Rural private equity-owned home health and hospice provider settles billing fraud allegations

On August 20, 2024, the Department of Justice announced a $3.85 million settlement with Intrepid USA, Inc. regarding alleged violations of the False Claims Act (FCA).[1]

Headquartered in Dallas, Texas, Intrepid, USA is a home health and hospice company with that serves 29,000 patients each year[2] across 14 states.[3] As of 2021, the company primarily served rural populations.[4] The alleged violations occurred at 19 Intrepid home healthcare facilities between 2016 and 2021; Intrepid was owned by a family office private equity firm called Patriarch Partners for that entire time.[5]

The United States alleged that the 19 facilities submitted claims to Medicare for home healthcare services for patients who did not qualify or were not properly certified as eligible for the Medicare home healthcare benefit, where the services provided were not reasonable or medically necessary, where the services were provided by untrained staff, or where services were not performed. [6]

The United States also alleged that, between 2016 and 2021, three Intrepid hospice facilities admitted patients to hospice care who were ineligible for the Medicare hospice benefit because they were not terminally ill or continued providing services to patients who should have been discharged because they no longer met the requirements for the Medicare hospice benefit. [7]

In the press release announcing the settlement, Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services Office of Inspector General (HHS-OIG) commented,

“Home health is designed to increase health care access for our most vulnerable populations with mobility limitations, while hospice care aims to provide comfort and relief for the terminally ill. Exploiting these systems for financial gain is intolerable. Working with our law enforcement partners, we will continue to pursue health care providers who jeopardize the integrity of these services by prioritizing profit over medically necessary palliative care.” [8]

Patriarch Partners was not named in the press release or settlement. The press release indicated that the $3.85 million settlement amount is based on Intrepid’s ability to pay and that “the claims resolved by the settlement are allegations only. There has been no determination of liability.” [9]

This is at least the third False Claims Act settlement announced this summer between the US government and a private equity-owned home healthcare provider. In May 2024, the Department of Justice (DOJ) announced it had reached a $4.2 million settlement agreement with private equity-owned home health and hospice company, Elara Caring, to resolve allegations that it defrauded Medicare in violation of the False Claims Act over six years.[10] And in early August, the DOJ announced a $19.4 million settlement with private equity-owned home healthcare and hospice giant Gentiva (formerly Kindred at Home) to settle billing fraud allegations.[11]

PESP has found that there is substantial overlap between the risks associated with private equity ownership of health care companies and the activities targeted by the False Claims Act, which establishes penalties for companies that defraud government programs such as Medicare or Medicaid.

See our report: Money for Nothing: How private equity has defrauded government health programs (2021)

The home health and hospice industries, which are heavily dependent on Medicare and Medicaid, have been identified by federal regulators for increased scrutiny and oversight.[12] In addition, the DOJ has indicated that it will pay special attention to private equity’s role in healthcare. In a February 2024 speech, the DOJ’s head of the civil division noted that private equity firms are “providing express direction for how a provider should conduct their business, or more indirectly by providing revenue targets or other indirect benchmarks intended to prioritize reimbursement.”[13]

Resources

[1] United States Department of Justice. “Nationwide Home Healthcare and Hospice Provider to Pay $3.85M to Resolve False Claims Act Allegations.” justice.gov, August 20, 2024. https://www.justice.gov/opa/pr/nationwide-home-healthcare-and-hospice-provider-pay-385m-resolve-false-claims-act.

[2] Intrepid USA. “Home.” Accessed August 22, 2024. https://www.intrepidusa.com/.

[3] Intrepid USA. “Locations.” Accessed August 22, 2024. https://www.intrepidusa.com/locations/.

[4] Holly, Robert. “Intrepid USA Planning for Major Growth Push with New PE Partners.” Home Health Care News, October 26, 2021. https://homehealthcarenews.com/2021/10/intrepid-usa-planning-for-major-growth-push-with-new-pe-partners/.

[5] Holly, Robert. “Intrepid USA Planning for Major Growth Push with New PE Partners.” Home Health Care News, October 26, 2021. https://homehealthcarenews.com/2021/10/intrepid-usa-planning-for-major-growth-push-with-new-pe-partners/.

[6] United States Department of Justice. “Nationwide Home Healthcare and Hospice Provider to Pay $3.85M to Resolve False Claims Act Allegations.” justice.gov, August 20, 2024. https://www.justice.gov/opa/pr/nationwide-home-healthcare-and-hospice-provider-pay-385m-resolve-false-claims-act.

[7] United States Department of Justice. “Nationwide Home Healthcare and Hospice Provider to Pay $3.85M to Resolve False Claims Act Allegations.” justice.gov, August 20, 2024. https://www.justice.gov/opa/pr/nationwide-home-healthcare-and-hospice-provider-pay-385m-resolve-false-claims-act.

[8] United States Department of Justice. “Nationwide Home Healthcare and Hospice Provider to Pay $3.85M to Resolve False Claims Act Allegations.” justice.gov, August 20, 2024. https://www.justice.gov/opa/pr/nationwide-home-healthcare-and-hospice-provider-pay-385m-resolve-false-claims-act.

[9] United States Department of Justice. “Nationwide Home Healthcare and Hospice Provider to Pay $3.85M to Resolve False Claims Act Allegations.” justice.gov, August 20, 2024. https://www.justice.gov/opa/pr/nationwide-home-healthcare-and-hospice-provider-pay-385m-resolve-false-claims-act.

[10] Bugbee, Mary. “Private Equity-Owned Hospice Company Agrees to Pay $4.2 Million Settlement.” Private Equity Stakeholder Project (blog), May 10, 2024. https://pestakeholder.org/news/private-equity-owned-hospice-company-agrees-to-pay-4-2-million-settlement/.

[11] O’Grady, Eileen. “PE-Owned Home Health & Hospice Giant Pays to Settle Federal Billing Fraud Allegations.” Private Equity Stakeholder Project PESP (blog), August 5, 2024. https://pestakeholder.org/news/pe-owned-home-health-hospice-giant-pays-to-settle-federal-billing-fraud-allegations/.

[12] Holly Vossel, “US Justice Department’s Spotlight on Hospice Sends ‘Powerful Message’ to Fraudulent Operators,” Hospice News, June 13, 2023. https://hospicenews.com/2023/06/13/u-s-justice-departments-spotlight-on-hospice-sends-powerful-message-to-fraudulent-operators/

[13] Ben Penn, “US to Prioritize Private Equity’s Role in Healthcare Fraud,” Bloomberg Law, February 22, 2024. https://news.bloomberglaw.com/us-law-week/us-to-prioritize-private-equitys-role-in-healthcare-fraud