A New Jersey company pressured nursing home staff to refer ineligible patients to hospice care, exaggerating their conditions and defrauding the government in the process, a federal whistleblower lawsuit alleges.
Sherri McDermott of Paramus, NJ, a nurse who worked for hospice company Life Source Services for several months in 2017, claims she was fired after she pushed back against changing medical records needed to claim Medicare and Medicaid coverage.
The lawsuit, originally filed in US District Court in New Jersey in 2019, was quietly unsealed in 2021 after the federal government declined to intervene. It gained renewed attention late last year as a pharmacy dragged into the case sought to be dropped as a defendant.
Though the suit outlines alleged behavior that took place in nursing homes, Life Source, its affiliates and the pharmacy are the only defendants. The company provides hospice services in nursing homes and inpatient facilities and also provides at-home hospice care, according to court documents reviewed by McKnight’s Long-Term Care News.
Rob Hennig, an attorney representing the plaintiff, told NorthJersey.com that Life Source’s hospice referrals ensured patients received unnecessary services.
“They were using people’s family members as profit centers,” Hennig said. “That’s just simply unacceptable.”
The case is unfolding as hospice providers nationally, especially for-profit firms, are under attack for allegedly using quotas and other unscrupulous business methods. For-profit firms now make up 70% of the hospice market.
New Jersey has seen a 20% increase in the number of licensed hospice providers over the past five years, to 119, according to the health department statistics reported by NewJersey.com.
But New Jersey’s long-term care ombudsman Laurie Facciarossa Brewer told the news outlet she believes hospice remains generally underused in nursing homes.
“We don’t see cases where patients are on hospice that don’t need to be,” she said.
McDermott alleges that in her case, Life Source’s clinical coordinator told her to describe alert patients as “lethargic” or “comatose;” that the hospice executive director or other staff changed her chart entries and deleted other records; and that Life Source rewarded nursing homes for referrals with luaus and barbecues for staff, by providing extra equipment and allowing hospice staff to cover routine healthcare needs.
McDermott’s attorneys have subpoenaed records from six New Jersey nursing homes to try to gather more evidence reflecting a broader time period, though those records have not been supplied yet. The affected facilities include the Jewish Home at Rockleigh, Juniper Village of Paramus, Christian Healthcare Center in Wyckoff, the New Jersey Veterans Home at Paramus, Emerson Nursing Home and Dellridge Rehab and Health Care Center.
A spokeswoman for Juniper Communities told McKnight’s the matter “potentially involves a former operator of a community in Paramus, NJ, and consequently Juniper has no comment or information at this time.” None of the other nursing homes contacted by McKnight’s about the case Wednesday responded to requests for comment.
In court filings, an attorney representing Life Source and its executives denied McDermott’s allegations and said she wasn’t fired but quit.
