Owner of hospice with Swansea location accused of health care fraud

News-DemocratJanuary 28, 2014 

The founder of an Illinois hospice company with a metro-east location was charged with federal health care fraud.

Seth Gillman, 46, of Lincolnwood, was charged Friday with health care fraud and obstructing a federal audit. Gillman is the one-fourth owner of Passages Hospice LLC, which is based in Lisle and has several locations, including one in Swansea.

Gillman is accused of "engaging in an extensive 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," according to a news release from the FBI.

Neither Gillman nor his attorney, David Stetler of Chicago law firm Stetler Duffy & Rotert Ltd., could be reached for comment Tuesday.

Gill Soffer, a Chicago lawyer representing Passages, said Tuesday, "The charges were brought against Seth, and they were not brought against the company, and the company continues to do business."

Passages Hospice has an office at 16 Bronze Point N., Suite A, in Swansea.

According to the FBI, the level of hospice care for many patients allegedly exceeded what was medically necessary or actually provided. That included care for some patients who did not have terminal illnesses or who were enrolled far longer -- sometimes for several years -- than the required life expectancy of six months or less.

Gillman is an attorney and the corporate agent, administrator and one-fourth owner of Passages Hospice LLC. He also is the agent and secretary of Asta Healthcare Company Inc., which operates Asta Care Center nursing homes across the state. Asta does not have any metro-east nursing homes.

Passages did not have its own inpatient facility but instead deployed nurses to visit hospice patients in nursing homes and private residences.

The charges allege that between August 2008 and January 2012, Gillman trained Passages nurses to look for signs that would qualify a hospice patient for general inpatient care, resulting in higher payments per day, compared to routine care.

Gillman knew that many of Passages' patients were placed improperly on general inpatient care, as result of a 2009 review of patient files, a 2009 report by an outside consultant, and a 2010 internal audit, according to the charges.

Gillman also knew that some patients were placed on general inpatient care without a medical director's approval, the charges state.

Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. Obstructing a federal audit carries a maximum of five years in prison and a $250,000 fine, and restitution is mandatory.

Gillman was freed on a $150,000 bail after his first appearance Monday in U.S. District Court.

Last fiscal year, federal prosecutors filed a record high 377 new health care fraud cases. That was 3 percent more than the previous year and 7.7 percent more than five years ago.

Contact reporter Maria Hasenstab at mhasenstab@bnd.com or 618-239-2460.

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