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Former Passages Hospice Employees Face Prison, Fines


The former owner of Passages Hospice and its director of nursing will be sentenced for their part in a multi-year, multi-million dollar Medicare scheme.

Passages owner Seth Gillman
Passages owner Seth Gillman. Credit YouTube.

Seth Gillman, 47, an attorney and founder of now-shuttered Passages, pled guilty to one count of health care fraud in an Illinois federal court on Friday. The for-profit hospice company is accused of knowingly over-billing the government for general inpatient care for patients who did not need it.

Gillman was indicted in May 2014 along with three other Passages employees, including former nursing director Carmen Velez, who also pled guilty to one count of conspiracy to defraud the U.S. government on Friday, according to legal news service Law360.

According to the indictment, Gillman, Velez and other employees 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.”

The hospice caused nearly $10 million in government losses, according to prosecutors.

Velez, 39, admitted to altering patient records to reflect a need for general inpatient care before the records were handed over to an auditor working on behalf of the Centers for Medicare and Medicaid Services.

Gillman faces up to 10 years in prison and millions of dollars in restitution and fines. Velez faces less than five years in prison and hefty fines. A status hearing for Gillman and Velez is set for March 16, according to the Department of Justice.

Passages may plead guilty later this month; a status hearing for those representing the company is set for February 22.

Passages administrator, Gwen Hilsabeck, pled guilty to one count of conspiracy to commit an offense against the United States on Thursday.

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.”

Further Reading:

Exclusive: Passages Hospice Was ‘Corrupt To The Top,’ Says Former Employee

Passages Hospice Trial Date Set: Victim Shares Story