Kindred and Related Entities Agree to Pay $19.428M to Settle Federal and State False Claims Act Lawsuits Alleging Ineligible Claims for Hospice Patients

Gentiva, successor to Kindred at Home, has agreed to pay $19.428 million to resolve allegations that Kindred at Home and related entities (Kindred) knowingly submitted false claims and knowingly retained overpayments for hospice services provided to patients who were ineligible to receive hospice benefits under various federal health care programs. Gentiva’s hospice operations, headquartered in Atlanta, include entities that previously operated Kindred at Home hospice locations under the names Avalon, Kindred, SouthernCare and SouthernCare New Beacon.

“The hospice benefit under Medicare and other federal health care programs provides critical services to some of the most vulnerable patients,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will ensure that this important benefit is used to assist those who need it, and not as an opportunity to line the pockets of those who seek to abuse it.”

The settlement resolves allegations made by the United States and the State of Tennessee in a consolidated complaint filed in 2021 against certain Kindred related entities alleging that, from 2010 until February 2020, the defendants knowingly submitted or caused to be submitted false claims for hospice services provided to Avalon hospice patients in Tennessee who were ineligible for the Medicare or Medicaid hospice benefit because they were not terminally ill. The settlement also resolves the complaint’s allegations that the defendants improperly concealed or avoided Avalon’s obligation to repay those hospice claims.

In addition, the settlement resolves allegations that certain Kindred, SouthernCare and SouthernCare New Beacon hospice locations knowingly submitted, or caused to be submitted, false claims for hospice services provided to patients who were ineligible for hospice benefits under Medicare and other federal health care programs because the patients were not terminally ill. Those hospice locations were Kindred’s locations in Warwick, Rhode Island; Beaumont, Texas; and Independence, Missouri; SouthernCare New Beacon’s location in Demopolis, Alabama; and SouthernCare’s locations in Daphne, Alabama; Mobile, Alabama; South Bend, Indiana; and Youngstown, Ohio. The settlement also resolves allegations that those Kindred, SouthernCare and SouthernCare New Beacon locations knowingly and improperly concealed or avoided obligations to repay the foregoing hospice claims.

Further, the settlement resolves allegations that SouthernCare New Beacon allegedly violated the Anti-Kickback Statute by willfully paying renumeration to a consulting physician, between Oct. 1, 2016, and Oct. 1, 2022, to induce hospice referrals of Medicare beneficiaries to its Gadsden, Alabama, location. The settlement of those allegations stems from a voluntary self-disclosure made by New Beacon Healthcare Group LLC doing business as SouthernCare New Beacon Hospice. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded health care programs. It is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

“Hospice provides vital care and support for terminally ill patients and their families. Medicare’s and TennCare’s eligibility requirements ensure that federal and state health care money is properly used to support hospice programs,” said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee. “We are committed to holding accountable health care companies and providers who prioritize profits over patient care by ignoring these requirements.”

“This office remains committed to safeguarding public monies,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “I commend the work of all those in the department who have made this successful settlement possible and truly appreciate the strong working relationships that exist between the United States Attorneys’ Offices, the Civil Division’s Fraud Section and our law enforcement partners.”  

“My office remains determined to ensure that federal funding for essential health care, like the hospice care at issue in this investigation, goes to the patients who need it, rather than to health care companies who seek to exploit those patients for profit,” said U.S. Attorney Zachary A. Cunha for the District of Rhode Island. “Today’s result reflects a concerted effort by this office and U.S. Attorneys’ Offices around the country, working alongside the Fraud Section of the Justice Department’s Civil Division, and our law enforcement partners, to help to guarantee that Medicare funds are directed where they belong and that high-quality hospice care is available for patients and their families in the future.”

“Hospice care is special end-of-life care intended to provide comfort for terminally ill patients. The decision to provide hospice services should be prompted by a patient’s terminally ill medical diagnosis, not a hospice provider’s desire to increase profits,” said U.S. Attorney Todd Gee for the Southern District of Mississippi. “The continued work of the department and our law enforcement partners is critical to the integrity of these important programs. I appreciate the work of all involved in this significant case.”

“Our office is committed to protecting federal healthcare programs like the Medicare hospice benefit from false claims” said U.S. Attorney Sean Costello for the Southern District of Alabama. “We will hold accountable any providers that abuse taxpayer dollars.”

“The integrity of hospice care is critical to the millions of patients receiving these services,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “We, along with our law enforcement partners, will continue to ensure that providers who focus on personal financial gain rather than providing medically necessary, high-quality hospice care will be held accountable.”

The Medicaid program is funded jointly by the state and federal governments. As a result of the settlement announced today, the federal government will receive $18,956,151.32, the State of Tennessee will receive $448,800 and the State of Ohio will receive $23,618.68.

The settlement includes the resolution of claims in nine lawsuits brought under the qui tam or whistleblower provisions of the False Claims Act by various current and former Kindred employees. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam cases are captioned: United States ex rel. Pence, et al. v. Curo Health Services Holdings, Inc., et al., Civil Action No. 3:13-00672 (M.D. Tenn.); United States,, et al. ex rel. Anderson et al. v. Curo Health Services, LLC d/b/a Avalon Hospice, Civil Action No. 3:20-cv-00168 (M.D. Tenn.); United States ex rel. Riar v. Kindred Healthcare, Inc., et al., Civil Action No. 3:18-CV-52 (W.D. Ky.); United States ex rel. Didde, et al. v. Kindred Healthcare Inc. et al., Civil Action No. 19-2321-JWB-JPO (D. Kan.); United States ex rel. Mut v. Gentiva Certified Healthcare Corp. D/B/A Kindred at Home, Civil Action No. 1:21-cv-00425-JJM-PAS (D.R.I.); United States ex rel. Harris v. SouthernCare, Inc., Civil Action No. 3:18-cv-643-HTW-LGI (S.D. Miss.); United States,, et al. ex rel. Roy v. Curo Health Services, LLC, et al., Civil Action No. 3:18-cv-643-HTA-LRA (S.D. Miss.); U.S. ex rel. Petrey v. Curo HealthCare Services, LLC, et al., Civil Action No. 1:19-CV-00617 (S.D. Ala.), and United States ex rel. Medved, et al. v. SouthernCare, Inc. D/B/A SouthernCare, et al., Civil Action No. 2:23-cv-3345 (S.D. Ohio). The share of the settlement to be received by the whistleblowers has not yet been determined.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division's Commercial Litigation Branch, Fraud Section and the U.S. Attorneys’ Offices for the Middle District of Tennessee, Western District of Kentucky, District of Kansas, District of Rhode Island, Southern District of Mississippi, Southern District of Alabama and Southern District of Ohio, with assistance from HHS-OIG, the Defense Criminal Investigative Service, the Office of Personnel Management Office of Inspector General, the Department of Veterans Affairs Office of Inspector General, the Office of the Tennessee Attorney General and the Office of the Ohio Attorney General.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).

Trial Attorney William E. Olson of the Civil Division’s Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorneys Wynn M. Shuford for the Middle District of Tennessee, Jessica R.C. Malloy and William F. Campbell for the Western District of Kentucky, Jon P. Fleenor for the District of Kansas, Kevin Love Hubbard for the District of Rhode Island, Deidre Lamppin Colson for the Southern District of Mississippi, Nina T. Herring for the Southern District of Alabama and W. Hunter West and Michael J. T. Downey for the Southern District of Ohio handled the matter.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

Settlement