Passages Hospice Founder Pleads Not Guilty

Passages Hospice Founder Pleads Not Guilty

Posted on Sunday, June 8th, 2014 at 3:37 pm by lifemediamatters

U.S. District Court of the Northern District of Illinois. Google Maps.

U.S. District Court of the Northern District of Illinois. Google Maps.

Four former high-level employees of shuttered Passages Hospice LLC entered a plea of not guilty to health fraud during an arraignment Monday in the U.S. District Court of the Northern District.

Seth Gillman, 45, a partial owner who founded the company in 2005, was first charged in January with health care fraud and conspiracy to defraud the government. According to prosecutors, Passages knowingly over-billed the government by millions of dollars on unnecessary hospice care for seniors.

In May, fraud charges were brought against Gwen Hilsabeck, who served as a co-administrator; Carmen Velez, who served as the director of clinical services and director of nurses for the Chicago region; and Angela Armenta, who served as director of certified nursing assistants for the Chicago region.

The defendants, each released on bond, appeared before U.S. Judge Thomas M. Durkin. A trial date has been set for August 7; Passages Hospice, a corporation, will likely enter a plea then.

According to prosecutors, Gillman, Hilsabeck, Velez and Armenta participated in an elaborate scheme “to cause Passages Hospice LLC to submit false claims to Medicare and Medicaid for medically unnecessary hospice care, namely, hospice care for patients who were not terminally ill and hospice care that did not qualify for general inpatient care.”

Between August 2008 and January 2012, Medicare paid the for-profit hospice company more than $90 million for hospice services, including more than $20 million for general inpatient services. From 2006 to late 2011, Passages submitted claims for about 4,700 patients to Medicare and Medicaid.

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Gillman, Hilsabeck, and Passages allegedly paid bonuses to nursing directors and certified nursing assistant directors employed at the company in order to increase the number of patients receiving general inpatient care. In 2012, Medicare’s daily reimbursement for general inpatient care was $671.84; the daily payment for routine care was much lower, $151.23.

One former employee told LMM she quit after realizing that something felt wrong.

“I left the company a few months before the indictment, after I couldn’t ignore my gut,” she said, asking not to be named as she continues to work in a similar industry. “I was in the dark about the fraud, but I knew deep down I couldn’t be a part of that company anymore. I was appalled to find out how many people were involved in the deceit. I was lucky enough to leave on my own for another job, but my coworkers and friends weren’t. They’re still fighting for pay, vacation time and 401K contributions owed to them.”

In February, Passages closed in light of the allegations against Gillman. The hospice operated in four states, yet the majority of services were provided to Illinois seniors. Earlier that month, employees told LMM that they vowed to continue operating for patients’ sake.

According to the FBI, federal agents have interviewed patients, family members and more than 30 former and current Passages employees. Several reported the allegedly fraudulent billing and marketing practices to Medicare and law enforcement.


More Charged In Passages Hospice Fraud Scandal

Posted on Monday, May 26th, 2014 at 2:17 pm by lifemediamatters

More high-level employees of shuttered Passages Hospice LLC have been charged with health care fraud, according to an indictment released by the U.S. Attorney’s office.

Fraud charges have been brought against Gwen Hilsabeck, who served as a co-administrator; Carmen Velez, who served as the director of clinical services and director of nurses for the Chicago region; and Angela Armenta, who served as director of certified nursing assistants for the Chicago region, according to an indictment filed in the U.S. District Court of the Northern District.

Seth Gillman, 45, a partial owner who founded the company in 2005, was charged in January with health care fraud. According to prosecutors, Passages knowingly over-billed the government by millions of dollars on unnecessary hospice care for seniors.

According to the indictment, Gillman, Hilsabeck, Velez and Armenta participated in an elaborate scheme “to cause Passages Hospice LLC to submit false claims to Medicare and Medicaid for medically unnecessary hospice care, namely, hospice care for patients who were not terminally ill and hospice care that did not qualify for general inpatient care.”

Seth Gillman

Passages Hospice Founder Seth Gillman. Honorable Mention in the 2013 Torch Awards for Marketplace Ethics, hosted by the Better Business Bureau. YouTube.

