch of hospices in a single building is actually not, per se, the wrong thing. I think you could have a bunch of nurses and other support staff liaisons that are out in the community where they're supposed to be caring for patients and not have a big corporate office.

00;08;02;20 - 00;08;18;06

Jonthan Porter

That actually makes sense. But I think what you're reading about in the news that's not happening, I think, is people where they don't have all of these employees who are going out and caring for patients, working with referral sources. I think they're just doing the wrong thing. Period. So that, I think, is what people are reading about. Bryan,

00;08;18;06 - 00;08;38;19

Jonthan Porter

another report said that one hospice under investigation in California had a 97% live discharge charge rate. Now, you and I know that a number that high is a huge red flag for fraud, but our listeners might not get that. So unpack that for us. Why is a 97% live discharge rate really odd for a hospice?

00;08;38;22 - 00;09;04;25

Bryan Nowicki

Well, as I mentioned before, hospice is designed to care for patients who have limited life expectancy, that you have six months to live. And the whole purpose of hospice is to see you and your family through the death event. Maybe it's macabre to think this way, but a successful hospice stay will end in death and it'll end in a peaceful death, surrounded by family.

00;09;04;28 - 00;09;30;18

Bryan Nowicki

It's not a live discharge. A live discharge is exactly what it says. You are discharged from the hospice while you're still alive, and so that can indicate a few things. One is, well, maybe the hospice admitted you prematurely. Perhaps they were being too conservative and thinking you had six months to live and after you're in hospice, they realize you're more stable than they had anticipated you would be, and maybe they discharge you.

00;09;30;18 - 00;09;58;20

Bryan Nowicki

I mean, that happens a lot with good hospices, and that can happen. But when the numbers approach 97%, that's not evidence of well, maybe they misinterpreted the data with regard to a few patients, which can happen. This is a breakdown of the admission process in that you just are not doing a good job at all. Of saying that people have six months to live, they're out living that and you have to discharge them.

00;09;58;23 - 00;10;21;23

Bryan Nowicki

And with live discharges, I think what the government also might consider a live discharge are revocations. And that's where the patient decides to stop hospice care. A few revocations are expected, but if you have widespread revocations, that could be a quality of care issue or the patient not understanding what hospice is all about until they get into it and realize this is not for me.

00;10;21;26 - 00;10;51;16

Bryan Nowicki

And then the real fraudsters out there, they kind of engineer patient revocations. When you're on hospice, that hospice pays for all of your care, even if you need some expensive treatments. The unscrupulous hospices to try to avoid those costs will engineer a patient revocation. Have that patient go get the expensive treatment that is not covered by the hospice, but covered by a hospital or something, and they'll bring that patient back on the hospice after that expensive treatment is done.

00;10;51;19 - 00;11;05;10

Bryan Nowicki

And then the hospice keeps raking in the money. So that's a number of reasons why a high discharge rate, 97% is just crazy. But that's why it would get the attention of the government as there's something wrong going on with that hospice.

00;11;05;12 - 00;11;31;09

Jonthan Porter

Thanks, Bryan. Yeah, I totally agree. Some live discharges are totally normal. Every now and then you're going to admit a patient who appears to be terminal and within six months and then something happens. One of the amazing things about the human body is that they don't all respond the same. Sometimes people just start getting better. Sometimes people plateau and they're not getting sicker, and it no longer appears that they're going to die within six months.

00;11;31;09 - 00;11;46;17

Jonthan Porter

And that situation is perfectly normal and the right thing to do for someone to be live, discharge for them to no longer be on hospice, and then you can reassess them later for hospice eligibility again. But it's a big deal if it's 97%, don't you think, Bryan?

00;11;46;20 - 00;12;17;10

Bryan Nowicki

Absolutely 97% is way above any nationally recognized norm. There's an organization that advises CMS on policy issues called Medpac. They provide a report to Congress. I think in their report from March, the national live discharge rate was about 20%. So you can see how outlandish 97% is. And one of the thing about hospice, this kind of goes in with attracting the fraudsters and relates to what that happened.

