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Hospice Company SouthernCare Inc. to Pay $6 Million in Medicare Fraud Settlement

Two cases brought against an Alabama-based hospice company will result in an almost $6 million settlement payment. In two whistleblower complaints filed in 2013 by two former employees, one of which who worked as a clinical director in a Pennsylvania branch, SouthernCare Inc. is accused of wrongly billing Medicare for unnecessary hospice care. When the federal government decided to intervene in September of 2016, the cases were combined.

The complaints against SouthernCare include allegations that the company put patients in their hospice program who weren’t terminally ill in order to submit claims for the more expensive treatment to the government health insurance plan for seniors. SouthernCare denies the claims but did promise to pay almost $6 million to clear up the allegations. The two whistleblowers, Dawn Hamrock and Patricia Beegle, will share slightly more than $1 million of that, according to the settlement agreement.

Hamcock, the former Pennsylvania clinical director who resigned from the company in 2012, raised questions prior to her resignation regarding the way in which SouthernCare was handling Medicare claims.

In a comparable case in 2009, the hospice company paid $24.7 million to clear up similar whistleblower lawsuits. These suits also claimed SouthernCare was admitting patients into their hospice program who did not qualify in order to submit fraudulent claims for payment to Medicare. The two women who filed the False Claims Act on behalf of the United States received $4.9 million each.

As result of the 2009 settlement and in order to maintain the company’s future compliance, SouthernCare entered into a Corporate Integrity Agreement with the Office of Inspector General (OIG), U.S. Department of Health and Human Services (HHS).

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