Between August 2008 and January 2012, Medicare paid the for-profit hospice company more than $90 million for hospice services, including more than $20 million for general inpatient services. From 2006 to late 2011, Passages submitted claims for about 4,700 patients to Medicare and Medicaid.

“Give patients everything they need, even that little extra that makes life worth living,” Gillman told Life Matters Media in November during the unveiling of an end of life care initiative backed by the National Institute for Nursing Research.

However, federal prosecutors allege Gillman was not so selfless.

Gillman, Hilsabeck, and Passages allegedly paid bonuses to nursing directors and certified nursing assistant directors employed at the company in order to increase the number of patients receiving general inpatient care. In 2012, Medicare’s daily reimbursement for general inpatient care was $671.84; the daily payment for routine care was much lower, $151.23.

According to the FBI, federal agents have interviewed patients, family members and more than 30 former and current Passages employees. Several reported the allegedly fraudulent billing and marketing practices to Medicare and law enforcement.

In February, Passages closed in light of the allegations against Gillman. The hospice operated in four states, yet the majority of services were provided to Illinois seniors. Earlier that month, employees told LMM that they vowed to continue operating for patients’ sake.

All four individual defendants, and Passages, are scheduled to be arraigned June 2 in U.S. District Court. The defendants were charged in an 18-count indictment.

Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. Conspiracy to obstruct a federal audit and making false statements regarding a health care benefit program each carry a maximum sentence of five years in prison and a $250,000 fine. Restitution is mandatory.

Gillman, an attorney who told LMM he founded Passages after witnessing his grandmother’s poor end of life care in a south Florida hospice, was the corporate agent, administrator and one-fourth owner of Lisle-based company. Passages did not operate its own inpatient facility, instead deploying nurses to visit hospice patients in nursing homes and private residences.

Hospice is generally care provided in a patient’s home, but it can also be provided in a center, hospital, nursing home or other long-term care facility for people facing illness near the end of life. The number of hospice patients served has risen more than 25 percent during the last five years from 1.25 million in 2008, according to figures published by the National Hospice and Palliative Care Organization.


Passages Hospice Responds To Health Fraud Charges Against Founder

Posted on Thursday, February 6th, 2014 at 8:18 am by lifemediamatters

As Passages Hospice founder and owner Seth Gillman faces federal fraud charges, employees of the for-profit Illinois health care company are vowing to continue providing care to their terminally ill patients.

Gillman has been charged with both health care fraud and obstructing a federal audit. According to prosecutors, Gillman knowingly over-billed the government for hospice care provided to seniors across the state.

According to the charges, Gillman engaged in an elaborate scheme to obtain higher Medicare and Medicaid payments by fraudulently elevating the level of hospice care for patients, many of whom resided in nursing homes he controlled. Some patients were not terminally ill, and they wound up enrolled in hospice care far longer than the required estimated life expectancy of six months or less.

Kansas Swain, Passages public relations director, said Gillman has “stepped away” from the company.

“Mr. Gillman will have to answer for the allegations that have been placed against him, but Passages has been cleared,” Swain said.

Gillman also allegedly trained nurses to look for signs that would qualify a hospice patient for general inpatient care (GIP). For fiscal year 2012, Medicare’s daily reimbursement for GIP was $671.84; the daily payment for routine care was much lower, at $151.23.

From 2006 to late 2011, Passages submitted claims for about 4,700 patients to Medicare and Medicaid. The company received payments of  approximately $95 million from Medicare and approximately $30 million from Medicaid.

Gillman, freed on $150,000 bond, faces 15 years in prison and $500,000 in fines. From March 2009 through April 2011, he allegedly authorized nearly $850,000 in bonuses for himself.

Swain, who described Gillman as a “hard-working” man with an “innovative vision,” said it was difficult for the hospice staff to learn of the allegations.

“The most important thing to him was the patients,” Swain said. “We want to move forward and restore public trust. Nothing has been interrupted.”

According to the FBI, federal agents have interviewed patients, family members and more than 30 former and current employees of Passages, including several who reported allegedly fraudulent billing and marketing practices to Medicare or law enforcement.

