80-year-old hospice administrator Antonio Olivera has been sentenced to 30 months behind bars for his involvement in a Southern California hospice fraud scheme.

Between 2011 and 2018, Olivera admitted that he was one of several officials who “paid illegal kickbacks to patient recruiters for the referral of hospice beneficiaries to Mhiramarc Management LLC.”

In addition to the illegal kickback referrals, when staff at Mhiramarc would determine that certain patients were ineligible or did not need to receive hospice services, Olivera would override staff concerns and ensure that the patients were put on hospice service regardless.

By preying on vulnerable individuals and building a list of beneficiaries who did not need hospice services, Olivera and his co-conspirators operated under Mhiramarc and submitted roughly $28 million in Medicare claims. Claims resulted in the hospice being paid over $17 million over the course of the seven years.

The Department of Justice explains “Olivera was personally responsible for $4,769,982 in false and fraudulent claims to Medicare, resulting in Medicare paying Mhiramarc $2,984,914 for medically unnecessary hospice services for beneficiaries, many of whom had been recruited through illegal kickbacks.”

In addition to serving 30 months behind bars, Olivera was ordered to pay restitution fees of $2,193,914. Along with three other co-conspirators, Olivera entered a guilty plea for one count of conspiracy to commit health fraud. The other individuals who participated in the fraud alongside Olivera are awaiting sentencing.

California Sees an Uptick in Hospice Fraud

A report conducted by the U.S. Department of Health and Human Services has found that hospice fraud has been on the rise, and California is leading the pack as the nation's leading state in hospice care complaints. The complaints range from mistreatment of hospice beneficiaries from both the individuals themselves as well as family members to hospice beneficiaries receiving services they do not need.

The California Health Report explains that “unscrupulous hospice providers have signed non-terminally ill patients up for end-of-life care they didn’t need, and then billed Medicare for services and equipment. Patients were often duped into enrolling in hospice with promises of ‘freebies’ such as housekeeping help or personal protective supplies, not realizing they’d signed away their rights to receive life-saving medical care, which isn’t covered when people are in hospice."

Senior care advocates have taken notice of this alarming trend and have pushed for reform in the industry. Patient care advocate with the California Advocates for Nursing Home Reform, Michael Connors, shared with the California Health Report, “The whole system needs to be completely revamped." He adds that many of the for-profit hospice facilities are in the hospice industry for the wrong reasons. Connors adds, “The current situation is intolerable.”

Advocates like Connors explain that potential reasons for an increase in hospice complaints across the state are related to the increasing numbers of hospice facilities. In the past decade, the number of hospice facilities has skyrocketed across California with roughly 1,200 of them being Medicare-certified hospice providers. Because of the rapid growth, it has been difficult for regulation to keep up.

Another advocate and CEO of a non-profit hospice in San Diego, Sarah McSpadden explains that California might want to consider implementing a “certificate of need” law. This type of law allows facilities to open up only if there is an actual need for them in the area. McSpadden explains, “If California limited the number of hospices, they would be able to go and look at the hospices they have more often, evaluate what hospices are actually doing out there, and hold them accountable for the care they’re delivering,”

Advocates including McSpadden and Connors also add that there is a need for existing hospice facilities to be inspected properly. According to the California Health Report, over 80% of existing hospices in the state are inspected by private agencies, not state regulators.

While many advocacy groups explain that tighter restrictions on hospice facilities both in California and across the nation will not eradicate hospice fraud, they will provide greater accountability for hospice operators, doctors, and others in the industry.