Elara Caring Agrees to Pay $4.2 Million to Settle False Claims Act Allegations That It Billed Medicare for Ineligible Hospice Patients

Elara Caring, and its wholly owned subsidiaries JHH/CIMA Holdings Inc., CIMA Healthcare Management Inc., CIMA Hospice of Texarkana L.L.C., CIMA Hospice of East Texas L.L.C. and CIMA Hospice of El Paso L.P., have agreed to pay $4.2 million to resolve allegations that they violated the False Claims Act by knowingly submitting false claims and knowingly retaining overpayments for the care of hospice patients in Texas who were ineligible for the Medicare hospice benefit because they were not terminally ill. 

“The hospice benefit under Medicare provides critical services to vulnerable patients,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to ensure that this benefit is used to assist those who need it, and not to line the pockets of those who seek to abuse it.”

The settlement resolves allegations that Elara Caring’s Texarkana, Texas, location, which previously operated as CIMA Hospice, knowingly submitted false claims for hospice services provided to patients who were ineligible for the hospice benefit because they were not terminally ill.  The patients at issue in the settlement were at the Texarkana location between 2014 and 2019 and in 2020. The settlement also resolves allegations regarding two patients at other Texas locations between 2015 and 2021. The settlement further resolves allegations that Elara Caring knowingly and improperly concealed or avoided obligations to repay overpayments for these patients. 

“I appreciate the Department of Health and Human Services for their assistance in this litigation and helping to protect victims of fraud,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “Settlements like this hold offenders accountable and encourage anyone who suspects fraud involving the Medicare program to exercise their protected rights as whistleblowers.”

“Hospice care is intended to provide comfort and relief for the terminally ill and taking advantage of the system in order to make more money is intolerable,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we will continue to pursue health care providers who jeopardize the integrity of hospice care by prioritizing illegitimate profit over medically necessary services.”

The civil settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the Government’s recovery.  The qui tam lawsuit was filed by Aneko Jackson, a former Elara Caring employee, and is captioned United States ex rel. Jackson v. CIMA Healthcare Management, Inc., et al., Case No. 1:20-cv-00368 (W.D. Tex.).  Ms. Jackson will receive $672,000 in connection with the settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Western District of Texas and HHS-OIG.

The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS at 800-HHS-TIPS (800-447-8477).

Trial Attorneys Martha N. Glover, Kristen M. Murphy and William E. Olson of the Civil Division and Assistant U.S. Attorney Thomas A. Parnham Jr. for the Western District of Texas handled the matter.

The claims resolved by the settlement are allegations only. There has been no determination of liability.