Passages Hospice Founder Faces Federal Health Fraud Charge

Passages Founder Faces Federal Health Fraud Charge

The allegations have created a chilling effect on other Illinois hospices.

Jeff Okazaki, communications director for Rainbow Hospice and Palliative Care, a non-profit, said he was not surprised by the allegations.

“Unfortunately, it is something that we’ve seen in the industry across the board now with a lot of the big, for-profit hospices facing lawsuits with these sorts of charges,” Okazaki said.

Rainbow Hospice advises that patients and families look for accreditation before enrolling, specifically from the Community Health Accreditation Program (CHAP). “Anybody can deliver quality hospice care, but it really comes down to the priorities,” Okazaki added.

Hospice is generally care provided in a patient’s home, but it can also be provided in a hospital, nursing home or other long-term care facility for those at the end of life. The number of hospice patients served nationally has risen more than 25 percent over the last five years from 1.25 million in 2008, according to figures published by the National Hospice and Palliative Care Organization.

Okazaki said patients enrolled in hospice should be reviewed about every 90 days by a physician or nurse practitioner to ensure that they are terminal and thus eligible for hospice benefits. Medicare may request documentation about patients enrolled in hospice.

Mary Runge, president of non-profit Horizon Hospice & Palliative Care, said that her biggest concern in the wake of these charges is public perception.

“When something like this happens, it hurts everybody,” Runge said. “I realize these are allegations, but this is not the way the majority of hospices operate. We follow the Medicare rules and regulations.”

She said the alleged conduct at Passages is not reflective of any practice in the industry. “There are so many wonderful hospices in the area,” Runge said. “Whether you are for-profit or not-for-profit, you have to follow the guidelines- and go beyond them, frankly.”

Dr. Balu Natarajan, chief medical officer with Seasons Healthcare Management Inc., said Medicare guidelines require its interdisciplinary team to meet every two weeks to determine an individualized care plan for every patient enrolled in the for-profit hospice program.

“At Seasons, we follow the Medicare guidelines when determining if a person qualifies for the Medicare hospice benefit,” Natarajan said. “The basic principle: two physicians must certify terminal illness, specifically noting that life expectancy is less than six months. Certain diseases have more specific admission and recertification guidelines, according to Medicare. We follow those admission and recertification guidelines diligently.”


Passages Hospice Founder Faces Health Fraud Charges

Posted on Wednesday, January 29th, 2014 at 5:51 am by lifemediamatters

Seth Gillman, founder and partial owner of Passages Hospice LLC, has been charged with health care fraud. According to prosecutors, Gillman knowingly over-billed the government for hospice care for Illinois seniors.

“Give patients everything they need, even that little extra that makes life worth living,” Gillman told Life Matters Media in November during the unveiling of an end of life care initiative backed by the National Institute for Nursing Research. But according to the fraud charges released Monday, federal prosecutors allege Gillman was not so selfless.

According to the charges, Gillman engaged in an elaborate scheme to obtain higher Medicare and Medicaid payments by fraudulently elevating the level of hospice care for patients, many of whom resided at nursing homes he also controlled across the state. Some patients were not terminally ill, and they wound up enrolled in hospice care far longer than the required life expectancy of six months or less.

Gillman also allegedly trained nurses to look for signs that would qualify a hospice patient for general inpatient care (GIP). For fiscal year 2012, Medicare’s daily reimbursement for GIP was $671.84, while the daily payment for routine care was much lower at $151.23.

From 2006 to late 2011, Passages submitted claims for about 4,700 patients to Medicare and Medicaid and was paid approximately $95 million from Medicare and approximately $30 million from Medicaid. Between July 2008 and late 2011, Passages was paid $23 million by Medicare for GIP services, in addition to Medicaid payments for similar services submitted on behalf of about 200 patients.

Gillman, 46, of Lincolnwood, IL was charged with one count each of health care fraud and obstructing a federal audit in a criminal complaint that was filed in U.S. District Court late last week.

