May 9, 2013

Largest U.S. hospice company sued for Medicare fraud

Kelli Kennedy / The Associated Press

FORT LAUDERDALE, Fla. — The Department of Justice is suing the hospice company founded by Florida's Senate president, accusing it of submitting tens of millions of dollars in fraudulent Medicare claims for more than a decade, including while Don Gaetz was vice chairman of the board.

Vitas Hospice and Vitas Healthcare submitted claims for emergency services for patients that weren't needed, weren't provided, or were provided to patients who weren't eligible under Medicare requirements, according to the DOJ. The companies set goals for the number of crisis-care days to be billed and pressured their employees to submit more claims so it would get more revenue, the lawsuit said. The agency said Medicare payments for crisis care can be hundreds of dollars greater than typical hospice care payments.

Vitas is the largest U.S. hospice care chain, and its parent company Chemed Corp. said the claims go back to 2002, two years before it acquired the company.

Gaetz told The Associated Press on Thursday that he has not been involved with the management of the company for about 13 years, saying he gave up a management role in 2000 when he became Okaloosa County's school superintendent. He founded the company in the early 1980s with Rev. Hugh Westbrook, a Democratic activist, and Esther Colliflower, a nurse. Starting with an $1,800 investment, they turned Vitas into the largest company of its kind before selling it for millions to Chemed in 2004. That's made Gaetz, R-Niceville, one of the Legislature's wealthiest members with a net worth of about $25 million.

"I continued to be a shareholder and member of the board of directors until the company was sold in 2004," he said, adding that he doesn't currently "own a single share of stock and I have no role with the company in any capacity."

Gaetz was vice chairman of the board during part of the time that federal investigators allege the fraud took place, but he said he had no "role in the operation of the company" when he served as vice-chair.

"It's heartbreaking to see an organization which I remember as one of the formative change agents in end-of-life care in this country having to deal with a complaint like this but it's not something that I have any knowledge of or any connection with," he said.

Chemed said in a statement that it will fight the lawsuit "vigorously."

The lawsuit was filed Thursday, the night before the Florida session ended. The next day, shares of Chemed lost $14.27, or 17.5 percent of its value, to $67.52 in afternoon trading.

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