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Caris agrees to $8.5M settlement over false claims for hospice care

A Tennessee registered nurse filed suit in 2014 alleging Caris had submitted false claims for medical care to the federal government.

A Tennessee hospice care provider will pay $8.5 million to settle allegations it admitted and sought to keep patients who didn't actually qualify for hospice care, according to the U.S. Attorney's Office for the Eastern District of Tennessee.

The settlement with Caris Healthcare L.P. resolves a 2014 whistleblower lawsuit filed in Knoxville federal court by Barbara Hinkle, a registered nurse and Tennessean who formerly worked for Caris. The document was filed under the federal False Claims Act.

As the whistleblower, Hinkle gets $1.4 million, according to the U.S. Attorney's Office.

Caris, in a release Monday afternoon, said the settlement is not an admission of liability. Rather, it resolves ongoing litigation and allows it to focus on its patients, the statement reads.

Caris, a for-profit firm, provides hospice care in about two dozen locations in Tennessee, South Carolina and Virginia. Its billing department is in Knoxville, according to the government.

Starting in 2013, it began seeking and keeping patients on its roles who actually were not in need of hospice care, a lawsuit alleged. The company had a financial incentive to grow its patient list, the lawsuit alleged.

Bills were ultimately paid by Medicare, the government insurance program. Most of Caris's patients are Medicare or Medicaid beneficiaries.

Even after it was notified that some of its hospice patients actually were not hospice patients, Caris kept submitting claims and "took no meaningful action to determine whether it had previously received improper payments for these and other patients that should have been returned to Medicare."

To receive hospice benefits, a patient must get medical certification confirming their terminal status. Care is meant to ensure a dying patient is comfortable.

Hinkle worked about 10 months in 2013 as a hospice nurse. Her job included initial admission assessment and looking after patients.

Caris, the lawsuit alleged, was under pressure to continue bringing in new patients in order to make money. It had to ensure, however, that the patients were appropriately diagnosed and qualified for hospice care.

Hinkle repeatedly recommended against admitting some patients to hospice based on her assessment, her lawsuit states.

According to the lawsuit, Hinkle was told by superiors to "chart negatively," meaning to provide details indicating patients were showing further signs of decline because they were terminally ill. In some cases, however, Hinkle alleges patients actually were not slipping.

The lawsuit alleged some 40 percent to 50 percent of Caris' claims for payment were "false or fraudulent." The government, however, paid the claims thinking they were legitimate.

Hinkle treated patients in the Bristol, Va., area but sometimes looked after patients in the Johnson City, Tenn., area, according to the lawsuit.

Terms of the settlement call for Caris to pay $8.5 million plus interest, but it doesn't have to pay attorneys fees to Hinkle's lawyers, according to Caris.