00;12;17;13 - 00;12;41;04

Bryan Nowicki

We've talked about a six month life expectancy. I think it's an important point, though, that it's not limited to a six month benefit. People can outlive their prognosis. They beat the odds, but they're still terminally ill. Any physician would think this patient is going to be dead within six months. It’s a benefit that's not limited by time. It's only limited by medical records.

00;12;41;06 - 00;13;03;21

Bryan Nowicki

And so people say, well, I can keep somebody on hospice for a year or three years. And that's not per se illegal. Again, a big opportunity there. The good hospices don't do that. They'll discharge a patient appropriately if they find they're no longer terminally ill. But the open-ended nature of it allows some hospices to keep patients on for a super long time, raking in some money.

00;13;03;23 - 00;13;25;11

Jonthan Porter

Yeah, those are good points, Bryan. And an important point is that when you get to six months, you don't just stop. If you're still within your window of a doctor looking at you and saying you're within six months of death, you're still eligible for hospice. And so you're right, you can keep on going. The key is when you're being recertified, are you within six months recognizing that look, medicine is really hard.

00;13;25;11 - 00;13;49;14

Jonthan Porter

Predicting death is actually really hard. The hospice benefit used to be a set period of time and it just wasn't working. So now it's a very flexible standard, deferential to physicians who are trying their best to figure out what is someone's individualized prognosis given what their condition is. It's a really hard thing to predict death. That's what a lot of people don't understand is there's no accurate algorithm that can tell you these things.

00;13;49;16 - 00;14;05;09

Jonthan Porter

Everyone's different. Our bodies are all designed differently. And so this really is a hard thing. And that's why the benefit is designed to favor doctors discretion trying to get it right. But there's a lot of people out there who see that discretion. And they say, I'm going to go commit all the fraud and get all of this hospice money.

00;14;05;16 - 00;14;30;19

Jonthan Porter

And that's that's what we're reading about in the news. That is. And to me, Bryan, one of the key things is this is not a common thing in hospice. These are extreme outliers. Awful criminal predators who are trying to do the wrong thing. And that's impacting the industry as a whole. Another thing, before we talk about how this relates to legitimate hospices that I've been reading about is people who are hospices that are admitting patients without the patient's actual knowledge.

00;14;30;19 - 00;14;57;20

Jonthan Porter

That's a really big problem. Some people I know ask, how is it possible that people could be admitted to hospice without their knowledge? There is no like national clearinghouse with CMS where they're collecting patient consents to go on hospice. That's an individualized thing. Medicare, very much a system of trust. I think I had an expert once testified to that in a trial when I was a DOJ. Medicare system of trust, you're supposed to trust the hospice when the hospice says, I've got someone who's eligible for hospice, they're not going in and doing a bunch of digging.

00;14;57;23 - 00;15;16;09

Jonthan Porter

It's very much is deferential to the hospice. That's the way it's got to work. We don't have a different system. So that's how this all happened. Bryan, the reason I wanted to cover all of this is because those allegations are very different from the types of allegations that you and I see in nearly all False Claims Act investigations into hospices.

00;15;16;09 - 00;15;38;14

Jonthan Porter

Right? I mean, the things we been talking about, those are glaring fraud indicators and the investigations that we handle for our very legitimate hospice clients are actually very different. So, Bryan, tell our listeners what types of theories DOJ typically tests in False Claims Act investigations into these non like egregious fraud hospices though legitimate. The good guys as you call them.

00;15;38;14 - 00;15;39;19

Jonthan Porter

Tell us about the good guys.

00;15;39;22 - 00;16;10;00

Bryan Nowicki

Well right. So the good guys they get caught up in allegations accusation of wrongdoing that fall short of some of the really criminal stuff we've just been talking about. But there's still targets. Whistleblower complaints against hospices and even Department of Justice investigations against what we're calling the good guys usually center around something we've been talking about. And that is eligibility for hospice. Even short of just making stuff up, which is what the fraudsters do,

00;16;10;02 - 00;16;38;21

Bryan Nowicki

hospices can be criticized for admitting patients who are not eligible for hospice. They don't have medical records that support a six-month prognosis. At least that's what the whistleblower or DOJ allegation is. And some of those can be rather close calls. There's no debate that these are real patients and real hospices and services are being provided, but it's a matter of whether the hospice physicians appropriately interpreted that data.

