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Passages Hospice Trial Date Set: Victim Shares Story

Passages owner Seth Gillman. (Credit:
Passages owner Seth Gillman. Credit: YouTube.


The fate of four individuals accused of defrauding the government by providing unnecessary hospice care services to seniors will be decided by a jury this winter.

The health fraud trial involving Lisle, Illinois-based Passages Hospice, LLC is set for Feb. 16, 2016, an official with the Department of Justice told Life Matters Media. A status hearing is set for Nov. 6.

Seth Gillman, 46, a partial owner who founded the company in 2005, was first charged in January 2014 with health care fraud and conspiracy to defraud the government. According to prosecutors, Gillman and Passages over-billed the government by millions of dollars.

Fraud charges were also brought against Gwen Hilsabeck, who served as a co-administrator; Carmen Velez, who served as 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. They were all released on bond and pleaded not guilty.

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.

U.S. District Court in Chicago. (Credit: Google images)
U.S. District Court in Chicago. (Credit: Google Maps)

Gillman, Hilsabeck and Passages also 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.

Last year, Passages closed in light of the allegations. The hospice operated in four states, but the majority of services were provided to seniors in Illinois.

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

Hospice care is usually reserved only for patients with a life-expectancy of six months or less. It is generally provided in a patient’s home, but it can also be provided in a center, hospital, nursing home or other long-term care facility.

Passages did not operate an inpatient facility, instead deploying nurses to visit hospice patients in nursing homes and private residences.

Victim Speaks

Caregiver Cindi Chadwick said she was told by employees of Passages that her sister was dying and had only weeks left to live. They encouraged Chadwick to enroll Janet Schumpert, who is blind, deaf and mentally ill, into their hospice program.

“She was a prime victim for them,” Chadwick told LMM. Schumpert was a resident of Asta Care Center, which Passages owned.

“They had told me that she had Stage IV esophageal cancer, so they only gave her six to eight weeks to live,” Chadwick said. “They called in Passages Hospice, and naturally, I went along with it. Who is going to say that somebody has cancer when they don’t?”

Chadwick became suspicious after six months of hospice care had passed, and Schumpert appeared fine without receiving chemotherapy. Soon after, she set up a care plan meeting with the nursing home. At that time, she was told that her sister had thyroid cancer instead.

When a news report about Gillman’s fraud case appeared on her Facebook feed, she began to put the pieces together. “I got a call from her nurse who said, ‘I’m no longer going to be treating your sister,’ ” Chadwick explained.

Schumpert just turned 60 and is cancer-free. Even though Chadwick paid for funeral arrangements, she is most upset about the emotional costs associated with believing her sister would soon die.

“I was freaking out because she’s my little sister,” Chadwick offered. “It’s not crazy, it’s criminal. She wasn’t the only one being victimized by this.”