The Takeaways:
- There have been repeated healthcare fraud cases related to hospice for financial gain, lack of oversight, complexity of hospice care and pressure to meet targets.
- E&O insurance, also known as professional liability insurance, provides coverage for professionals who make errors or omissions while performing their duties, such as medical professionals.
- Medical professionals, like physicians, should carry E&O insurance to protect themselves in case of claims of negligence or malpractice. In this case, if the physician had E&O insurance, they may have been able to use the coverage to pay for legal fees and damages awarded to the victims.
- E&O insurance, however, does not cover intentional acts of wrongdoing such as fraud like in this case.
Repeated Offenses in Hospice Fraud
According to Fox News on February 9, a Mississippi physician named Nelson has been sentenced to five years in prison plus $15 million in restitution for healthcare fraud connected to hospice operations.
Evidence showed the physician referred numerous patients to hospices even though they were not terminally ill. A quick background information: To qualify for hospice care, doctors must certify a patient has six months or less left to live to receive Medicare coverage. In case the patient improves with increased life expectancy, the hospice is forced to discharge them from their care — otherwise it is considered hospice fraud.
In the above Mississippi fraud case, some patients were able to testify at the trial almost 10 years after Nelson put them on hospice care. You can imagine how bad the system misuse is.
Unfortunately, the case is far from being alone.
According to this report of December 2, 2021, two doctors who helped a local hospice agency scam Medicare were sentenced to a combined 23 years in prison. This case in 2017 also for hospice fraud. Another in 2020 the same. Still another in Texas in 2020.
What Is Hospice Fraud
According to this article, Hospice fraud revolves around hospice care and hospice patients. “It happens when caregivers, facilities, or organizations commit fraud against hospice patients or the public health systems responsible for covering hospice costs.”
The four major types are false claims (the most observed type that defrauds government-funded healthcare programs like Medicare or Medicaid, or charging patients for unnecessary services), kickbacks (incentives hospice providers give to nursing homes for patient referrals), false diagnosis (like in the Mississippi case), and improperly delivered services or products.
Hospices do not always provide needed or adequate care to their patients. These improper cares are called “deficiencies,” which is also a type of fraud. A recent study by the Office of Inspector General at the US Department of Health and Human Services found that over 80% of the hospices they reviewed had at least one deficiency.
Why Hospice Fraud So Popular
Several reasons explain for the frequent fraud related to hospice care:
- Picking Uncle Sam’s pocket: Hospice care is often funded by government programs like Medicare and Medicaid, which can create easy target for fraudulent activities. A common case is overbilling for services or charging for services that were never provided.
- Lack of oversight: The hospice industry is largely self-regulated, which means there may be a lack of oversight and enforcement of rules and regulations.
- Complexity of hospice care: Hospice care can be complex and difficult to navigate, which can create confusion and opportunities for fraud. Patients and families may not fully understand the services they are entitled to, and providers may take advantage of this confusion.
- Lack of education and training: Some hospice providers may not be properly trained in the regulations and laws surrounding hospice care, which can lead to unintentional violations or fraud.
If you ask me, I’d say anything related to seniors in this country is always vulnerable to crime, as many criminals specifically target this subpopulation. Similarly anything related to Uncle Sam is also crime or abuse prone. Hospice care happens to sit at the crossroad of both seniors and government. Fraud is almost inevitable.
What Is Error & Omissions Insurance
Error & Omissions Insurance can help — at least to a certain extent. But first, what is E&O insurance?
E&O is really just professional liability insurance, and is designed to protect professionals and businesses from financial losses that may arise from claims of negligence or mistakes in the services they provide.
Examples of professionals and businesses that may need E&O insurance include:
- Doctors, dentists, and other healthcare professionals
- Lawyers and legal professionals
- Accountants and financial advisors
- Architects and engineers
- IT consultants and software developers
- Real estate agents and brokers
- Insurance agents and brokers
- Advertising and marketing professionals
- Event planners and organizers
- Any business that provides professional services, advice, or expertise to clients.
It seems fair to say that most fields covered by E&O insurance are “brainy businesses.”
Ways E&O Can Help
Here are some ways in which E&O insurance can help professionals:
- Legal costs: If a professional is sued by a client or customer for an alleged error or omission in their work, E&O insurance can help cover the legal costs associated with defending against the claim. In the Mississippi case, the physician could use his E&O to cover the legal costs.
- Damages and settlements: If a professional is found liable for a client or customer’s financial losses due to an error or omission, E&O insurance can help cover the damages or settlements awarded to the plaintiff. Importantly, E&O does not provide coverage for intentional acts of wrongdoing like fraud. So this guy will be out of luck and would have to pay from his own pocket for the $15 million in restitution that the judge ordered.
- Reputation protection: A professional’s reputation can be seriously damaged by a claim of professional negligence or error. E&O insurance can help cover the costs of hiring a public relations firm or marketing professional to restore their reputation. Again, intentional act of fraud does not deserve the protection of reputation.
- Peace of mind: Knowing that they are protected by E&O insurance can give professionals peace of mind, allowing them to focus on their work and serve their clients without worrying about the potential financial consequences of a mistake or error. Again, physicians committed fraud cannot and should not maintain peace of mind from E&O insurance.
In sum, E&O is not designed for fraud but before you are convicted, E&O can certainly help you out. Do not take this benefit lightly. Hiring a top criminal defense attorney can help improve your outcome if you’ve been accused of hospice fraud. Hospice fraud accusations require expert legal assistance and time to clear the charges. These cases involve thorough investigations by multiple agencies. You need an experienced attorney for the best defense.