00;16;38;23 - 00;17;08;18

Bryan Nowicki

To say that that patient does have a six-month life expectancy, and those hospice physicians have to make those certifications of terminal illness periodically every 2 or 3 months. So over time, they build up a lot of these opinions that can be subject to criticism. So the core of a lot of Hospice False Claims Act cases on the civil side start with the hospice is somehow falling down on the job and admitting too many patients who are just not eligible for hospice.

00;17;08;21 - 00;17;34;26

Bryan Nowicki

And what I've seen in hospice False Claims Act cases is they kind of surround that central allegations with other allegations that show a culture of noncompliance. So are there other incentives that would cause a hospice to kind of lean too much in favor of admitting patients, even if they don't have strong support? Are the physicians incentivize in compensation to admit patients?

00;17;34;26 - 00;18;07;12

Bryan Nowicki

Are the marketers incentivized by admissions? Is there evidence of any kind of false documentation or shortcuts in documentation, like copying and pasting medical records? A physician supposed to draft something called a narrative, but did that physician just copy a nurse note and put it in there? So there's those kinds of indicia of this culture of noncompliance that might be used by the government to say, you guys are being too aggressive, and it has led you to admitting patients who truly are not eligible for hospice.

00;18;07;14 - 00;18;25;13

Jonthan Porter

Thanks, Bryan. And some of those things that you mentioned are legitimate bases for a False Claims Act investigation. Cloned notes, if you're just putting a physician on autopilot and they're not actually making a determination on eligibility, that I get it. That's a False Claims Act problem if you've got the evidence that that was done knowingly, that's a False Claims Act

00;18;25;13 - 00;18;52;20

Jonthan Porter

I think. What drives me crazy, though, Bryan, is when whistleblowers use the False Claims Act to test things that are discretionary, like we talked about earlier, Bryan, predicting death and the timing of death six months out is actually a really hard thing to do. It's intentionally deferential to the physician. It drives me crazy when False Claims Act investigations which are supposed to be for knowing fraud starts second guessing things like how long did this patient take the doc?

00;18;52;21 - 00;19;21;17

Jonthan Porter

Well, if you had known this two years earlier, would you have still certified that? We're not talking about actual knowing fraud then, we're talking about disputes or disagreements on very minute things. One of the things that President Trump did early in his second term was to say, we shouldn't be having fraud investigations premised on sub regulatory guidance. And so when we're getting into things like, well, the LCD says this or it says that we're getting into really my new things, it's hard.

00;19;21;23 - 00;19;38;18

Jonthan Porter

When I was at DOJ, I didn't want to stand up and say, this person is fraudulent because look at this sub regulatory guidance. That's a really hard thing for juries to understand. So my personal opinion is the False Claims Act is for knowing fraud. I don't think that's that controversial of an opinion by the way, a lot of Supreme Court cases say exactly that.

00;19;38;20 - 00;19;59;28

Jonthan Porter

Anyway, that's my soapbox going back, though, to these reported egregious frauds. Bryan, I want to ask you about collateral damage. How do these massive fraud schemes hurt the good guys, the legitimate hospice providers who are actually delivering compassionate end of life care to legitimately, terminally ill patients?

00;20;00;00 - 00;20;23;29

Bryan Nowicki

It's the wide net the government casts. So they're looking for some indicia of problems, like is your live discharge rate higher than the national average. Now that's going to get fraudsters. But there are some legitimate hospices who might be above that average for a number of reasons. Some of the reasons might have to do with the patient choosing to get out of hospice.

00;20;24;02 - 00;20;30;28

Bryan Nowicki

That is, can be perceived as a knock against the hospice when it's really outside the hospices control.

00;20;31;00 - 00;20;32;03

Jonthan Porter

So you have all of.

00;20;32;03 - 00;21;01;01

Bryan Nowicki

the good guys having these consequences imposed on them, starting with investigations. But then CMS has been very quick to pull the trigger on revoking a hospice’s billing privileges based upon some indicia of fraud that really is quite innocently explained when you get your billing privileges revoked, that could be the end of the hospice. Most hospices get 90 plus percent of their revenue for Medicare.

