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Odyssey Whistleblower Case In Milwaukee Brings $25 Million To The U.S. Treasury

On Behalf of | Mar 1, 2012 | Whistleblowing |

Cross Law Firm, S.C., announced the settlement of its client’s qui tam lawsuit against the for-profit hospice chain, Odyssey Healthcare, Inc. Odyssey agreed to pay $25 million to the federal government to resolve qui tam lawsuits that alleged that it submitted false claims to Medicare for hospice services provided to ineligible patients and for continuous home care services that were not provided in accordance with requirements of the Medicare Program. The initial case was filed in federal court in Milwaukee by Cross Law Firm, S.C.and two other cases were subsequently filed.

The $25 million settlement is about double the 2006 settlement of a similar qui tam claim also brought in federal court in Milwaukee by Cross Law Firm, S.C., against the same company. Odyssey has since been purchased by Gentiva Health Services, one of the largest for-profit hospice care companies in the United States.

After the initial complaint was filed in 2008 by Cross Law Firm, S.C., other qui tam claims were subsequently filed on similar allegations by whistleblowers in Virginia and Texas, alleging nationwide fraudulent billing practices. All of the complaints were concluded as part of the $25 million settlement. According to the qui tam complaints, Odyssey submitted false claims to the Medicare Program through a systemic pattern and practice of enrolling and recertifying nonterminal patients, billing for continuous care when such care was neither reasonable nor necessary, and providing inadequate services and other violations of the Medicare Conditions of Participation. The lawsuits also alleged that the company’s actions were in direct violation of a Corporate Integrity Agreement that Odyssey had signed in 2006 as part of its settlement of the qui tam lawsuit brought by Cross Law Firm, S.C.‘s client, JoAnn Russell, whose claims were settled with a $12.9 million payment to the federal government.

Jane Tuchalski, a whistleblower “relator” in Cross Law Firm, S.C.‘s complaint, was previously employed by Odyssey, where she worked on the front lines as a registered nurse, providing direct patient care to patients in Wisconsin. Tuchalski observed what she alleged as violations of the Medicare program and consulted Cross Law Firm, S.C., after Odyssey fired her.

“Employees need to know that the False Claims Act protects them against retaliation and that they can stand up for what is right without being afraid,” Tuchalski explained. The False Claims Act provides that employees who are fired in response to their opposition to Medicare billing fraud are entitled to double back pay and benefits as well as special damages. Tuchalski, who alleged she had been fired due to her concerns about Odyssey’s conduct, resolved those claims confidentially with the company, separate from the $25 million settlement with the United States government.

“The real heroes of these cases are the medical professionals who stood up against the alleged fraud. The real winners in this fraud-fighting story are the taxpayers,” Cross said. “In addition, cases such as these benefit our loved ones as they age and become eligible for Medicare benefits,” said Cross. “Qui tam settlements serve to warn all providers who submit claims to Medicare, that fraud will not be tolerated,” Cross explained.

The Medicare hospice benefit was designed to provide terminally ill patients with comfort and pain relief, as well as emotional and spiritual support. Continuous home care, which is a 24-hour nursing service, is allowed only during periods of crisis in which a Medicare beneficiary requires continuous care to achieve palliation or management of acute medical symptoms.

“Odyssey was expected to practice strict adherence to Medicare requirements after the prior lawsuit was settled,” said Cross. Instead, according to allegations in the complaints, Odyssey disregarded some of the terms of its Corporate Integrity Agreement that were part of the 2006 settlement.

“Particularly in hospice care, violations of the Medicare program can result in harm to patients,” said Cross. “When patients are admitted to hospice care prematurely, they may also prematurely cease receiving medical treatment and instead receive only palliative care such as pain relief and social services essential to end of life,” she explained. Cross also stated that intense Continuous Care services are only eligible for Medicare coverage in limited situations and, when Continuous Care is warranted, it must be performed in accordance with Medicare requirements.

The False Claims Act allows private citizens with detailed knowledge of fraud to bring an action on behalf of the government and to assist in the recovery of the government’s stolen health care dollars. The statute allows the government to recover three times the amount it was defrauded, in addition to civil penalties of $5,500 to $11,000 per false claim. Successful whistleblowers can receive between 15 and 30 percent of the government’s recovery.

Odyssey will pay the federal government $25 million to settle allegations raised in the qui tam lawsuits. The whistleblowers will collectively receive $4,687,500 from the settlement amount. “The American people won out against one of our country’s hospice giants,” Cross said.

The federal government was represented by an exceptional team of government attorneys, including Assistant United States Attorney Stacy C. Gerber Ward, U.S. Attorney’s Office in the Eastern District of Wisconsin in Milwaukee.

The initial whistleblower case filed by Cross Law Firm, S.C., is captioned United States ex rel. Rouse, et al. v. Odyssey Healthcare, Inc., Case No. 08-C-0383 (E.D. Wis.). Other related complaints were subsequently filed.