The former owners and managers of now-defunct Philadelphia-based Home Care Hospice agreed to pay approximately $9 million to settle allegations that their company falsely claimed and received taxpayer dollars for unnecessary or never provided services, the U.S. attorney's office announced Thursday.
Former co-owner Matthew Kolodesh, co-owner Alex Pugman, development executive Svetlana Ganetsky and CEO Malvina Yakobashvili were accused of fabricating records for patients who were not terminally ill and submitted false claims for services that were not necessary or delivered, costing the Medicare program millions of dollars, investigators said. A federal jury previously found Kolodesh, Pugman and Ganetsky guilty on related criminal charges.
As part of the settlements, the federal government will keep an estimated $8.8 million found in multiple financial accounts that were subject to a restraining order in a related civil injunction action.
The defendants also agreed to make payments to the government—a combined $400,000 from Pugman and Ganetsky, and $425,000 from Kolodesh and Yakobashvili—and to transfer various assets including Pugman's and Kolodesh's condo properties.
"Too often we hear reports of companies that abuse this critical service by enrolling patients who do not qualify for the hospice benefit, do not provide claimed services, or who push patients into services they don't need in order to get higher government reimbursements," acting U.S. Attorney Louis Lappen said in a statement.
Medicare spending has been steadily increasing as the population ages and more hospice providers, both for-profit and not-for-profit, enter the sector. Medicare spending for hospice care rose by more than 400% from $2.9 billion in 2000 to $15.1 billion in 2012, according to the Medicare Payment Advisory Commission, an advisory panel created by Congress.
The federal government has been cracking down on certain hospice providers who game the system to capture higher reimbursements. One example was Genesis Healthcare, which agreed to pay the federal government $53.6 million to settle lawsuits alleging that companies the for-profit post-acute care system acquired submitted false Medicare claims for unnecessary treatment and delivered grossly substandard hospice and nursing care.
The Home Care Hospice suit was filed by former employees Maureen Fox and Cathy Gonzales, resulting in criminal convictions for 22 persons employed by or associated with HCH.