00;21;01;03 - 00;21;21;02

Bryan Nowicki

It's very different from those providers who get private insurance funds and have other payers. Hospices are almost entirely dependent on Medicare. So if CMS does a bit of an investigation and says they're going to stop paying you while they continue this investigation for six months or for a year.

00;21;21;05 - 00;21;50;15

Bryan Nowicki

You might not be around in order to see the results of that investigation. So we've had some of our clients who I will vouch for them, they are the good guys, but their Medicare revenue gets cut off pending an investigation. They have to discharge or transfer their patients dozens, hundreds of patients. They got to lay off their employees. Hopefully those employees find work with other hospices because it's hard to find a better kind of employee than a hospice person.

00;21;50;19 - 00;22;18;13

Bryan Nowicki

They’re so mission driven and dedicated. But you get that regulatory cost that really can be an existential threat to your business. It can hurt the reputation. You get an audit that based upon some of these very gray areas, they're saying you owe the government millions of dollars. And some of those audits are published. And now you have to deal with the public thinking you must be a terrible hospice because CMS is saying you owe millions of dollars.

00;22;18;13 - 00;22;43;05

Bryan Nowicki

Well, look at the rest of this story where hospices are able to fight through that. And at the end of the day, maybe they don't owe much more than a few thousand dollars when you get through all that. So how it affects the patient, because that's one of the most heartbreaking effects, is when these kinds of enforcement activities have the effect of shutting down hospices,

00;22;43;05 - 00;23;07;04

Bryan Nowicki

the good guys, all the other ones who are still around, the other good guys, they see the writing on the wall. Maybe they perhaps tighten up their admission standards beyond what they think is really reasonable. Fewer patients get into hospice because now it's a real risk to bring in the borderline patients who really could benefit from hospice care, but the hospice just doesn't want to take a risk.

00;23;07;06 - 00;23;28;24

Bryan Nowicki

Hospice really started out with mostly cancer patients. I think it's crept into a lot of Alzheimer's patients. They make up a big percentage. But now is it going to creep back to cancer patients? And what about those Alzheimer's patients who could really benefit from it? So it becomes an access to care issue, which heartbreaking from the patient's perspective.

00;23;28;26 - 00;23;50;26

Bryan Nowicki

But it's also a financial problem for CMS. There's studies out there that show hospice care saves CMS money. They spend less on hospice care per patient than if that patient was going to the hospital repeatedly and calling the emergency room. So there's a lot of competing interests out there. Yeah, CMS wants to get the fraudsters and all that.

00;23;50;26 - 00;24;03;02

Bryan Nowicki

But there's there's collateral effects for patient access to care. The ultimate cost of care of patients and losing some of the good guys when you need them the most at a time like this.

00;24;03;05 - 00;24;20;13

Jonthan Porter

Thanks, Bryan. Yeah, totally agree. The heartbreaking part of all of this is what it does to patients. I know that it's very difficult for patients to get claims paid if they're already on hospice without their knowledge. All of a sudden now going to a hospital and trying to get that paid, that creates all these headaches. So that's really bad.

00;24;20;15 - 00;24;37;28

Jonthan Porter

And perhaps the saddest thing in all of this, Bryan, is if you're just an average person and you're not following the details of the news, you just see that there's a whole bunch of hospice fraud. What if you're really sick and all of a sudden you say, well, my doctor says I should go on hospice, but I've read all about hospice on the news.

00;24;37;28 - 00;25;03;23

Jonthan Porter

They say that that's just a bunch of fraud, they may suffer. There may be actual patients who won't go into hospice because they're worried about doing business with fraudsters. They may just paint a broad brush. That's a really sad thing is people are actually going to be suffering because of the egregious fraud that's in the news. Finally, Bryan, know I have a fear that big reported fraud actually impacts not the criminals, but the legitimate providers operating in the same industry.

00;25;03;27 - 00;25;30;01

Jonthan Porter

When whistleblowers and their attorneys are looking at potential qui tam cases, there's an unfortunate reality in that. Whistleblowers are more likely to pursue cases against legitimate hospices with assets rather than these shell companies. If you sue a shell company that moved all of its dollars to another country, then liquidated the account, you're not recovering anything. But not so for the legitimate providers.

