VITAS Healthcare Corporation, a wholly-owned subsidiary of Chemed Corporation(NYSE:CHE), today announced that they “received $80.2 million from the U.S. Federal government from the provider relief fund provided for in the Coronavirus Aid, Relief, and Economic Security (CARES) Act”. This was stated in the Form 8-K submitted to SEC.
This information is not that interesting per se, but if we take a look at the government lawsuit against Chemed Corp. and Vitas Hospice Services, things become a bit more interesting.
The lawsuit, filed May 2, 2013 in the district court for the western district of Missouri, alleged that since at least 2002 Vitas Hospice Services and Vitas Healthcare Corp., the largest provider of for-profit hospice services in the country, “misspent tens of millions of taxpayer dollars from the Medicare program.”
The lawsuit alleged that Vitas Healthcare systematically attempted to overcharge Medicare for services that were either not provided or given to patients who were not eligible for the level of care billed to Medicare. The Justice Department also claimed the company used aggressive marketing tactics and pressured staff to increase the number of crisis care claims submitted to Medicare and set goals for the number of days that were to be billed.
On October 30, 2017, in a press release, Department of Justice said that Chemed Corp. and Vitas Hospice Services Agreed to Pay $75 Million to Resolve False Claims Act Allegations Relating to Billing for Ineligible Patients and Inflated Levels of Care.
“Medicare’s hospice benefit provides critical services to some of the most vulnerable Medicare patients, and the Department will continue to ensure that this valuable 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.”-said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division back in 2017.
One of the most disturbing allegations against Vitas is that the company convinced multiple patients that they were dying from a terminal illness when, in fact, they were not.
It’s really horrible. Nurses testified that they were forced to lie to families, & pretend they were sicker than they really were—so they could be admitted. 😔— Arctic Friend (@FriendEden100) December 17, 2019
The founder of VITAS Hospice was Don Gaetz (Republican politician). He lobbied the legislature to create hospice care programs for the dying. Gaetz founded Vitas Healthcare as a nonprofit, Hospice Care Inc., in Miami in early 1978 with partners Hugh Westbrook and Esther Colliflower. That same year, Gaetz and Westbrook helped pass Florida’s hospice licensure law, which gave their hospice a 20-year head start over for-profit competitors.
They later sold VITAS for $400M in 2004 to Cincinnati-based Chemed, which was best known for Roto-Rooter, plumbing and Water Cleanup service.
According to VITAS they are “the nation’s leading provider of end-of-life care” and according to that Form 8-K “VITAS also currently estimates increased revenue from the suspension of 2% Medicare sequestration from May 1, 2020 to December 31, 2020 to be approximately $15 million to $20 million, excluding the impact of Medicare Cap.”