Hospice Provider Agrees to $25 Million Settlement

An Alabama hospice company that cares for terminally ill patients in 15 states it will pay $24.7 million to settle allegations that it submitted false reimbursement claims to the government.

The privately owned SouthernCare Inc. said Thursday it reached the agreement with the Justice Department in lawsuits filed in 2005 after two employees exposed the practice. The workers will receive nearly $5 million under a federal law that lets whistleblowers share in the settlement.

The government said an investigation showed the company, with nearly 100 locations that care for about 5,000 people daily, charged Medicare for hospice care for patients who didn't qualify.

"Our investigation showed a pattern and practice to falsely admit patients to hospice care who did not qualify and to bill Medicare for that care," U.S. Attorney Alice Martin said in a statement.

She said taxpayers footed the bill.

Patients who have six months or less to live can receive Medicare-funded hospice care under government rules, but the government accused SouthernCare of submitting claims for patients who did not meet those requirements.

A company statement said SouthernCare did not admit any wrongdoing and remains eligible for government reimbursements. Besides the payment, the company said it agreed to enhanced government oversight for five years.

"We are pleased to put this matter to rest so we can focus on what we do best — serving patients and families with compassion and dignity — rather than remain tangled in protracted legal issues," CEO Michael J. Pardy said in a statement.

The complaints resulted from allegations made by two former SouthernCare employees, Tanya Rice and Nancy Romeo. They will receive $4.9 million for filing the lawsuits, according to the Justice Department.

Founded in 1995, SouthernCare calls itself one of the nation's largest hospice companies. It provides end-of-life services to patients in private homes and facilities including group homes, assisted-living facilities and skilled nursing facilities.

Besides Alabama, the company has locations in mostly rural areas of Georgia, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Ohio, Pennsylvania, South Carolina, Texas, Virginia and Wisconsin.