00;25;30;01 - 00;25;42;15

Jonthan Porter

So, Bryan, can you talk about how the prevalence of fraud in the news might actually cause FCA regulators to focus enforcement efforts on the wrong targets, on the legitimate providers because they're following the dollars?

00;25;42;18 - 00;26;10;21

Bryan Nowicki

Yeah, I think that is a big problem. And when you look at how fraud is reported and how CMS is leading the way in its broad efforts to combat fraud, where it's certainly getting the fraudsters, but it is also, I think, tainting the industry overall. That kind of opens the pathway for whistleblowers and their attorneys to pick and choose, maybe expand the targets of potential claims.

00;26;10;24 - 00;26;37;13

Bryan Nowicki

And you're right, Jonathan, it's all about the money whistleblowers. If they're successful, they get a certain percentage of whatever recovery is. And if it's a fraudster with no assets and it's going to become a huge collection effort, 15% of zero is still zero. If it's a reputable company that has reputational interests, and they might be more incentivized to settle before anything gets really in the public eye.

00;26;37;16 - 00;27;10;01

Bryan Nowicki

Whistleblowers and their attorneys, they know this. They know the levers to push. And I'm not saying that every False Claims Act claim against a hospice is illegitimate, but it tilts the scales in favor of some more opportunistic efforts to go after hospices. Because if you are going to go with a False Claims Act and the jury's going to be seated and the jury's reading the news, and you try to weed out those that are biased to an inappropriate extent, but are they going to have a good impression or a bad impression of hospices?

00;27;10;03 - 00;27;29;16

Bryan Nowicki

I expect that most people who've had personal connection with a hospice, a legit one, they're going to look very favorably upon a hospice. But if you don't have that personal connection and you're just going off kind of media reports and press releases from CMS and DOJ, you might think, boy, this is just a bad industry out there as a whole.

00;27;29;18 - 00;27;48;17

Bryan Nowicki

What are these guys up to? There must be something wrong with what's going on. So puts a lot of pressure on hospices, which are not the biggest moneymakers out there. It's a lot of not for profit hospices do great work and they're scraping by and to have to suffer through a false claims act, it's just a huge drain on resources unfortunately.

00;27;48;19 - 00;28;08;06

Jonthan Porter

Yeah, that's exactly right, Bryan. So that's what people don't really understand is when there's big egregious stuff like this, you're drawing the attention of the Justice Department, but when the Justice Department's attention is somewhere whistleblowers are going to want to follow and they're not going to sue empty pockets. That's just a very big fact of how the whistleblower board views things.

00;28;08;07 - 00;28;28;29

Jonthan Porter

I'm not saying that's wrong or illogical. They just follow the money because 15, 30%, even of $0, $0, you get a huge default judgment. And if you can never collect it, it's not worth doing. Unfortunately, it's just a reality. And that's where to me is the Justice Department's role is to realize that allegations against legitimate providers don't mean that they did something wrong.

00;28;29;00 - 00;28;50;10

Jonthan Porter

It's just unfortunate that a lot of legitimate providers get caught in the crossfire, because there are illegitimate folks out there. I firmly believe that the shady people out there are doing an incredible disservice to the legitimate people, even more than people realize. And so, Bryan, I'm grateful that you came on the podcast to unpack this big hospice fraud scheme that's been in the news so much the last few months.

00;28;50;10 - 00;28;52;13

Jonthan Porter

Thanks for telling our listeners all about this.

00;28;52;15 - 00;28;55;17

Bryan Nowicki

Great. Thanks for having me on, Jonathan. I hope we get to talk again.

00;28;55;19 - 00;29;11;27

Jonthan Porter

Absolutely. To close, we're going to continue to bring you the stuff that's in the news about healthcare fraud. We're going to focus on that, but we're also going to bring you the nuanced points there, things that aren't necessarily in the news, but that are really important to those who are in industries that see a lot of False Claims Act enforcement.

00;29;11;27 - 00;29;18;07

Jonthan Porter

So to our listeners, thank you for your time today. Thanks for listening to us. And we'll see you next time.

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