Death and Profits

When Hugh Westbrook pioneered hospice care, his organization saw to the needs of the dying. Fifteen years later nothing has changed -- except the politics and the profit margins.

Accompanying Colliflower and Gaetz were several other corporate executives from Miami. More would fly in the next day. Singer says the Miami team went through all the files in the Chicago office, searching for anything that might cause the company embarrassment. "The whole company was in a panic," recalls Singer. "They had an immense concern that a scandal like this could trigger a congressional hearing and an inspector general's investigation of the entire company, nationally. And they did not want that to happen."

The next day the Miami contingent met with the Tribune reporters to answer their questions and to try to convince the newspaper that some practices occurring in Chicago were in violation of the company's national policies, but that it was an isolated incident. To support this claim, the reporters were given a copy of a memo, dated June 4, 1990, in which Mark Singer denounced the contents of Debi Dunlap's May 30 memo and advised hospice workers not to force patients into hospital beds simply to increase revenues.

The Tribune published the first of three stories on August 26. Reporters Jean Latz Griffin and Sharman Stein wrote that in addition to the effort to fill up the company's leased hospital beds, HCI admission counselors attempted to sift through nursing home records in search of patients eligible for recruitment. The newspaper also discovered that HCI was operating one of its three Chicago hospice programs without a license. Regarding Debi Dunlap's leaked memo, the Tribune reporters referred to Singer's later memo denouncing the practice but noted that none of the employees they interviewed remembered ever seeing the Singer memo of June 4.

"There is a reason why none of those employees saw that memo," says Singer today. "It wasn't written until August 23, when I was ordered to write it and back-date it into the files." Singer says his misgivings about creating the memo were overridden by concern for his job. His wife had recently given birth to their first child and had quit her job to stay home with the baby. He couldn't risk being fired, he says.

Company spokesman Ron Fried strongly denies Singer's allegation and describes it as "ludicrous."

Singer says after performing this and other tasks for company officials, he was fired along with the woman who wrote the May 30 memo, Debi Dunlap. Regional vice president Susan Koziol quietly resigned two months later. "The way the company decided to squash this was to offer up people as sacrificial lambs," says Singer, who today is working as a Chicago hospital administrator.

"We did not do anything that was illegal," Dunlap asserts. "We did not rip off Medicare, we did not commit Medicare fraud. They were investigated after they fired us and we had done nothing wrong. They ran scared, that's why they got rid of us. They should have stood up and said, 'We didn't do anything wrong. This was just a marketing memo.' The philosophy of that company has always been to grow the business and to keep your in-patient beds full."

Esther Colliflower reacts indignantly to such statements. "Increasing appropriate census is an important part of the company, and be sure you always remember appropriate as being part of that phrase," she insists, adding that a series of checks and balances is also an important part of the company. The patient's private physician, as well as the patient and his or her family, must agree that hospice care is needed. In addition, the doctors and nurses employed by the company -- who never have been part of a bonus system -- must approve patients before they are officially admitted.

As for the memo from corporate president Neil Bennett, spokesman Ron Fried says Bennett did not order employees to do anything improper.

The Office of the Inspector General for the U.S. Department of Health and Human Services, along with the Illinois Department of Public Health, investigated the allegations published in the Chicago Tribune. In September 1990, HCI issued a press release declaring that "none of the charges printed by the Tribune were substantiated by the investigation" and that the company had been vindicated.

HCI's self-congratulatory pronouncement was premature A by six full months. The investigations referred to in the press release were only preliminary. The actual inspector general's investigation was not completed until April 11, 1991, and its findings did not vindicate HCI but rather raised serious questions. "Investigation revealed that [HCI] employees felt undue pressure was put on them by management to hospitalize patients," the report states. "Employees in other regions indicate that the pressure to enroll patients and increase the census is not limited to" the Chicago area.

The report also included the results of an audit of HCI billing practices for eleven patients who were in the company's hospital units. The review determined that HCI had been overpaid by Medicare more than $54,000 for those eleven patients alone.

"This information was presented to the U.S. Attorney's Office," the report notes. "That office recommended that since the allegations which had surfaced in the [Chicago HCI] hospice could be nationwide in scope, audits could be undertaken in other regions to determine whether there was a pattern of abuse nationwide by this provider." If the inspector general's office in Washington decided to proceed with a national audit of HCI, the U.S. Attorney's Office would again consider whether there was "prosecutive merit to open a criminal case on this entity."

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