Gillman, an attorney who founded Passages after witnessing his grandmother’s poor end of life care in a hospice in south Florida, is the corporate agent, administrator and one-fourth owner of Lisle-based Passages Hospice LLC. He is the agent and secretary of Asta Healthcare Company Inc., which operates a handful of Asta Care Center nursing homes across the state– Passages did not have its own inpatient facility but instead deployed nurses to visit hospice patients in nursing homes and private residences.

Passages is a fast-growing care network

Passages is a fast-growing care network based in Illinois

Passages declined to return numerous phone calls from Life Matters Media seeking comment. The hospice’s website makes no mention of Gillman’s legal troubles; the company’s official Twitter account continues to advertise their services.

“The complaint was brought only against Seth Gillman, not Passages,” said Katten Muchin Rosenman Partner Gil Soffer, who represents Passages, in a statement to LMM. “The period of alleged misconduct set forth in the complaint ended in January 2012, more than two years ago. The company continues to provide high quality care to its patients.”

According to the FBI, federal agents have interviewed patients, family members and more than 30 former and current employees of Passages, including several who reported allegedly fraudulent billing and marketing practices to Medicare or law enforcement.

If convicted of health care fraud, Gillman could face a penalty of 10 years in prison and a $250,000 fine. If convicted of obstructing a federal audit, Gillman could face up to five years in prison and a $250,000 fine.

Hospice is generally care provided in a patient’s home, but can also be provided in a center, hospital, nursing home or other long-term care facility for people facing illness near the end of life. The number of hospice patients served has risen more than 25 percent over the last five years from 1.25 million in 2008, according to figures published by the National Hospice and Palliative Care Organization in the organization’s 2013 annual publication “Facts and Figures: Hospice Care in America.”


Illinois Hospice Unveils Collaborative Care Initiatives

Posted on Thursday, November 21st, 2013 at 3:01 pm by lifemediamatters

In an effort to help teach medical professionals how collaborative and coordinated care for the terminally ill results in improved patient outcomes and decreased hospital spending, Illinois-based Passages Hospice unveiled two new programs this week in celebration of National Palliative Care Month.

Passages was the only U.S. hospice chosen to participate in two new initiatives aiming to reduce hospital readmissions, the INTERACT program and Bridge Model. INTERACT (Interventions to Reduce Acute Care Transfers) provides detailed tracking and observations that could help prevent hospitalizations; Bridge uses community resources to ease patients’ transitions out of hospitals and back into their homes, said Kaitlyn Henderson, Passages communication manager. Both programs are backed by the National Institutes of Health.

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Kaitlyn Henderson and Shelley Johansen at Passages Hospice celebration of new initiatives

“INTERACT is a system for skilled nursing facilities that trains them to look at the resident from every health care perspective, to look at their risks in advance instead of residents having to go to the hospital,” said Shelley Johansen, Passages chief marketing officer. “One of the reasons health care costs are where they are is because chronically ill elderly go in and out of hospitals.” The Bridge Model, Johansnen explained, places a licensed social worker within a patient’s hospital who follows him or her for 30 days after discharge to help ensure their well-being. “The whole goal is to keep patients at home or at a skilled nursing facility,” she said.

Nearly 120 medical professionals attended the unveiling of the programs at Chicago’s Carnivale restaurant; the event featured a flash mob of professional dancers in nursing scrubs. “It’s National Hospice Month, and we wanted to celebrate life,” Johansen said.

Passages Hospice Founder Seth Gillman told Life Matters Media that he works to keep his hospice progressive and cutting-edge because he remembers his own grandmother’s poor end of life care in a south Florida hospice. “She started constantly calling me and asking me for stuff and complaining about her care,” he said. “I saw that there were a lot of areas in the hospice delivery that were not really patient-centered, and it forced me to get involved.”

Gillman recounted memories from childhood, a time when his grandmother used to insist upon looking her best before welcoming visitors into her home. “But her hospice would not pay for makeup artists or beauticians for her, so she didn’t have many visitors while in hospice. I was like, ‘This is a person you’re dealing with- allow her to take visitors and look her best.’”

Now, Gillman says, every patient is like a grandmother. “Give patients everything they need, even that little extra that makes life worth living.”

Learn more about hospice here.