A hospice provider in Bensalem, Pa. has opted to pay $2 million to resolve allegations of hospice fraud.

The allegations against the hospice provider, Compassionate Care of Gwynedd Inc. were that it had collected government insurance reimbursements after providing unnecessary services and admitting patients by using a “debility” diagnosis that was not medically justified. “Debility” refers to physical weakness, particularly resulting from an illness.

Compassionate Care is a subsidiary of Compassionate Care Hospice Group Inc., based in New Jersey.

The hospice fraudallegations claimed that Compassionate Care took care of patients who did not require hospice care and then billed Medicare for the services rendered.

According to the Commercial Litigation Branch of the Justice Department’s Civil Division and of the findings of the investigation by the U.S. Attorney’s Office for the District of New Jersey, the hospital fraud allegations came about from a federal False Claims Act filed from a whistleblower suit.

The U.S. Attorney’s Office says, moreover, that the whistleblowers who filed the suit (who refrained from being identified) will be granted more than $350,000 of the recovery under the False Claims Act.

In whistleblower cases, a whistleblower is rewarded depending on the amount of money the government can recover. A successful whistleblower may usually recover approximately 15% and 25% of the government amount recovered. The amount received may also be determined by the amount of work the whistleblower and attorney may have performed to assist the federal government in recovering the money.

According to the attorney representing one of the whistleblowers, “hospice fraud exploits our most vulnerable members of society at the expense of U.S. taxpayers. It is vital for employees of healthcare organizations to speak up if they suspect Medicare or Medicaid billing fraud.”

The hospice fraud settlement mentions that Compassionate Care does acknowledge the settlement but has stated that it admits no violations.

According to their statement, they have said, “CCH remains firmly committed to maintaining a robust compliance program and has cooperated with the government throughout its investigation of the allegations at issue in the settlements.”

The complaint, filed in August 2011, had accused Compassionate Care of falsely certifying that patients were terminally ill, not removing patients who no longer qualified for hospice care, and billing for services not rendered. Compassionate Care allegedly violated anti-kickback laws by offering nursing home employees food and medical equipment in exchange for access to patients. The complaint also accused Compassionate Care of obtaining patient records in violation of federal medical records laws.

The Hospice Fraud Lawsuit is Case No. 1:10-cv-03484, in the U.S. District Court for the District of New Jersey.