The U.S. Justice Department has reached a $12 million settlement with Hospice of Arizona LC, American Hospice Management LLC, and their parent corporation, American Hospice Management Holdings LLC.  Those organizations have agreed to pay the $12 million to resolve allegations that they violated the False Claims Act by submitting false claims to the Medicare program for ineligible hospice services.

The Medicare hospice benefit is available for patients who have a life expectancy of six months or less if their disease runs its normal course.  Patients admitted to a hospice stop receiving care to cure their illnesses and instead receive medical care focused on providing them with relief from the symptoms, pain, and stress of a terminal illness.

The settlement resolves allegations, initially made by a former employee, that Hospice of Arizona submitted false Medicare claims between Sep. 1, 2002 and Dec. 31, 2010 for Hospice of Arizona patients who didn't need end-of-life care or for whom the hospice billed Medicare at a higher reimbursement rate than allowed.

Hospice of Arizona administrator Steve Larkin released a statement on the settlement:

“Hospice of Arizona fully cooperated with this investigation. We are glad to put it behind us so that our team of doctors, nurses, aides, social workers and other health care professionals can continue to provide our patients and their families with the highest level of care they have come to expect. We are proud of our 20-year record, having served more than 30,000 terminally ill patients throughout Arizona. We note that the DOJ did not find, nor even suggest, that the Company has ever provided anything but the highest quality services to each of its patients and their families.

"The large majority of reimbursements challenged by the DOJ were related to admissions prior to American Hospice’s 2004 acquisition of HOA and the institution of robust compliance and electronic medical record systems.  Rather than continuing to challenge interpretation of decade-old clinical documentation, the Company deemed it best to conclude this chapter and move forward with a continued focus on service excellence.”